Wills, Trusts & Estates Prof Blog

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

Saturday, August 11, 2007

Wrongful Death in Wyoming

Wyoming_flagGrant Harvey Lawson (J.D. 2007, University of Wyoming School of Law) has recently published his comment entitled Reconciling the Wyoming Wrongful Death Act with the Wyoming Probate Code: The Legislature's Wake-Up Call for Clarification, 7 Wyoming L. Rev. 409 (2007).

The Wyoming Legislature should amend the Wrongful Death Act to provide clear, unambiguous provisions which set forth its true intention, and allow those seeking justice for the wrongful death of a loved one to bring an action successfully. The amendments should provide attorneys, judges, and those attempting to comply with the Wrongful Death Act with straightforward conditions to be followed. The Wrongful Death Act was initially enacted to allow those who suffered a loss due to the wrongful death of a loved one the ability to have their day in court. A plaintiff in a wrongful death action should be allowed to bring a case in the court of his or her choice. Probate matters, which involve concerns of creditors and debts associated with the probate estates of decedents, are not and should not be a concern in wrongful death actions. Without a clear statement of intent by the Wyoming Legislature regarding whether out-of-state personal representatives must have a corresponding in-state co-personal representative, diversity questions will continue to confront the courts and deny relief to plaintiffs. Plaintiffs should not be barred from bringing wrongful death actions due to a flawed technicality in the law.

The appropriate amendments to the Wrongful Death Act should include, at a minimum, a clear definition of personal representative, an explicit statement of who may benefit from wrongful death actions, and clarification that the heirs or beneficiaries of the decedent are represented in an action and not the estate of the decedent. Further, the Wyoming Legislature should consider adopting the dual approach, thus allowing wrongful death actions to be brought by an heir or a personal representative of the deceased. This approach would both simplify the law and allow the most flexibility in providing relief for those injured by a wrongful death. Above all, the Wrongful Death Act should be disentangled from the Probate Code and allowed to stand on its own as a clear statement from the Wyoming Legislature that persons injured by the wrongful death of their loved ones are able to obtain justice in all Wyoming courts.

August 11, 2007 in Articles, Estate Administration | Permalink | Comments (1) | TrackBack (0)

Trusts and the Wall Street Journal

WsjAs you have probably already heard, Rupert Murdoch's News Corp. and Dow Jones "have signed a definitive merger agreement under which News Corporation will acquire Dow Jones in a transaction valued at approximately $5.6 billion."  See Press Release, Dow Jones & Company and News Corporation Enter Into Definitive Merger Agreement, Aug. 1, 2007.

What may not have been so widely known is that the trustees of family trusts were primarily responsible for the decision.  The following is from Matthew Karnitschnig, Bancroft Trusts' Lawyers Hold Key to Dow Jones, Wall St. J., July 2, 2007, which was written about one month before the signing of the merger agreement:

The Bancroft family may own a controlling stake in Dow Jones & Co., but the final decision on whether to sell the publisher of The Wall Street Journal to Rupert Murdoch could well be made by a small circle of longtime family lawyers in downtown Boston.

Lawyers from Hemenway & Barnes sit at the center of dozens of overlapping trusts that hold power over most of the Bancrofts' 64% voting stake in the company * * *. Those lawyers occupy two of the three trustee seats on a number of key trusts, with the third held by a family member. On one of the biggest trusts, lawyers from the firm are the only trustees. And the fact that the large Bancroft clan is divided over whether to sell further deepens the firm's influence.

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

August 11, 2007 in Current Events, Trusts | Permalink | Comments (0) | TrackBack (0)

Friday, August 10, 2007

Post-Mortem Conception and Inheritance

Joshua Greenfield (University of Minnesota J.D. candidate (2007)) has recently published his note entitled Dad Was Born a Thousand Years Ago? An Examination of Post-Mortem Conception and Inheritance, With a Focus on the Rule Against Perpetuities, 8 Minn. J. L. Sci. & Tech. 277 (2007).

Here is the conclusion of his note:

Technology has advanced at rates far outpacing other facets of our intellectual lives; this is perhaps truer than in the field of biology than anywhere else. Despite the recognition over four decades ago of the problems that would be posed by advances in reproductive technology, the legislative and executive branches of our government have not seen fit to come up with a satisfactory solution. The courts have thus been left in a position where they must interpret laws that were written without contemplation of today's technology and decide how to apply them to situations never envisioned by the drafters. More troubling for the legal community is that court decisions can quickly be made obsolete by even further advances in technology. A comprehensive scheme must be adapted to deal with the advances in reproductive technology which takes account of past court rulings and common law principles, yet remains flexible enough to deal with situations that were not contemplated by the drafters of these rulings/principles.

Many options have been put forth for how to deal with the problems posed by advancing technology. Some of the earlier proposed solutions fail because they did not realize the eventual possibilities that would develop, nor the widespread implementation and success of the technology. Others are unsatisfactory because they do not realize that we are not starting on a clean slate, but must make any new scheme fit the basic principles of past rulings/principles.

When it comes to testate succession, it seems best to enact clear bright-line rules that are independent of current technological practices and that rely on best matching the decedent's intent with the original purpose of the Rule against Perpetuities. By disallowing the inclusion of posthumously conceived children from inclusion in an "all my children" clause, we ensure that estates will not be indefinitely held in trust, thereby decreasing their social utility. The same socially negative effect would be possible if testate clauses picking out all posthumously conceived children were allowed. By still allowing for testators to single out particular posthumously conceived children or determinable groups of posthumously conceived children, people are given the chance to ensure that their estate is distributed in the manner they most prefer.

By setting a firm cutoff for children to inherit under intestate succession, bereaved parties are given the opportunity to fulfill the wishes of deceased loved ones, even if those wishes were not explicitly stated in a will. The harshness of this cutoff is blunted by allowing posthumously conceived children to be eligible for Social Security survivor's benefits.

The proposal set forth in this article also takes into account current technology and possible advances in future technology, thus preventing situations encountered in the past when proposed solutions were shortsighted in scope.

Finally, this proposal falls within the framework laid out by the courts for intestate succession while maximizing the rights of the posthumously conceived child, without unduly burdening others in line for intestate succession. Similarly, the proposed methods for fixing problems relating to the Rule against Perpetuities provides for equal protection of equally situated posthumously conceived children, while trying to maximize respect for the decedent's wishes without undoing the purpose for which the rule was first enacted.

August 10, 2007 in Articles, Intestate Succession, Wills | Permalink | Comments (0) | TrackBack (0)

Organ Donation Chains -- The Federal Government Speaks

Organ_donorEarlier on this blog, I discussed the concept of a "kidney chain."  This technique has recently received the approval of the Department of Health and Human Services in its March 28, 2007 memorandum opinion entitled Legality of Alternative Organ Donation Practices Under 42 U.S.C. § 274(e).

Here is the summary of the opinion:

Two alternative kidney donation practices, in which a living donor who is incompatible with his intended recipient donates a kidney to a stranger in exchange for the intended recipient’s receiving a kidney from another donor or increased priority on a waiting list, do not violate the prohibition on transfers of organs for "valuable consideration" in 42 U.S.C. § 274e.

Special thanks to David Undis, founder of Lifesharers, for bringing this opinion to my attention.

August 10, 2007 in Death Event Planning | Permalink | Comments (0) | TrackBack (0)

The Charles Dickens-Estate Planning Interface

PardiggleThe following excerpt is from John Authers, Passing on wealth, Financial Times, July 9, 2007:

The Victorians had some lessons for the very rich who have been produced by the wealth-creation of the past decade.

The crucial question is whether the new breed of philanthropists will turn into a new generation of Mrs Pardiggles.

Mrs Pardiggle is one of the more loathsome characters in Charles Dickens’ Bleak House, the tragic story of a contested will. It is arguably literature’s greatest ever warning of the hazards of inadequate estate planning.

As well as lawyers, Dickens was also deeply sceptical about philanthropists. He divided them into two classes: “One, the people who did a little and made a great deal of noise; the other, the people who did a great deal and made no noise at all.” Mrs Pardiggle is in the former group.

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

August 10, 2007 in Books - Fiction, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Thursday, August 9, 2007

The Downfall of Custodial Accounts?

Piggy_bankIn Time to Swap Piggybanks, BusinessWeek, Aug. 6, 2007, at 88, Anne Tergesen explains that:

For years, parents have been stashing money in custodial accounts to fund their kids' college educations. They've saved on taxes, too, since a large portion of the bill is paid at the child's lower rate. But recent changes in the law sap so much of the tax savings from custodial accounts that state-sponsored 529 college savings plans, which are tax-free if used for education, are better deals. In fact, they're so much better that you may want to cash out your kids' custodial accounts and put the money in 529s.

How do you decide? Look at how long it is before your child matriculates, the amount of appreciation in the account, and the likelihood of qualifying for financial aid. For most families, "converting to a 529 account makes sense," says Sam Beardsley, director of investment tax for T. Rowe Price (TROW), a mutual fund company.

Custodial accounts, also known as UGMA/UTMA (Uniform Gifts to Minors Act/Uniform Transfers to Minors Act) accounts, can still be attractive for small sums. The first $850 in annual interest, dividends, and capital gains is tax-free, and the next $850 is subject to a child's low tax rates. Anything beyond that is assessed at the parents' marginal rates of up to 35% for interest income and 15% for qualified dividends and capital gains. In the past, once the child turned 14, the parents' rates no longer applied. But Congress recently extended the parents' tax rate to age 17 this year and to age 23 for dependent children starting in 2008. "The real benefit of the custodial account is gone," says Jim Sonneborn, a wealth manager at RegentAtlantic Capital in Chatham, N.J.

August 9, 2007 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Tennessee Authorizes Self-Settled Spendthrift Trusts and Modifies RAP

TennesseeThe following is from Naomi Snyder, Trust law protects assets from creditors, Tennessean.com, Aug. 5, 2007:

Tennessee has liberalized its trust law to make things easier for those who have millions or hundreds of thousands of dollars to protect.

For the first time, people can set up trusts in Tennessee to benefit themselves and still try to protect assets from creditors or lawsuits, a nice deal for people who have a lot of assets and a lot of liability, such as medical doctors or business owners.

Previously in Tennessee, someone setting up a trust to name himself as a beneficiary couldn't also enjoy asset protection from creditors. * * *

Eleven states allow asset protection for trusts in which the person setting up the
trust can name himself as beneficiary, getting, for example, a regular stream of income from the trust's investments.

Tennessee's new law, which went into effect in July, also allows for trusts that effectively last 360 years instead of 90 years — joining about 20 other states that have this provision.

The article also quotes our colleagues, Robert H. Sitkoff (Harvard Law School) and Max Schanzenbach (Northwestern University School of Law).

August 9, 2007 in New Legislation, Trusts | Permalink | Comments (0) | TrackBack (0)

Does your pet need Neuticles?

PetsAs discussed previously on this blog, the love owners have for their pets transcends 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 and state statutes.

I have recently learned of perhaps the most amazing trends in the pet industry -- Neuticles.  As reported in Diane Brady and Christopher Palmeri, The Pet Economy, Business Week, Aug. 6, 2007, at 45, 45:

* * * Neuticles [is] a patented testicular implant that sells for up to $919 a pair.  The idea, says inventor Gregg A. Miller, is to "let people restore their pets to anatomical preciseness" after neutering, thereby allowing them to retain their natural look and self-esteem.

The article also reports that over 240,000 pairs have been sold for a wide variety of animals including dogs, prairie dogs, water buffalo, and monkeys.

August 9, 2007 in Estate Planning - Generally | Permalink | Comments (1) | TrackBack (0)

Wednesday, August 8, 2007

Is Sumner Redstone Immortal?

RedstoneSumner Redstone, the chairman and controlling shareholder of Viacom and CBS, was quoted in Maria Bartiromo, Redstone 'Legacies are for Dead People,' BusinessWeek, Aug. 6, 2007, 28, at 31, as stating:

As John Malone said to me when I met with him recently at the Allen & Co. conference, "Some of us are going to die, Sumner, but you're never going to die, so you don't have to have a succcession plan." * * * You know I'm not going to discuss my will, my trusts, or whatever.  But, believe me, what I do, as I've done throughout my life, will be appropriate.

August 8, 2007 in Wills | Permalink | Comments (0) | TrackBack (0)

Texas Creates Organ Donor Registration Website

Organ_donor_texasThe following is from AP, New Web site launched for organ donor registration, Dallas Morning News, Aug. 7, 2007:

The Texas Department of State Health Services has created a new Web site for Texans to register as organ, tissue and eye donors, the agency said Tuesday.

Information about organ donation and instructions for registering online can be found on the new site, http://www.DonateLifeTexas.org. The site offers more educational information than the old one, a health department spokeswoman said.

"One donor can save or enhance the lives of more than 50 people with gifts of organs, tissues and eyes," Evelyn Delgado, assistant commissioner for the department's family and community health services, said in a news release.

August 8, 2007 in Death Event Planning | Permalink | Comments (0) | TrackBack (0)