Wills, Trusts & Estates Prof Blog

Proving You are Alive -- Not an Easy Task!

Proving that someone is deceased is relatively easy -- a corpse or a death certificate usually does the job.

But as Jeremy  Bass from Moscow, Idaho recently discovered, it is very difficult to prove that you are alive.

Jeremy recently received a letter declaring that he was dead and a phone call from the sheriff's department inquiring about the mechanism of his death.

The problem arose when a man with a similar name (same first and last names but a different middle name) died at a local medical center.

Now, Jeremy is fighting with the hospital who wants him to pay for the expenses of their unsuccessful life-saving treatment of the similarly named man.

See Man Fights To Get "Life" Back After Being Declared Dead, CityNews.ca, Sept. 28, 2007.

Special thanks to Cory McDowell (J.D. Candidate, Texas Tech University School of Law) for bringing this article to my attention.

Abrogating Common Law Marriage in South Carolina Can Bring Positive Outcomes

Ashley Hedgecock (J.D. Candidate 2008, University of South Carolina School of Law) has recently published her comment entitled Untying the Knot: The Propriety of South Carolina's Recognition of Common Law Marriage, 58 S.C. L. Rev. 555 (2007).

Here is the synopsis of her comment as posted on the South Carolina Law Review website:

South Carolina is among a dwindling minority of jurisdictions that continues to recognize common law marriage. The Note explores the history of the common law marriage doctrine in South Carolina and the need for the doctrine in contemporary society. After balancing the expectation interests of couples engaging in common law marriage relationships with the costs imposed by the doctrine, the article argues that South Carolina should abolish common law marriage in order to promote judicial efficiency, protect third parties, and provide couples with a bright line rule regarding their legal rights.

Equitable Adoption Analyzed

Michael J. Higdon (Lawyering Process Professor, William S. Boyd School of Law, University of Nevada) has recently posted on SSRN his article entitled When Informal Adoption Meets Intestate Succession: The Cultural Myopia of the Equitable Adoption Doctrine.  The article will also appear in a forthcoming issue of the Wake Forest Law Review.

Here is the abstract of his article:

In certain circumstances, the equitable adoption doctrine allows a person to inherit as the child of a testator even when the testator was neither that person's biological or adoptive parent. Although this doctrine, at first blush, might appear to be a move toward a more inclusive system of intestate succession, as many scholars have noted, the restrictive tests that the various courts have designed to determine who qualifies as an equitably adopted child have only served to greatly undermine the utility of the doctrine and, in numerous cases, have led to the denial of rather compelling claims.

While agreeing with those criticisms, this article levels a new, more troubling, criticism against the equitable adoption doctrine. Specifically, the equitable adoption doctrine is both culturally-biased and discriminatory. Indeed, as it currently exists, the doctrine uses formal adoption, as that practice exists within the Eurocentric, nuclear family model, to define what qualifies as a parent-child relationship worthy of legal protection. In so doing, the doctrine effectively ignores the practice of informal adoption, which is much more prevalent in the extended family model found in African American and Hispanic communities. This article, thus, examines both the extended family model and the corresponding role that informal adoption plays within those two communities. Set against that backdrop, it becomes much more evident how the current law of equitable adoption not only is overly restrictive, but has the potential to be particularly punishing to our country's minority ethnic populations. With those concerns in mind, this article then offers two different proposals that would make the law of intestate succession more cognizant and inclusive of informally adopted children.

Mandatory Arbitration Clauses in Trusts and Their Enforceability

Michael P. Bruyere (Attorney at Law, Lord, Bissell & Brook, LLP) and Meghan D. Marino (J.D., 2007, cum laude, University of Georgia) have recently published their article entitled Mandatory Arbitration Provisions: A Powerful Tool to Prevent Contentious and Costly Trust Litigation, But Are They Enforceable?, 42 Real Prop. Prob. & Tr. J. 351 (2007).

Here is the editor’s synopsis of their article:

This article proposes that the inclusion of mandatory arbitration provisions in trust agreements can aid a grantor in effectuating a seamless distribution of wealth by preventing trust disagreements from erupting into costly litigation. The Article examines whether mandatory arbitration clauses in trust agreements are enforceable under current law by providing an overview of the judicial treatment of such provisions in several states that have statutorily addressed alternate dispute resolution in the context of trust agreements. The authors posit that further statutory reform will be necessary to move beyond the perceived obstacles some courts have found in the legal distinction between trusts and contracts.

Equitable deviation available to create special needs trust

Parents created a trust to pay income to son and daughter-in-law, then income to their children until age 35 at which time the trust property would be distributed to them.  The son as trustee petitioned the court to reform the trust to create a special needs trust for his daughter who is disabled and under institutional care paid for by the state.

The court in In re Riddell, 157 P.3d 888 (Wash. Ct. App. 2007), determined that equitable deviation was applicable because of the existence of unanticipated circumstances.  It would be consistent with the settlors’ intention to create a trust for the general support of their grandchildren and not solely for the payment of extraordinary medical bills.  The court also noted that the state encourages the creation of special needs trusts and that the trial court erred in considering the potential loss to the state by the creation of the special needs trust.

England Cracks Down on Inheritance Tax Avoidance

Under English law, gifts made more than seven years before a decedent's death are not subject to the inheritance tax while gifts made within seven years of death may be taxed at rates as high as 40%.

According to Faith Archer & Harry Wallop, Crackdown on 7-year inheritance tax gift rule, Telegraph, Sept. 21, 2007:

The authorities are trawling through financial information such as bank statements and pension plans, to make sure any gifts made during the seven years before the donor's death have been accurately declared. If families fail to complete paperwork accurately they could be fined.

Enforcement of the law is not going over well and has been deemed as "squeez[ing] yet more tax out of bereaved families" and "tightening the screws on the taxpayer to feed [the Treasury's] insatiable appetite for cash."

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

Robert H. Sitkoff -- "Chip off the ol' Block"

Our distinguished colleague Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) appears to have received tremendous inspiration from his father, Samuel Sitkoff, a retired trusts and estates attorney.

See Nora Lockwood Tooher, Robert H. Sitkoff: Like father, like son, LawyersUSA, Sept. 24, 2007, which details Prof. Sitkoff's career and how he developed his affinity for trusts and estates law.

Special thanks to Prof. Paul Caron for bringing this article to my attention.

Loopholes in the Estate and Gift Tax System and Possible Solutions

Eric G. Reis (Attorney at Law, Thompson & Knight LLP) has recently published his article entitled Mr. Soros Goes to Washington: The Case for Reform of the Estate and Gift Tax Treatment of Political Contributions, 42 Real Prop. Prob. & Tr. J. 299 (2007).

Here is the editor's synopsis of his article:

This Article recognizes a growing interest in long-term political giving and considers how this trend will expose weaknesses in the current estate and gift tax regime for political contributions. Through an exploration of planning techniques used to exploit gift tax charitable deductions and other gift tax exclusions under prior law, the Article considers how the unlimited gift tax exclusion for political contributions might also be used to circumvent the current estate and gift tax system by facilitating tax-free transfers to members of a donor’s family. The Article then proposes several significant reforms to the system, including the adoption of rules limiting the gift tax exclusion for political contributions and the enactment of an estate tax deduction for bequests to political organizations.

Extrinsic evidence of a promise not to revoke a trust inadmissible where the settlors expressly made the trust revocable

The decedent and his wife created trusts both of which were expressly stated to be revocable.  Each trust named the other spouse as the income beneficiary and when both spouses were dead, the remainders were to be distributed equally to decedent’s three children and wife’s four children.

After wife’s death, the decedent remarried, revoked his trust, and created a new trust the remainder of which passed on his death only to his three children.  The wife’s children sued alleging breach of a contract not to revoke the trusts and fraudulent inducement by the decedent.

The court in Kempton v. Dugan, 224 S.W.3d 83 (Mo. Ct. App. 2007), held that there was no ambiguity in the revocation provision, that extrinsic evidence of an agreement not to revoke therefore was inadmissible, and that the evidence presented on the fraud count was insufficient because it related to a time after the creation of the trusts.

Estate of George Galbraith Revisted

The possibility of significant litigation is brewing in Hawaii involving the testamentary trust of George Galbraith which is set to terminate in 2007. The Bank of Hawaii, the trustee of the George Galbraith Trust Estate, has initiated the process of termination of the trust by petitioning the probate court in Hawaii for instructions as to settlement and distribution.

Galbraith's will took effect in 1904 and disposed of his residuary estate in trust, with a number of fixed annuities to be paid to about 48 individuals, and then to their heirs. The will stated the trust is to continue for the longest duration permitted under Hawaii law. At the end of the permitted period, the remaining trust estate is to be distributed equally to those entitled to the annuities.

The poorly drafted will created much confusion over the ultimate disposition of the trust estate (which is valued in the millions). Over the years, the annuities beneficiaries have increased and live all over the world from Ireland to Australia and Hawaii, while the amount of the annuity payments essentially remained the same since 1905. Some speculators reportedly have been purchasing annuity interests from beneficiaries who may have no idea how much their interest may be worth. The strange thing according to some is that the current "beneficiaries" are not the holders of the annuity but rather the lawyers, trustee, and governments raking in fees and taxes.

For more information, see the unofficial site maintained by Ian Lind for news and background on the Estate of George Galbraith and its coming breakup.