Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, September 27, 2005

"I can see, I can see" -- Blind Trust Failure

A person may be unable to own certain assets outright if ownership would cause impermissible conflicts of interest.  For example, the President, a governor, a mayor, or other political figure may own stocks, bonds, real property, and other investments.  While carrying out the official’s duties, there would be a tremendous likelihood that conflicts of interest would arise between the person’s investments and political decisions.  Likewise, a corporate officer may also be placed in similar conflict of interest situation.  To eliminate these conflicts, the person places the assets in trust, names an independent third party as trustee, and indicates that the person as no control over the management of the assets and no authority to inquire about the exact nature of the trust investments while the person remains in office.  This type of arrangement is often called a blind trust.

Senate Majority Leader Bill Frist created such a trust (currently valued at between $7 and $35 million) but recent reports indicate that Senator Frist's vision was still quite good.  Here is an excerpt from Documents: Frist knew contents of blind trust, CNN.com, Sept. 26, 2005:

[Senator Frist] received regular updates of transfers of assets to his blind trusts and sales of assets. He also was able to initiate a stock sale of a hospital chain founded by his family with perfect timing. Shortly after the sale this summer, the stock price dived.

* * * Frist now faces dual investigations by the U.S. attorney for the Southern District of New York and the Securities and Exchange Commission into his stock sales.

September 27, 2005 in Current Events, Trusts | Permalink | TrackBack (0)

Monday, September 26, 2005

Estate Tax and the New York Bar Exam

The following information comes by way of Robert G. Nassau, Adjunct Professor and Co-Director of the Low Income Taxpayer Clinic Office of Clinical Legal Education at the Syracuse University College of Law"

According to the irrefutably reliable BarBri (and verified by the somewhat hard-to-read webpage of the New York State Board of Bar Examiners), Federal estate tax will no longer be tested on the New York State Bar Exam, effective with the upcoming February 2006 Exam.

However, New York State estate tax will continue to be a "testable" subject.

Because New York State estate tax IS Federal estate tax (albeit with a lower annual exclusion amount), this appears to create the anomalous situation of an examinee having to learn an area of law that won't be on the Bar Exam in order to learn an area of law that will be on the Bar Exam.

Even stranger is the prospect of New York students having to learn an area of law that no longer exists (if the Federal estate tax is repealed), in order to be prepared for the Bar Exam, because the New York State estate tax shows absolutely no signs of extinction.

September 26, 2005 in Current Events, Estate Tax | Permalink | TrackBack (0)

Computer Generated Signature on Attested Will Deemed Sufficient

In his comment, Chad Michael Ross, a senior staff member of the University of Memphis Law Review, discusses the case of Taylor v. Holt, 134 S.W.3d 830 (Tenn. Ct. App. 2003) in which The Tennessee Court of Appeals Allows a Computer Generated Signature to Validate a Testamentary Will, 35 U. Mem. L. Rev. 603-618 (2005).

Here is an excerpt from the comment:

With the continuing changes in technology, the typical way of signing a legal document using an ink pen is no longer the only feasible option. Regardless, signing by pen may be one of the safest ways to avoid fraud. The use of a pen to make one's signature can easily be compared and analyzed to determine its authenticity; admittedly, however, it is impossible to analyze an "X" mark for its genuineness--and that type of a signature dates back hundreds of years.

With its holding in Taylor, the Tennessee Court of Appeals becomes the first in the nation to rule on the validity of a testator's computer-generated signature. Courts have often been reluctant to acknowledge technological advances and to develop novel interpretations of traditional probate laws. The Taylor opinion, however, artfully combines precedent concerning testamentary signatures with the reality of modern technology. In so doing, the court has issued a well-founded opinion that proves that the statute of wills can accommodate the advances of technology without sacrificing the goals that underlie the statute. At least in this area of probate law, Tennessee now leads the way, and other states are likely to follow.

September 26, 2005 in Articles, Wills | Permalink | TrackBack (0)

Sunday, September 25, 2005

Manuscripts Wanted

The following is from an e-mail message I recently received from Robin Paul Malloy, the E.I. White Chair and Distinguished Professor of Law at the Syracuse University College of Law:

I am actively seeking book proposals and manuscripts for books related to all areas of property law including those with a focus on culture, and the relationship between property and citizenship. Subject areas can cover a wide range in the property area. Proposals and manuscripts are needed for a book series on Property, Citizenship, and Social Entrepreneurism with Cambridge University Press, and for a series on Law, Property, and Society with Ashgate Publishing.

Please see www.law.syr.edu/pcse for more information, and contact me to discuss proposals.

You do not have to be involved in the PCSE Working Group to have a book in either one of these series.

September 25, 2005 in Scholarship | Permalink | TrackBack (0)

Saturday, September 24, 2005

Self-Fiduciary Wills

Associate Professor Paula A. Monopoli of the University of Maryland School of Law has recently published an interesting article entitled Drafting Attorneys as Fiduciaries: Fashioning an Optimal Ethical Rule for Conflicts of Interest, 66 Univ. Pitts. L. Rev. 411 (2005).  Here is the abstract of Prof. Monopoli's article:

The American Bar Association recently revised the ethical rules that govern lawyers. Its Ethics 2000 Commission proposed a number of changes to the Model Rules of Professional Conduct, including revisions to the rules that affect how the profession handles conflicts of interest in the area of attorneys who draft instruments that name themselves as fiduciaries. The intersection of these changes, with their subsequent clarification by an ABA opinion issued in May 2002, has broad implications for attorneys practicing in this area. Given the increasing elderly population, the trillions of dollars that they are transferring to their baby-boomer children, and the shrinking number of banks willing to assume the role of fiduciary, there is an argument that the profession should be encouraging its members to take on this role for clients. However, the financial interest that the drafting attorney has in the fiduciary fee and the information asymmetry between lawyers and most clients create a conflict of interest. This article explores the ethical norm that resulted from the Ethics 2000 revisions to the Model Rules and the issuance of the ABA opinion interpreting those revisions. It explores the flaws in this norm and how it might be revised to better minimize the agency costs that exist while remaining consistent with the fiduciary nature of the attorney-client relationship.

September 24, 2005 in Articles, Professional Responsibility | Permalink | TrackBack (0)

Friday, September 23, 2005

Humorous Holographic Will

Holographic wills tend to be written by non-legally trained individuals who prepare homemade estate plans without professional advice. Accordingly, holographic wills frequently cause litigation because of the interpretation and construction problems that result.

Sometimes, however, holographic wills provide some levity in an otherwise morbid area. Take, for example, the will of John Brugger, Sr. (the link is to a certified typed copy of his will filed for probate in 1935).

Among other things, he left his daughter only $100 because she married a man of whom he did not approve and describes his wife as "geting older and a little fleshy." He also hopes this wife "will not be a Fool and mary again." [Misspellings in original.]

Special thanks to Bryan Russ for bringing this will to my attention.

September 23, 2005 in Humor, Wills | Permalink | TrackBack (0)

Oral Living Will?

On Sunday (September 18, 2005), a woman died who rescuers at a New Orleans hospital elected not to evacuate because the seriousness of her condition made it problematic that she would survive the rescue. Due to the efforts of her family and doctor, she was later evacuated.  Because of days without medicine and exposure to the polluted flood waters, she developed a serious infection.

Her mother directed that her life support equipment be removed. The hospital staff complied thereby triggering her death. The basis of the removal was an alleged oral statement, that is, "Don't leave me on the machine."

See Robert Davis, Rescued ICU Patient Dies in Dallas Hospital, USA Today, Sept. 19, 2005, at 2A.

As far as I can tell, this situation has not engendered controversy, unlike other cases where life support is retained despite evidence that the patient indicated that he or she did not want to be kept alive by machines.

September 23, 2005 in Current Events, Death Event Planning | Permalink | TrackBack (0)

Thursday, September 22, 2005

Jim Borgman Living Will Cartoon

Jim Borgman of the Cincinnati Enquirer (no relation to the National Enquirer) released a humorous cartoon related to living wills on April 6, 2005. I hope you agree with my characterization!

Special thanks to Ms. Stacy Estes for bringing this cartoon to my attention.

September 22, 2005 in Humor | Permalink | TrackBack (0)

Attorney is Suspended from Law Practice for Mishandling Probate Case

A Houston attorney recently received a six-month, active suspension from the practice of law for mishandling a probate matter.  The grievance committee found that he 

accepted employment from the complainant regarding a probate matter but admittedly had to take courses to learn how to perform the task for which he contracted. Haynes failed to diligently pursue the legal matter he was hired for by waiting until almost four years postemployment to file any instrument with the court on behalf of the complainant.  He consistently failed to communicate with the complainant or keep her informed about the status of her case in spite of her requests.

See Disciplinary Actions, 68 Tex. B.J. 753, 759 (2005).

September 22, 2005 in Professional Responsibility | Permalink | TrackBack (0)

Wednesday, September 21, 2005

AARP Adult Guardian Practices Survey

The following is from an e-mail I recently received from AARP regarding its online survey on Adult Guardianship Monitoring Practices:

[W]e hope you can take about 15 minutes of your time to complete the survey. * * * [T]he AARP Public Policy Institute, in collaboration with the ABA Commission on Law and Aging, is conducting this national survey.  * * * 

Your responses will make a tremendous contribution, and will help in evaluating current approaches and identifying effective measures for protecting wards and holding guardians accountable.  We will share with you the report summarizing the results.

To show our appreciation, we will be hosting a raffle for five $50 Amazon.com gift certificates – or we will make equivalent donations to the charitable organizations the winners designate.  To enter the drawing all you need to do is complete the online survey by Friday, September 23, 2005.  (Please note that you must supply your name and email address when completing the survey to participate in the raffle.  All of your responses are confidential – we will use this information only to contact you if you win, and to obtain any follow-up information.)

September 21, 2005 in Disability Planning - Health Care, Disability Planning - Property Management | Permalink | TrackBack (0)