Wills, Trusts & Estates Prof Blog

Cremains Everywhere, Oh My!

In a story most appropriate for Halloween, Douglas Belkin reports in Abandoned cremains piling up at funeral homes, Boston Globe, Oct. 31, 2005, that

[t]ens of thousands of abandoned cremains are piling up in funeral home storage closets, basements, and utility rooms nationwide. Some funeral directors send out annual letters pleading for the next of kin to pick them up. Many return unopened.

What can funeral directors do? If they pay for burial themselves, costs could quickly run into the tens of thousands of dollars, and if they dispose of them without permission, they might be sued. Even with some state guidelines, no one wants to tell a long-lost relative that grandpa's ashes are gone.

Some of the cremains have been stored for over 50 years!

Special thanks to Assistant Professor Alyssa A. DiRusso of the Cumberland School of Law for bringing this article to my attention.

Judge Samuel Alito Nominated for Supreme Court

Earlier today (October 31, 2005), President Bush nominated Judge Samuel Alito from the Third Circuit Court of Appeals for the United States Supreme Court to replace Justice O'Connor.  See Bush nominates Alito to high court, CNN.com, Oct. 31, 2005.

If you have any insight into how he might rule on the Marshall and Gonzales cases, please share them with me.

All My Children Wear Fur Coats

On other occasions, I have discussed estate planning for pet animals.

Attorney Peggy Hoyt (Oviedo, Florida) has published a book entitled All My Children Wear Fur Coats (2002).  Ms. Hoyt describes her book as:

a book which explores all the alternatives for planning for your pet's future with or without you through estate planning for animals. This book is for anyone who has ever loved a pet and wondered what he or she would do if their pet were no longer with them or what their pet would do if they were no longer there. A must have Estate Planning Tool for Pets.

Click here for a comprehensive list of resources for estate planning for pets.

Another Getty Trust Update

On several prior occasions, I have reported on the problems facing the Getty Trust.  Here is some additional material as reported in Did Getty museum purchase looted art?, CNN.com, Oct. 30, 2005:

The board of the J. Paul Getty Trust has formed a special committee to investigate claims that its world-renowned museum purchased looted art and its chief executive spent lavishly with tax-exempt funds. * * * The special committee will examine the trust's policies and procedures and make recommendations to the full board.

The $9-billion trust and its J. Paul Getty museum are under intense scrutiny: The Greek and Italian governments have claimed the museum bought ancient artworks that had been smuggled out of those countries. The museum has denied wrongdoing but in 1999 it returned three pieces to Italy, including a fifth century B.C. drinking cup.

The creation of the committee reflects a commitment to meet "all legal requirements as well as the highest ethical standards while carrying out the trust's mission," John Biggs, chairman of the trust's board and head of the new committee, said in a statement.

Special thanks to David S. Luber for referring me to this article.

FLPs and I.R.C. § 2036(a)

The winning entry in the Second Annual Mary Moers Wenig Student Writing Contest sponsored by the American College of Trust and Estate Counsel has just been published -- Layne T. Smith, FLPs and the 2036(a) Bona Fide Sale Exception: The Vital Role of the Presumption of Adequate and Full Consideration, 31 ACTEC J. 138 (2005).

Mr. Smith graduated from the J. Reuben Clark Law School at Brigham Young University and is now working for Wood Crapo LLC in Salt Lake City, Utah.

Here is the conclusion of Mr. Smith's article:

The FLP potentially offers taxpayers substantial transfer tax savings in the form of valuation discounts for lack of control and lack of marketability. Under the fair market value standard, these discounts are entirely appropriate and justifiable. However, when taxpayers use FLPs as testamentary vehicles with little accompanying business purpose, the availability of tax savings resulting from these discounts should be curtailed. Recognizing this, courts have been quite willing over the past few years, when appropriate, to bring property transferred to an FLP back into the decedent’s gross estate using Section 2036(a). But courts should be wary of an overly liberal application of the bona fide sale exception that could negate the effectiveness of Section 2036(a).

The general failure to recognize the proper justification for applying the bona fide sale prong has led to confusion among courts concerning the correct standard for evaluating transfers of property to an FLP. The bona fide sale exception cannot be applied to a transfer to an FLP on the grounds that the discounted partnership interest received in return replenishes the estate dollar for dollar. Instead, the exception should only be applied to discounted interests received in exchange for a transfer to an FLP in the ordinary course of business. When a transaction is entered into in the ordinary course of business—that is when the transfer is both bona fide, at arm’s length, and free from donative intent—courts may presume that the transferor received adequate and full consideration in money or money’s worth. Because this presumption is the only proper justification for holding that the bona fide sale exception applies to transfers to an FLP, only transactions entered into in the ordinary course of business should be excepted from the reach of Section 2036(a) as bona fide transfers for adequate and full consideration.

Safety of Probate Lawyer

Estate planning and probate law is one of the more secure areas of law vis a vis the attorney's physical safety.  But, as Gerald Curry found out on Halloween in 2003, the probate practice has its dark side.

As Mr. Curry was outside a California courthouse, a disgruntled beneficiary (I think) of a trust being administered by one of Mr. Curry's clients shot him repeatedly in the neck, arm, and shoulder.  Despite seeking shelter behind a tree, Mr. Curry was seriously injured.

You may even remember watching Mr. Curry's attack on television because it was caught on tape by reporters covering the Robert Blake murder trial.

You will be pleased to learn that Mr. Curry has now recovered and has resumed his law practice.

See Then & Now: Gerald Curry, CNN.com, Oct. 27, 2005.

Special thanks to Douglas Cowan for bringing this case to my attention.

More on Estate Planning for Pets

Previously on this blog, I reported on the tremendous increase in interest in estate planning techniques to be certain a client's non-human companions are provided for upon the client's death.

This increase is not surprising given the importance that pets play in the lives of many people.

A survey by Kelton Research for the American Kennel Club revealed that 66% of the respondents would not even date the man or woman of their dreams if he or she disliked their dog!  Dating or the dog?, USA Today, Oct. 26, 2005, at A1.

In Your pets can cool their paws in style, USA Today, Oct. 21, 2005, at D1, Olivia Barker reports on the growing market for upscale pet furniture such as a Phillipp Plein Dog Bed which can cost over $1, 500.

More on Katrina & Estate Planning Opportunities

Earlier on this blog, I reported on the Katrina Emergency Tax Relief Act of 2005 which provides tax relief to the victims of Hurricane Katrina as well as some extraordinary tax planning opportunities.

These opportunities are now receiving enhanced publicity such as in an article which appears in today's New York Times, Stephanie Strom, In Hurricane Tax Package, a Boon for Wealthy Donors, NY Times, Oct. 27, 2005.  Ms. Strom explains that the new legislation

allows donors who make cash gifts to almost any charity by the end of this year to deduct an amount equal to virtually 100 percent of their adjusted gross incomes, double the normal limit of 50 percent of income. The tantalizing prospect has set off a financial scramble among some wealthy donors and charities vying for their dollars.

Special thanks to Prof. Joel C. Dobris of the University of California -- Davis for pointing out this article.

Even More on Frist & Blind Trusts

National Public Radio reporter Mike Pesca included a segment on NPR's Day to Day program on Tuesday (Oct. 25, 2005) about the workings of blind trusts and explained why Frist's dealings prompted allegations of misconduct.

To listen to his interesting report, follow this link and then select the "listen" icon -- the report is about 4.5 minutes long.

Harriet Miers Withdraws Nomination

A statement issued by the White House today (October 27, 2005) explains that President Bush has accepted Harriet Miers request to withdraw her nomination for a position on the United States Supreme Court.  See Miers withdraws Supreme Court nomination, CNN.com, Oct. 27, 2005.

So -- the two major cases from the perspective of wills, trusts and estates which are pending in front of the Court (Marshall and Gonzales) will not get the benefit of Ms. Meirs' expertise.