Wills, Trusts & Estates Prof Blog

Miscegenation and Disinheritance in Antebellum South Carolina

Kevin Noble Maillard (Assistant Professor of Law, College of Law Syracuse University) has recently posted on SSRN his article entitled The Heir-Cut of the Slave: Miscegenation and Disinheritance in Antebellum South Carolina.

Here is the abstract of his article:

This essay questions the effect of testamentary law on race and status, and how law may hinder the practical and formal past of family relationships. I examine antebellum South Carolina to pose questions of law and interracial memory in regards to the juridical window that made miscegenation, what Mary Boykin Chesnut called the "monstrous system" of miscegenation and slavery, in South Carolina difficult to define. This case concerns two miscegenous conflicts within the same family. First, in 1861, a scheming relative accused her "white" and recently widowed cousin, Mary Remley, of being a black slave. Were the claim true, Mary and her children, as slaves, could not legally stand as beneficiaries of her deceased husband's will, thus enabling the cousin to inherit as the legitimate next of kin.

Mrs. Remley and her children had always believed themselves to be free white persons, thus this claim shocked them into a racial paranoia that weakened their previous security in self-identity.

Years later, the daughters would revisit the interracial issue again upon the death of their brother, Paul Durbin Remley. In his will, he disinherited his sisters in favor of his slave mistress, Philis, and their two children, Charles and Cecile. His sisters, as the white collateral heirs, objected to the trust he had established for Philis, and contested the will in the state legal system. However, they did not learn of his death until after the Civil War, when Philis wrote them a loving letter explaining the circumstances of her master/lover's death. This point of notification forms a crucial element in the resulting litigation, which incites questions of law and memory that challenge independent recollections of the past.

Rosa Parks Update

The battle continues to brew over the estate of civil rights icon Rosa Parks. 

The fight is not, however, really about the physical assets in her estate.  Instead, the controversy surrounds her name and image which could be worth over $10 million.

Rosa's will left the bulk of her estate to the Rosa and Raymond Parks Institute for Self Development.  Parks distant family (nieces & nephews) are contesting the will claiming that Rosa's friend, Elaine Steele, exerted undue influence over her and has been mismanaging her estate.  They are claiming that they should have control over her likeness and image.

The trial starts on February 19, 2007 in Wayne County Probate Court in front of a six-member jury.

See David Ashenfelter and Suzette Hackney, Parks estate fight treads fine line in mixing marketing, legacy, Detroit Free Press, Jan. 30, 2007.

Special thanks to Elizabeth Carter (J.D. Candidate, Texas Tech University School of Law) and David S. Luber (The Estate Planning Law Firm, P.A.) for bringing this upcoming trial to my attention.

Cats vs. Dogs

The love owners have for their pets transcend death as documented by studies revealing that between 12% and 27% of pet owners include their pets in their wills. The popular media frequently reports cases which involve pet owners who have a strong desire to care for their beloved companions.  You may follow these links for a FAQs, state statutes, and sample forms.

A recent survey of matrimonial lawyers revealed that when pet custody issues arise upon divorce, dogs are involved over 90% of the time while cats are disputed in only about 5% of the cases.  Reported in Hearsay, Trial, Jan. 2007, at 88.

I wonder whether the same statistics hold up with regard to will and trust provisions.

Advanced Estate Planning Strategies Course

The State Bar of Texas is sponsoring the 13th Annual Advanced Estate Planning Strategies Course in Santa Fe, New Mexico on April 19-20, 2007.

The program includes the following topics:

• People: Estate Planning for the Dysfunctional Family
• Plan: Sophisticated Situations - How We Analyze Client Goals and Assets to Develop the Right Plan
• Problems: Fiduciary Issues
• Protecting Ourselves: Attorney Liability Issues
• And a special presentation on the outlook for federal estate tax legislation

Really-Rich Want to Be Ultra-Rich

The following is from Robert Frank, The Wealth Report: Borrowing Large; Debt of the Wealthy Soars, Wall St. J., Jan. 19, 2007:

According to Dalton Conley, a sociologist at New York University * * *, "What we're seeing is the top 1% struggling to keep up with the top 1/10th of 1%." * * *  And those people trying to keep up with the top 1/100th of 1%. There is a drive by the merely rich to keep up with the obscenely rich."

Special thanks to  Prof. Joel C. Dobris of the University of California-Davis for bringing this article to my attention.

Fascinating Non-Traditional Reproduction Case

After a man died, his mother had doctors remove his sperm (sperm remains viable even after the man's death).  The man died single, without children, and without a will.  The man's mother has recently won a three-year battle to have another woman whom her son had never even met impregnated with this sperm.

See Mother wins dead son sperm case, BBC News, Jan. 19, 2007.

Final Exam: A Surgeon's Reflections on Mortality

Dr. Pauline W. Chen's book, Final Exam: A Surgeon's Reflections on Mortality was released on January 9, 2007. 

The following is from an excerpt from Dr. Chen's Q&A page:

I wrote Final Exam with the hope that it would inspire much needed discussions about end-of-life care. People have a hard time talking with one another about dying — we talk around the topic or ignore it all together — and this has been one of the biggest obstacles to all the efforts to improve end-of-life care.
   
The issue becomes particularly problematic when it occurs between doctors and their patients because any miscommunication means that patient care will in some way suffer. Doctors and non-doctors are often portrayed as standing at odds with one another. But I think that we ultimately share the same difficulties in grappling with death, albeit colored by our personal and professional experiences and by our cultural and ethnic backgrounds.
   
I hope that Final Exam will bridge the divide between doctors and their patients. I hope that it helps to support the current professional reform efforts in end-of-life care and even helps to accelerate the pace of political change. But my greatest hope is that Final Exam will create a common ground from which we can all begin to have meaningful discussions: about how we die, how we care for the dying, and ultimately how we live.

Special thanks to Neil E. Hendershot of the Harrisburg, Pennsylvania law firm of Goldberg Katzman, P.C., who also authors the PA Elder, Estate & Fiduciary Law Blog, for bringing this book to my attention.  Neil has written extensively about this book here.

Wealth Strategies Journal January/February 2007 Issue

The following articles have now been posted on the Wealth Strategies Journal and are available for download:

Emotional Issues In Estate Planning: "Planning Considerations In Naming A Guardian For A Minor Child" by Sarah M. Johnson

Abstract: Sometimes given short shrift by estate planning attorneys, the guardianship provision is often the most important aspect of a younger client's estate plan. This article aims to provide information and considerations for the counselor and client in the following areas: (1) the differences in state law regarding the appointment of guardians, (2) factors a parent should consider in naming a guardian, (3) the economics of the guardianship decision and (4) specific provisions regarding the guardian that may be included in the cient's Will.

Elder Law: “Watching The Watchman” by Professor Lawrence A. Frolik

Abstract: Very old, frail and demented elderly need a watchman, but they also need someone who is keeping an eye on the watchman. An essential aspect of planning for agents and surrogates is to provide oversight lest the watchman become the exploiter. As in so many aspects of life, a little planning can prevent a great deal of pain.

Asset Protection: "UTC Section 505(b) - Pandora Opens The Box" by Jonathan E. Gopman

Abstract: Estate planners frequently use Crummey Powers and 5  and 5 powers in plans without realizing such powers may expose trust assets to creditor claims. This article examines the asset protection consequences of using Crummey Powers or 5 and 5 powers in states that have enacted Uniform Trust Code Section 505(b).

Reducing Taxable Wealth Yet Keeping It All In the Family (Courts' Views On Best Method To Take Discounts) by Lance S. Hall

Abstract: Because of a series of IRS court victories in valuation cases, if taxpayers, estate planners, and valuation experts approach the valuation discounting process as they have in the past, there is a strong possibility that they have unwittingly increased the chance for audit, if audited, decreased the chance of favorable compromise and, if taken to Court, increased the chance of losing. This article explores a series of Court cases on the discount for lack of marketability issue that, when taken together, provide a road map to increase the likelihood of having the IRS and Tax Court accept the discount determined.

Delaware Asset Protection Trusts: Basics and Opportunities by William H. Lunger and F. Peter Conaty, Jr.

Abstract: This article describes the basic concepts of Delaware asset protection trusts and planning opportunities that such trusts offer.

The End of Bank Secrecy by Michael C. Durney

Abstract: For many years, there has been a widespread belief in European bank secrecy. However, as this article discusses, the customary rules of bank secrecy may well be a thing of the past and persons subject to U.S. tax had better be aware of this development.

Drafting A Marital Deduction Trust For Second Marriages, by Sebastian V. Grassi, Jr.

Abstract: Second marriages are common today. This article provides eighteen planning ideas to consider when designing marital deduction trusts for a second marriage situation where there are children from a prior marriage (or where the widow wants to control who inherits her estate after her (new) husband’s death).

Developing Confidence in Planning by Henry K. Hebeler

Abstract: While the future is inherently unpredictable, there are things that individuals can do to provide some insulation from uncertainties in retirement planning. This articles discusses such planning, the myth regarding success probabilities in financial planning, and how the foregoing impact retirement planning.

Separate Shares and Distributable Net Income

Michael T. Yu (Assistant Professor of Law, California Western School of Law) has recently published his article entitled A Proposed Allocation of Distributable Net Income to the Separate Shares of a Trust or Estate, 3 Pitt. Tax. Rev. 121 (2006).

Here is his introduction:

The general purpose of the separate share rule is to prevent one separate share of a trust or estate from being required to pay the income tax attributable to income being accumulated for another separate share. Under the separate share rule, separate shares of a trust or estate are treated as separate trusts or separate estates only for the purpose of determining the amount of distributable net income (DNI) used in calculating the income taxation of the trusts or the estates, and the beneficiaries of such trusts or estates. On December 28, 1999, the Treasury Department issued final separate share regulations, addressing, among other issues, when separate shares of a trust or estate come into existence and how DNI is computed and allocated to separate shares of a trust or estate.

This article examines the allocation of DNI to the separate shares of a trust or estate provided in the separate share regulations and provides two criticisms of such allocation. The first criticism is that the allocation of DNI is based upon each separate share's "portion of gross income includible in distributable net income" as opposed to being based upon the DNI of the trust or estate. This article discusses certain items of income, most notably tax-exempt interest and certain "outside income" not considered fiduciary accounting income, that are not "gross income includible in distributable net income" within the meaning of the separate share regulations and are, therefore, never allocated to the separate shares of a trust or estate, thereby sometimes producing inequitable results. The second criticism is that the allocation of DNI, by providing a mandatory allocation of income in respect of a decedent (IRD) in a certain fixed manner, contravenes the treatment of IRD under § 691 and related regulations, which generally provide that IRD is included, in the year in which the IRD is received, in the actual recipient's gross income. Finally, this article proposes an allocation of DNI that addresses tax-exempt interest and the income items that are not fiduciary accounting income and allocates and reallocates DNI attributable to IRD based upon who actually receives the IRD.

Part I of this article provides an overview of the income taxation of trusts and estates with separate shares, and Part II provides an overview of the separate share rule and separate share regulations. Part III criticizes the separate share regulations for excluding tax-exempt interest and non-IRD outside income from the allocation of DNI of the separate shares of a trust or estate. Part IV criticizes the separate share regulations for providing a mandatory pro rata allocation of DNI attributable to IRD to the separate shares that could potentially be funded with such IRD. Finally, Part V presents a proposed allocation of DNI to the separate shares of a trust or estate.

Is Trust Privacy is a Bad Thing?

Frances H. Foster (Edward T. Foote II Professor of Law, Washington University School of Law) has recently published her article  entitled Privacy and the Elusive Quest for Uniformity in the Law of Trusts, 38 Ariz. St. L.J. 713 (2006).

Here is her introduction:

On July 9, 2004, Marlon Brando's will was filed for probate in Los Angeles Superior Court. A media feeding frenzy ensued.  Reporters from across the globe scoured Brando's probate file for intimate details about the reclusive actor's personal life. Within hours, "enquiring minds" learned that Brando left a $21.6 million estate and a truly complex and fractured family. What even the most intrepid reporter could not discover, however, is how Brando's property will be divided. Except for "certain monthly payments" to two female friends, Brando's will devises his entire estate to his "[l]iving [t]rust," a document that is not part of the public probate file. Thus, Brando's trust gave him after death what he most craved during life-- privacy.

The Brando case illustrates a curious distinction between two "functional equivalents," the will and the revocable inter vivos or "living" trust ("revocable trust"). If the decedent devises her estate by will, the will becomes public record after her death, available to beneficiaries, heirs, thieves, reporters, and the "just plain curious"  alike. If the decedent makes the identical disposition of her estate by a revocable trust, however, the document remains private. Indeed, in most states, even current beneficiaries of a revocable trust cannot view in full the trust document that defines their rights and interests.

At first glance, trust privacy has considerable appeal. It responds to an almost visceral human need to keep one's private life private and to protect one's survivors from the glare of publicity. Yet, closer analysis reveals a darker side of trust privacy. Elsewhere, I have exposed the human costs of trust privacy and concluded that the human costs of trust privacy exceed its benefits. In this Article, I show that trust privacy undermines reform.

This Article argues that trust privacy has impeded two of the most significant modern reform efforts in the trusts and estates field. Part II describes the effort to unify the law of wills and will substitutes and shows how trust privacy has undermined that effort. Part III describes the effort to make trust law uniform across states through the promulgation and enactment of a Uniform Trust Code and shows how trust privacy has frustrated that effort. Part IV concludes that these reform efforts will not succeed until reformers have confronted and resolved the trust privacy issue.