Wills, Trusts & Estates Prof Blog

James Bruce Coffman Dies -- Organ donees lose hero

It is with great sadness that I report that James Bruce Coffman (J.B.), died on January 19, 2008 in Houston, Texas.  The following is from his obituary in the Houston Chronicle:

He was a loving husband to his wife Pepi, an amazing dad, a doting granddad, a valued mentor and a loyal friend. He earned the respect of everyone who knew him.***

   

One of J.B.'s proudest achievements was as founder and chairman of Oil Industry Lifesaving (OIL) Flights, which used petroleum corporate aircraft during the 1980's to aid organ transplant recipients. J.B. recruited 47 petroleum companies to form a fleet of 56 corporate aircraft that donated emergency flights for organs, surgical teams and/or organ recipients and their families at a time when there were limited transplant centers in the United States.

Estate and Business Planning Conference

On February 7 and 8, 2008, the Southern California Institute is sponsoring a conference entitled The Gathering 2008 in San Diego, California. Here is a summary of the program:

The Gathering is a yearly event primarily for advisors in Estate and Business planning. In today’s world no one person can be an expert in all areas of estate, business, tax, and wealth planning.

Some of the topics to be covered include:

·         What’s New – The Heckerling Update

·         Retirement Planning Update

·         New IRS Appraiser & Appraisal Requirements

·         ILIT Rescue Strategies

·         Online Client Data Access

·         Putting Heckerling Into Our Wealth Plans

·         World Class Retail and Wholesale Seminars

·         Corporate Trustee Advantages & Opportunities

·         Asset Protection Planning in 2008

·         "Circle of Friends" Black-Tie Optional Gala

Property of unmarried couple to be equitably divided upon the death of both parties

Washington law has long recognized that property acquired jointly during the existence of a committed intimate relationship is subject to equitable distribution between the parties on the termination of the relationship.

In Olver v. Fowler, 168 P.3d 348 (Wash. 2007), the court held that the doctrine applies when both parties are dead, requiring an equitable division of property between the two estates before a will or the intestacy statute applies to the property.

Beneficiary has no standing to challenge the actions of a trustee while the settlor can revoke

Father created a revocable trust with himself and his son as co-trustees.  Before his death, father sold stock held in the trust to his son.

After the father’s death, his daughter, who is a beneficiary of the trust, brought suit against the son several grounds including beach of duty and negligence.

Describing this as a case of first impression, the court held that the daughter lacked standing to complain about the settlor’s actions with regard to trust property which occurred while the settlor had the power to revoke.  Moon v. Lesikar, 230 S.W.3d 800 (Tex. App. 2007).

Withdrawal of a will from probate does not revive a prior will

After the decedent’s 2001 will was admitted to probate, the nominated executor withdrew the will from probate and offered the decedent’s 1973 will for probate.  The 2001 will included a clause revoking all prior wills.  The 1973 will was then admitted for probate.

   

On appeal, the court held that if the 2001 was validly made and executed, the 1973 will was revoked and not entitled to probate.  Estate of Woodfield, No. 2004-CT-00238-SCT, 2007 WL 3197739 (Miss. Nov. 1, 2007).

Qualifying for a Charitable Deduction

Prof. Wendy Gerzog (Professor of Law, University of Baltimore School of Law) has recently posted on SSRN her article entitled The Strict Rules of Charitable Split Interest Gifts.  Her article also appears in Tax Notes, Vol. 118, No. 5, 2008.

Here is the abstract of her article:         

When giving both to your family and to your charity, you must follow the rules carefully to qualify for a charitable deduction. The article discusses the recent Tamulis case, other split interest charitable deduction cases, and the doctrine of substantial compliance.

New Jersey Has the Highest Percentage of Millionaire Households in the Nation

According to New Jersey Has Highest Percentage of Millionaire Residents, Jan. 9, 2008, phoenixmi.com:

The Phoenix Affluent Marketing Service, a Phoenix Marketing International practice, announced today that New Jersey has become the state with the largest percent of millionaires to total households. Ranked second past two years, New Jersey vaulted past Hawaii, which fell to fourth in the 2007 rankings.***

“Traditional East Coast concentrations of wealth have continued to outperform most of the rest of the country,” says David Thompson, Managing Director of the Phoenix Affluent Practice. “This is a function of three factors: high levels of education; access to top paying jobs in finance and technology; and a stock market that has advanced over the past four years,” notes Thompson.***

The complete states’ rankings for 2005 through 2007 are available by visiting the Phoenix site at http://www.phoenixmi.com/prfiles/State_Rankings_Millionaires_2005-2007.xls.***

Special thanks to Neil E. Hendershot, Esq. (Attorney at law, Goldberg Katzman, P.C., Adjunct Professor, Widener University School of Law) for bringing this article to my attention.  You can read more on Neil's blog at PA Elder, Estate & Fiduciary Law Blog.

Trustee’s lack of diversification was not unreasonable

The beneficiaries of testamentary and lifetime trusts which were invested in common stock of a closely held business objected to the trustees’ accountings alleging liability for failure to diversify.

The court affirmed the dismissal of the objections, holding that retention did not violate New York’s version of the prudent investor rule because the stock was particularly unmarketable given the capital structure of the corporation, the high dividend payout served the beneficiaries’ needs, the settlors used the trust as a device for insuring that ownership of the corporation remained in the family, and the corporate co-trustee regularly explored selling the stock and kept well informed of the corporation’s financial situation.  In re Hyde, 845 N.Y.S.2d 833 (N.Y. App. Div. 2007).

Real property not transferred to a trust passes with stock of a holding company

The testator’s will poured over the residue of his estate to his lifetime trust which directed the trustee to distribute to named persons certain parcels of real property owned by a corporation of which the testator was sole shareholder.

   

The testator never transferred ownership of the realty to the trustee and at his death the realty was still owned by the corporation.  All the shares poured over to the trust, the residue of which passed to the testator’s widow.  The trust beneficiaries of the realty sued the widow as successor trustee seeking to surcharge her for refusing to distribute the realty to them.

   

The court in Vaughan v. Boerckel, 963 So. 2d 915 (Fla. Dist. Ct. App. 2007), affirmed judgment for the widow, holding that the failure to transfer title to the realty to the trustee meant that title remained in the corporation all the shares of which passed to the widow.

Survey Shows Americans Prefer to Hang on to Their Retirement Accounts

The following is from Eileen Alt Powell, Americans Delay Spending IRAs, sfgate.com, Jan. 27, 2008:

Americans who have money stored in Individual Retirement Accounts tend to hang on to it for use in the later years of their retirement, according to a study being released Monday.

The Investment Company Institute, a Washington, D.C.-based trade association, found that less than one-fifth of households with IRAs made withdrawals from their accounts in tax year 2006, with the typical withdrawal averaging about 6 percent of the balance.***

She said that other studies have found that people want to hang on to their IRA money as long as possible to preserve the tax advantages.***

The greatest growth has come from assets rolled over into IRAs from employer-sponsored accounts like 401(k)s, the study said. In tax year 2006, just 14 percent of U.S. households made contributions directly to IRAs, it said.***