Wills, Trusts & Estates Prof Blog

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

Monday, February 26, 2007

Howard K. Stern

Stern_annaAs you probably know by now, Howard K. Stern, Anna Nicole Smith's long-time companion, is claiming to be Dannielynn's father.

But, here is some interesting information you may not know:

  • Received his J.D. from the University of California
  • Admitted to California bar on 2/25/94
  • No record of disciplinary action
  • Howard's law firm handled Anna's modeling contracts
  • Howard owned a talent agency which had only one client, Anna
  • Appeared in 2004 movie Wasabi Tuna  with Anna that grossed $7,950 in the United States

See Howard K. Stern, Wikipedia.

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

February 26, 2007 in Current Events | Permalink | Comments (0) | TrackBack (0)

Top SSRN Downloads

Ssrn_2 Here are the top downloads from December 28, 2006 to February 26, 2007 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days

Rank Downloads Paper Title
1 230 Celebrating Life (Chai) and Taxes: Lessons Learned
Francine J. Lipman,
Chapman University - School of Law,
Date posted to database: December 22, 2006
Last Revised: December 22, 2006
2 38 The Heir-Cut of the Slave: Miscegenation and Disinheritance in Antebellum South Carolina
Kevin Noble Maillard,
Syracuse University College of Law,
Date posted to database: January 14, 2007
Last Revised: January 14, 2007
3 34 The Economics of Fiduciary Accountability
Robert Flannigan,
University of Saskatchewan,
Date posted to database: February 15, 2007
Last Revised: February 22, 2007

February 26, 2007 in Articles | Permalink | Comments (0) | TrackBack (1)

Sunday, February 25, 2007

Anna Nicole Smith Update

Daniel_graveDannielynn's guardian, Richard C. Milstein, has indicated that Anna's funeral will be delayed at least until Tuesday (February 27, 2007).

Virgie Arthur has filed an emergency motion with Judge Seidlin asking him to reconsider his decision.  Judge Seidlin has not indicated when he will rule on this motion.  Arthur, Anna's mother, has also indicated she will appeal if Judge Seidlin does not grant a stay of his original order.

The photo above is of Lakeview Memorial Gardens & Mausoleums in Nassau, Bahamas where Anna's son is buried in an unmarked grave.

See AP, No funeral for Anna Nicole Smith before Tuesday, attorney says, Houston Chronicle, Feb. 25, 2007.

February 25, 2007 in Current Events, Death Event Planning | Permalink | Comments (0) | TrackBack (0)

James Brown Update

Brown_1Although James Brown has been dead for approximately two months, the fight over where he should be buried continues.

However, unlike Anna Nicole Smith's situation where a prompt decision was needed regarding body disposition, Brown's body is still in good shape.

See Katrina A. Goggins, As two celebs await burial, funeral director says James Brown's body is looking good, AP, Feb. 23, 2007:

The reason for the difference in their condition, experts said, is that Brown was embalmed within a few hours of his death, while Smith's body was refrigerated for more than a week before being embalmed. Refrigeration creates moisture that contributes to decomposition.

February 25, 2007 in Current Events, Death Event Planning | Permalink | Comments (0) | TrackBack (0)

Saturday, February 24, 2007

Fiduciary Litigation -- The Cailloux Case

The fiduciary duty owed by attorneys to their clients in estate planning matters has come under ever-increasing scrutiny and has been the focus of a growing amount of litigation.

Cailloux v. Baker Botts is one of the more recent cases, famous for its jury award of $65.5 million.  After earning his fortune with Keystone International, the well-known valve manufacturing company, Floyd Cailloux moved to Kerrville, Texas in 1982.  Zeke MacCormack, Kerr jury sides with widow, MySA.com, Feb. 25, 2005.  He enlisted the law firm of Baker Botts as his attorney.  A lawyer for the firm prepared a will for Floyd, which he executed in 1995, appointing Wells Fargo as the executor.  Glenda Taylor, Cailloux Family Seeking Damages, Kerrville Daily Times, Jan. 14, 2005.  Further, Floyd established a marital trust for his wife and a trust for his children.  In January 1997, Floyd Cailloux died and was survived by his wife and children.  Baker Botts attorney Stacy Eastland suggested “that Floyd’s heirs disclaim their rights under his will,” to avoid hefty tax liability after disclaimer.  The Floyd and Kathleen Cailloux Foundation, previously created in 1994, received a 92% share from the estate, totaling $60 million dollars.  Wells Fargo bank officer Bill Goertz was director of the foundation.

Floyd’s wife, Kathleen Cailloux, and his children, represented by the Austin law firm Fritz, Byrne, Head & Harrison LLP and Kerrville attorneys Richard Mosty and Donald Dorsey, filed suit in the 198th District Court in August 2003.  Monica Perin, Kerrville judge affirms $71 million verdict against Baker Botts, Houston Business Journal, April 6, 2005.  Floyd’s son, daughter, and grandson nonsuited their claims once the trial began on February 8th, 2005.  Brenda Sapino Jeffreys, Jury Returns $65 Million Verdict Against Baker Botts, Other Defendants, Tex. Law., March 9, 2005).  The plaintiffs claimed in the sixth amended petition that “Baker Botts attorneys [had] conspired with [Wells Fargo] bank trust officers to formulate an estate plan favoring a family foundation which one of the bank officers, Bill Goertz, directed and served as a board member.”  The Caillouxes claimed that neither Kathleen nor the other heirs were fully informed of the plan’s implications.  However, at trial, Kenneth Cailloux, son and heir of Floyd Cailloux, testified that he had failed to inquire into the aspects of the estate plan that he did not understand.

The original defendants in the law suit were “the legal firm Baker Botts; Wells Fargo Bank Texas; William Goertz, one of four original directors of the Cailloux Foundation; S. Stacy Eastland and Stephen Dyer, attorneys with Baker Botts.”  Eastland and Dyer have since left Baker Botts and are now working for Goldman Sachs in Houston.  Upon reaching a settlement, Goertz was dropped as a defendant before the trial.  The settlement required the current members of the Cailloux Foundation board of directors to surrender their seats to Cailloux family members, who had been denied any role in the Foundation since the death of Floyd Cailloux.

The three-week trial ended after seventeen hours of jury deliberations, resulting in a $65.5 million dollar verdict in favor of the Cailloux family.  The jury found that Baker Botts, in failing to disclose all important information, had breached its fiduciary duty toward Kathleen Cailloux.  It also found a breach of fiduciary duty on the part of Wells Fargo, the executor of the will, in which Goertz had participated individually, as he headed the foundation that received the disclaimed estate property.  Though named as defendants, the jury was not asked to make any findings against either Eastland or Dyer.  The award was later adjusted upward by District Judge Karl Emil Prohl to $71 million to reflect $5.6 million in pre-judgment and post-judgment interest and court costs of $61,000.  Brenda Sapino Jeffreys, Baker Botts and Wells Fargo Bank Texas Hit With $71 Million in Damages, Other Defendants, Tex. Law., April 8, 2005.

The jury verdict, a 10-2 vote, “assessed 25 percent of the responsibility for the injury to Cailloux, another 25 percent against Baker Botts, and 25 percent each against Wells Fargo and Goertz.”  Partial responsibility was assessed against Kathleen Cailloux because, according to Juror Dennis, not enough questions were asked during the estate planning process.  The award money would go into the Kathleen C. Cailloux Equitable Trust, allowing Cailloux to use the trust’s interest and to withdraw up to 5 percent annually of the trust’s principal.

The award did not sit well with Wells Fargo defense attorney Dean Fleming, who said that, “[as] far as I can tell, it’s unprecedented in Texas law for a judge just to create a trust out of whole cloth,” referring to Prohl’s use of his equitable powers to establish the trust.

On February 14, 2007, the Texas Fourth Court of Appeals reversed the trial court's judgment explaining that Cailloux failed to prove causation.   The stated that there was "no evidence that any of the alleged breaches of duty by Wells Fargo caused Kathleen to disclaim her right to Floyd's estate."  The court reached a similar conclusion with respect to Baker Botts.  The court then rendered a take nothing judgment in favor of Baker Botts and Wells Fargo.  See Baker Botts LLP v. Cailloux, No. 04-05-00446-CV (Feb. 14, 2007).

In dicta, the court also noted that "even if we were to assume that causation was proven as a matter of law at trial, we would nonetheless hold the trial court abused its discretion by imposing an "equitable trust" upon Baker Botts and Wells Fargo."

February 24, 2007 in New Cases, Professional Responsibility, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Preventing Will Contests

Mcmullen_1Judith G. McMullen (Professor of Law, Marquette University) has recently published her article entitled Keeping Peace in the Family While You Are Resting in Peace: Making Sense of and Preventing Will Contests, 8 Marq. Elder's Advisor 61 (2006).

Prof. McMullen describes her article as follows:

The first section [of my article] describes some of the common legal challenges used to prevent the enforcement of specific will provisions or to contest the will's admission to probate. The article then discusses the overarching issue of why surviving family members fight about property after the death of a loved one. Here, the article describes the legal concept of freedom of testation and contrasts a testator's view towards property ownership and disposal with the views of potential family recipients. This section also discusses the implicit preference that the law gives to presumptive heirs - a preference that probably bolsters the resolve of disappointed heirs to engage in will challenges. In the final section, this article describes specific steps that typically are recommended for use by testators to reduce the likelihood of will challenges, and it concludes by asking clients and their lawyers to mull over the long-term emotional and social repercussions of proposed estate plans.

February 24, 2007 in Articles, Wills | Permalink | Comments (0) | TrackBack (0)

Friday, February 23, 2007

Laughing Heirs

The phrase "laughing heir" has been defined as:

Distant relative of an intestate decedent who takes under the applicable intestacy statutes but who did not expect to inherit.  This heir is said to "laugh all the way to the bank" because the heir often does not even know the decedent.

Modern Dictionary for the Legal Profession 567 (3d ed. 2001).

See Rachel Emma Silverman, Heir-Search Firms Help To Keep It in the Family,Wall St. J., for a discussion of how heir search firms operate such as Harvey E. Morse, P.A., Locaters International, Inc.   Here is an excerpt from this article:

Estates with missing heirs don't happen very frequently -- "The average attorney may only get three or four types of these cases in their lifetime," estimates Mr. Morse * * *

Heir search firms have been criticized for taking hefty fees -- some services have raked in as much as half of the inheritance. The industry generally isn't regulated, and fees are often agreed to in private contracts, rather than set by probate courts; some firms, however, may charge flat or hourly fees, instead of a percentage of the inheritance.

There have also been complaints when heir search services contact heirs directly after going through records and initiating searches on their own.

Thus heirs may wonder whether they would eventually have ended up with their inheritances through other means, without contracting with a firm to help procure the windfall.

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

February 23, 2007 in Intestate Succession | Permalink | Comments (2) | TrackBack (0)

Today's Anna Nicole Smith Developments

Anna4_1 Paternity of Dannielynn:  The Broward Circuit Judge hearing the guardianship phase of Anna Nicole Smith's case is not the same judge who heard the body disposition issue.  Judge Lawrence Korda is uncertain whether he has jurisdiction to determine Dannielynn's paternity.   A paternity action is also pending in a California court but Judge Korda is skeptical of whether the California court has jurisdiction either.

Disposition of Anna's Body:  Thomas W. Pirtle, the attorney for Anna's mother Virgie Arthur, indicated that he would file an appeal today (February 23, 2007) of Judge Seidlin's order granting Dannielynn's guardian authority to make disposition arrangements.

Cause of Anna's Death:  The medical examiner, Joshua Perper, has indicated that it may take ten days to two weeks before the results of Anna's autopsy will be known.

See Custody fight switches from Smith to her baby, CNN.com, Feb. 23, 2007.

February 23, 2007 in Current Events, Death Event Planning, Guardianship | Permalink | Comments (0) | TrackBack (0)

Texas Guardianship Manual

A valuable new resource has recently been released by the State Bar of Texas.  Here is an except from an e-mail I received advertising this book.

Quickly determine:

  • whether guardianship is necessary
  • whether there is a less restrictive alternative
  • the type of proceeding to be filed, and
  • where to go from there

Newly updated to reflect changes as a result of the 2005 legislative session and relevant case law, the Texas Guardianship Manual is a practice guide organized by the logical sequence of events that would occur while following a matter from beginning to end.

New material includes revised forms on creating guardianships, sale of personal property, and medical evidence and discovery. New forms on the release of protected health information have been added to this manual.

The manual includes a CD-ROM, also available for individual purchase, containing all materials as linked and searchable PDF files, with forms in both Word and WordPerfect. New features include a PDF of the Texas Probate Code and Texas case citations linked to a PDF of the case and to an online version of the CaseMaker Web Library.

Order the Texas Guardianship Manual (print and CD-ROM)

Order the Texas Guardianship Manual on Disk

February 23, 2007 in Books - For Practitioners, Guardianship | Permalink | Comments (2) | TrackBack (0)

Cremain Statistics

Thirty-one percent of United States decedents were cremated in 2004.  According to David Stuckey & March E. Mullins, Ashes to Ashes, USA Today, Feb. 22, 2007, at 1A, the top five reasons why people choose cremation are:

  1. Saves money (30%)
  2. Saves land (13%)
  3. Simpler (8%)
  4. Don't want body in earth (6%)
  5. Simple preference (6%)

February 23, 2007 in Death Event Planning | Permalink | Comments (0) | TrackBack (0)