Wills, Trusts & Estates Prof Blog

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

Thursday, March 27, 2008

Rector v. Commissioner Analyzed

Steve R. Akers (Bessemer Trust, Dallas, Texas) has recently published his article entitled Rector v. Commissioner, TC Memo 2007-367, RPPT eREPORT (Feb. 2008).

Here is a summary of his article as posted on RPPT eREPORT:

The Tax Court finds an implied agreement under §2036 and applies the section to the assets contributed to the FLP rather than to the gifts of LP interests under a “single plan” analysis.

March 27, 2008 in Articles, Estate Tax, Gift Tax | Permalink | Comments (0) | TrackBack (0)

Making Gifts to Heirs Now May Reduce Taxable Value

The following is from Brett Arends, Market Turmoil Creates Opening To Enrich Heirs, online.wsj.com, March 15, 2008:

It isn't all bad news. This winter's market turmoil is creating a golden opportunity to pass on stocks, mutual funds or other appreciating assets to your heirs.

Plunging stock prices mean you can give more of those assets under the gift-tax ceiling, while the collapse in long-term interest rates has suddenly widened a little-known tax loophole on certain estate-planning trusts.

Put the two together and you could save a bundle on taxes by making bequests right now, especially if you've got an estate in the millions.***

The bottom line is that making the gift this way can slash the taxable value, allowing you to pass more to your heirs.***

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

March 27, 2008 in Estate Planning - Generally, Estate Tax, Trusts | Permalink | Comments (0) | TrackBack (0)

Testators’ Right to Compensate Caregiving Children Should Be Preserved

Screenhunter_01_mar_27_1046Joshua C. Tate (Assistant Professor, Southern Methodist University Dedman School of Law, Visiting Assistant Professor, University of Pennsylvania Law School) has recently posted on SSRN his article entitled Caregiving and the Case for Testamentary Freedom

Here is an abstract of his article:

Almost all U.S. states allow individuals to disinherit their descendants for any reason or no reason, but most of the world's legal systems currently do not. This Article contends that broad freedom of testation is defensible because it allows elderly people to reward family members who are caregivers. The Article explores the common-law origins of freedom of testation, which developed in the shadow of the medieval rule of primogeniture, a doctrine of no contemporary relevance. The growing problem of eldercare, however, offers a justification for the twenty-first century. Increases in life expectancy have led to a sharp rise in the number of older individuals who require long-term care, and some children and grandchildren are bearing more of the caregiving burden than others. Recent econometric studies, not yet taken into account in legal scholarship, suggest a tendency among the American elderly to bequeath more property to caregiving children. A competent testator, rather than a court or legislature, is in the best position to decide how much care each person has provided and to reward caregivers accordingly. Law reform, therefore, should focus on strengthening testamentary freedom while ensuring that caregivers are adequately compensated in cases of intestacy.

Joshua is interested in readers’ comments on his article. You can submit your comments by contacting Joshua by e-mail at jtate@law.upenn.edu.

March 27, 2008 in Articles, Wills | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 26, 2008

Why people fake their death

Screenhunter_02_mar_26_1037In Missing Persons, published in the March 2008 issue of The Estate Analyst, Robert L. Moshman, Esq. discusses different instances where people have faked their own death:

Sometimes people fake their own deaths to escape marriage or criminal prosecution or to collect life insurance. In a recent case, John Darwin escaped financial difficulties and was believed lost at sea. His wife collected on two insurance policies. But five years later, Darwin returned “smelling dreadful” and ultimately was discovered and arrested.***

Former congressional candidate Gary Dodds was recently convicted of faking his own death in New Hampshire, with the possible motive of gaining a sympathy vote.***

Typically, faking one’s own death can range from a misdemeanor (such as for false swearing) to a felony (such as fraud).

March 26, 2008 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

French woman bequests all to her native village but with conditions attached

Screenhunter_01_mar_26_1002Helene Louart, who lived most of her life in Paris, retired in her native village in France’s Loire valley. She left all of her possessions amounting to 1,250,000 million euros to the village, but with controversial conditions attached.

For instance, Ms. Louart's house is to be sold only to a Parisian, all of her money must be used to build social housing, and the main street is to be renamed after her.

This interesting news video entitled Woman gives French village tricky choice from beyond the… is available online at cosmos.bcst.yahoo.com.

March 26, 2008 in Current Events, Wills | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 25, 2008

Law School Rankings

The following is posted as per the request of Edward A. Adams, Editor and Publisher of the American Bar Association Journal:

Because you’re a blogger who is a member of the legal education community, we thought you and your blog’s readers would be interested in an ABA Journal cover story about U.S. News & World Report’s law school rankings that was posted today (http://www.abajournal.com/magazine/the_rankings_czar/). And we’re holding a live online chat next month with the rankings czar from U.S. News in which you can participate.

Robert Morse, the man who created the law school rankings for U.S. News, offers an olive branch to law school deans who have long complained about the effect of the rankings on legal education. “Deans are welcome to call me or come by my office in Washington,” Morse says. “I want to work with them to improve the rankings.”

Some deans and former deans think they should engage the magazine, rather than just complain about it. “I think rankings need to be changed, and the only way that will happen is if law school deans sit down with Bob Morse for honest discussion,” says Nancy Rapoport, who resigned as dean of the University of Houston Law Center after her school dropped almost 20 points in the rankings. “I would attend a meeting like that without hesitation.”

This year’s U.S. News law school rankings are scheduled to be released this Friday, March 28.

Morse will be taking questions from the public on ABAJournal.com on Friday, April 11, from 3 to 4 p.m. ET. We hope you and your readers will participate.

March 25, 2008 in Teaching | Permalink | Comments (0) | TrackBack (0)

Estate Planning for Pets

Screenhunter_01_mar_25_1837Rachel Hirschfeld (Attorney at law, Law Offices of Rachel Hirschfeld) has recently published her article entitled Ensure Your Pet's Future: Estate Planning for Owners and Their Animal Companions, 9 Marq. Elder's Advisor 155 (2007).

Here is an excerpt from the conclusion to her article:

Animal companions play a significant role in many people's lives, and many pet owners view their animal companions as valued members of their family and treat them as such.***

There are two kinds of animals: those who are abandoned and abused, and those who are raised in loving homes. The goal for owners who raise their pets in loving homes is to ensure their pets have a loving future, a smooth transition into a life chosen by the owners, and a life with people who will care for and about them. This is the reason owners may write pet trusts and pet protection agreements. Once an owner has adopted a pet, regardless of the way in which the pet came to the owner, the owner is responsible for the pet for the rest of the its life. A pet trust or pet protection agreement can help the owner fulfill this duty.***

It is important for an owner to create a pet trust that includes detailed instructions for the care of all animal companions. The pet trust and pet protection agreement should name a pet guardian to take custody of the pet and follow the detailed instructions for the pet's care, and name a successor pet guardian, trustee and successor trustee. Furthermore, if the pet trust does not include instructions on how to convey future funds, sufficient funds should be transferred to the trust or agreement for the pet's care. Pet trusts and pet protection agreements are ideal tools to use to help owners and their pets remain together, to ensure that pets are well-cared for, and to establish procedures for legally transitioning pet ownership.

March 25, 2008 in Articles, Trusts | Permalink | Comments (0) | TrackBack (0)

Holographic Wills - A Beneficial Tool in Estate Planning

Screenhunter_01_mar_25_1453Stephen Clowney (Visiting Assistant Professor of Law, Oklahoma City University School of Law) has recently posted on SSRN his article entitled In Their Own Hand: An Analysis of Holographic Wills and Homemade Willmaking.

Here is an abstract of his article:

Holographic wills - wills that are handwritten and unwitnessed - are traditionally thought of as a risky, do it yourself brand of estate planning. In the author's view, this is wrong. Using two years' of probate records from Pittsburgh, Pennsylvania, this Article demonstrates that holographs are an indispensable tool for testators who are either unwilling or unable to commission a traditional will. Homemade testaments provide a low-cost alternative to intestacy, improve the overall quantity of will-making, function as a safety-net for testators who fall suddenly ill, and rarely result in litigation. The triumph of holographic wills also suggests, strongly, that state legislatures should consider reducing the number of requirements necessary to create a formal, attorney-authored will.

March 25, 2008 in Articles, Wills | Permalink | Comments (0) | TrackBack (0)

Firing a Trustee – Difficult to Do?

The following is from Fran Hawthorne, Breaking Up Is Hard to Do, NYTimes.com, March 18, 2008:

As a family trust moves into its second and third generations, it is almost inevitable that someone will be unhappy with a trustee.***

Dissatisfaction with trustees — particularly corporate trustees rather than individuals — has been growing over the last five years, those experts say. Most complaints center on investment performance, mostly because beneficiaries have become more financially sophisticated and more types of investments are now available.***

Experts disagree on how difficult it is to win a trustee-dumping case. Mr. Dardaman said that evidence like a log showing a long spate of unreturned phone calls or proof of poor investment returns could convince a judge. But Mr. Kahn said such complaints were not enough. “You have to do something egregious before the court will fire you as a trustee,” he said, like putting trust assets into an investment where the trustee has a personal interest. “The court may simply say you owe some money back to the trust.”***

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

March 25, 2008 in Trusts | Permalink | Comments (0) | TrackBack (0)

Monday, March 24, 2008

Representation in Estate and Trust Proceedings Analyzed

Screenhunter_05_mar_24_1200Martin D. Begleiter (Ellis and Nelle Levitt Distinguished Professor of Law, Drake University Law School) has recently posted on SSRN his article entitled Serve the Cheerleader - Serve the World: Representation in Estate and Trust Proceedings and under the Uniform Trust Code and other Modern Trust Codes

Here is an abstract of his article:

This article is an in-depth examination of representation in estate and trust proceedings of one person (or class of persons) by a person who is already a party to the action. A person who is represented by another party need not be made a party to the proceeding for the judgment to be binding on such person, thus enabling the action to proceed without minors, unborns and persons under disability. The doctrine arose in England and was used in the United States in the early 1800's in cases involving multiple parties. In estate and trust proceedings, a restricted form of the doctrine was recognized at common law and in the first Restatement of Property. The doctrine was greatly expanded by New York legislation enacted in 1967, the elements of which have been adopted by many other jurisdictions, either by statute or case law. The use of representation is desired by attorneys, since it avoids the expense of appointing a guardian ad litem for unborns, minors and persons under a disability. The Uniform Trust Code and other modern trust codes have greatly expanded the uses of representation, creating substantial risks that judgments will not be binding on parties alleged to be represented. This article explores those risks and suggests changes in the representation doctrine. This draft of the article has not yet been edited by the Real Property, Probate and Trust Journal.

March 24, 2008 in Articles, Estate Administration, Trusts | Permalink | Comments (0) | TrackBack (0)