Wills, Trusts & Estates Prof Blog

Mirror of Justice Blog declares "war" on Wills, Trusts, & Estates Prof Blog

Richard W. Garnett (Professor of Law, Notre Dame Law School) has recently declared "war" on our blog in a posting yesterday on the Mirror of Justice Blog.

According to his October 30, 2008 post:

Take a brief break from thinking about Faithful Citizenship and, instead, send an e-mail to 5 friends who might not read MOJ and urge them to add it to their "bookmarks."  Our motto can be "Beat the Wills, Trusts, & Estates Prof. Blog in 2009!"

Prof. Garnett also explains in his posting:

Prof. Paul Caron has posted the latest law-prof-blog rankings; unfortunately, because we were late getting our site-meter set up, Mirror of Justice was not eligible.  However, it looks to me -- if one extrapolates from the available site-meter data -- that MOJ would rank somewhere around 22 in both "visits" and "page views".

Negligent Estate Planner Placed on Probation

A Texas lawyer recently received a two-year suspension from the practice of law which was in a most lenient fashion fully probated.

Here is a description of her sloppy behavior as reported in Disciplinary Actions, 71 Tex. B.J. 766, 767 (2008):

A panel of the District 7-A Grievance Committee found that in September 2006, the complainant hired [Attorney] to prepare a living trust and a family limited partnership.  [Attorney] subsequently neglected the complainant’s legal matter by failing to complete the work on the living trust and by preparing and filing a certificate of limited partnership with incorrect provisions for the complainant’s grandchildren. [Attorney] subsequently failed to return several of the complainant’s phone calls and failed to keep him reasonably informed regarding the status of his case.

Fiduciary Duty and Utah's School and Institutional Trust Lands Administration

Jan McCosh-Hilder (J.D. Candidate, S.J. Quinney College of Law at the University of Utah) recently authored  an article entitled SITLA and Legislative Oversight – Wise Long-Term Direction Under Evolving Charitable Trust Duty, or Shortsighted Micromangement?, 29 J. Land Res. & Envtl. L. 393 (2008).

Here is an excerpt from the conclusion:

Under the current statutory construction of SITLA, and the present common-law definition of fiduciary duty, it is likely that SITLA's real estate development does not violate the duty to protect and preserve the trust corpus, and the legislature should forebear from micromanaging the day-to-day business activities of SITLA as it is discharging its present obligations. A more worthy objective is the development of a sustainable land-use policy. The legislature could advance this goal by either (1) amending Section 53C-1-202 of Utah Code Annotated, the statute directing the composition of the Board of Trustees, or (2) completing a study of state-wide land conservation needs and designating by Constitutional amendment, a portion of school trust lands protected from development for the benefit of future generations of the State's school children.

The Commercial Real Estate/Estate Planning Interface

The American Bar Association Section of Real Property, Trust and Estate Law and the ABA Center for Continuing Legal Education are sponsoring a teleconference and live audio webcast on November 19, 2008 entitled Estate Planning for the Commercial Real Estate Client: A Conversation Between Estate and Real Property Lawyers.

Here is a description of this program:

Estate planning clients often hold commercial real estate for investment or active development and management.  As a result, estate planning lawyers often confront real estate issues, and real estate lawyers must also keep in mind the estate planning goals of their clients.  This program will explore these issues, with a focus on transfers of real estate and real estate holding entities for estate planning purposes. The panel will explore common estate planning techniques applicable to owners of commercial properties and will also discuss the complications relating to transfers of property subject to loans, tenant leases and other common commercial real estate issues.

Topics to be covered include:

• Reorganizations and holding company structures
  • What type of entity should be used?
  • Where should it be formed?
  • What type of conveyance documents should be used?
• Requirements for lender notice or consent
• Title insurance implications
• The potential to trigger state and local tax law issues
• Common estate planning techniques
  • Use of trusts
  • Gifts of fractional interests in entities
• Provisions to include in trust agreements to address real estate holdings
• Provisions to include in operating agreements to address trust members
• Preparing for subsequent transfers on the client's death or on termination of a trust

Happy Halloween

Many law school classes have one or more holidays which are especially relevant.  For example, Family Law has Valentine's Day, Mother's Day, and Father's Day, Labor Law has Labor Day, Environmental Law has Earth Day, Military Law has Memorial Day, and Law and Religion has Christmas, Hanukkah, Ramadan, etc.

Halloween, with its fascination with death, may be the most relevant holiday to those who teach wills, trusts, estates, probate, and estate planning. So, however you celebrate, have fun and be safe!

Annuity Valuation

Prof. Wendy Gerzog (Professor of Law, University of Baltimore School of Law) has recently posted on SSRN her article entitled Anthony: Absolute Actuarial Tables which also appears in Tax Notes (Vol. 121, No. 4, 2008).

Here is the conclusion of her article:

The mandate in section 7520 to use tables inherently accepts a lack of a correlation between the value as computed using the facts of an individual case and the value computed under the actuarial tables. When their use is required by section 7520, the tables provide a substitute for a facts and circumstances determination of value. In so doing, their appeal is simplicity and ease, not accuracy or equivalence to fair market value in a particular case. As the Supreme Court stated in Ithaca Trust, the use of the tables indicates ‘‘the intention of the lawmakers . . . that the computation of the tax should be made . . . on the basis of a law of averages.’’ That means that since the tables only reflect accurate measures of value in the average case, an individualized facts and circumstances analysis would most often correlate better with the actual value of an annuity than values computed by means of the actuarial tables. Therefore, because Congress has mandated their use, facts that merely individualize valuation rather than undermine the factors integral to the assumptions of the tables should be ignored. Thus the Anthony court correctly applied section 7520 and disregarded non-marketability in valuing the decedent’s annuities.

Do same-sex couples need multiple marriages?

The following excerpts are from Phred Dvorak, Why Just One Wedding Isn't Enough for Some Gay Couples, Wall St. J., Oct. 30, 2008:

Three states recognize same-sex marriage. Eight others, plus more than 70 cities, offer civil unions or domestic partnerships with varying rights. The laws can affect everything from discounts on car rentals to hospital-visiting rights. None are recognized by the federal government for matters such as immigration, income taxes and Social Security benefits. The rules can change quickly. * * *

Same-sex couples say they currently need multiple unions to cover the nation's uneven legal patchwork. States such as Massachusetts and New York recognize out-of-state same-sex marriages but don't recognize domestic partnerships. The reverse is true in Washington and Oregon, which recognize gay domestic partnerships but restrict marriage to a man and woman, says Jennifer Pizer, a senior counsel with Lambda Legal Defense and Education Fund, a gay civil-rights organization.

Ms. Pizer says she urges couples to obtain both a marriage and a domestic partnership. "We advise people to have a belt and suspenders, and then another pair of belt and suspenders," she quips.

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

Qualified Personal Residence Trust use increases with drop in real estate prices

Because of the decrease in the fair market value of homes in many parts of the country, the use of Qualified Personal Residence Trusts (QRPTs) is becoming more advantageous.

The following excerpts are from Mike Spector, Gifting Your House and Living in It, Too, Wall St. J., Oct. 30, 2008:

Plunging real-estate values have made it an opportune time for older homeowners to give property to their children, while realizing big savings on gift and estate taxes.

They can do this by moving the home out of their estate with a so-called qualified personal residence trust, or QPRT, which allows homeowners to live in a property for many years before passing it on to their heirs. Though the trusts have been around for many years, many estate planners say now could be a good time to set one up since real-estate values have fallen dramatically in many markets. * * *

The goal: Put beaten-down assets into trusts now and reap benefits from their appreciation outside of your estate. With real-estate values low, executing a QPRT now ensures your estate won't contain a more-expensive home down the road, which could trigger a costly tax bill for your estate.

By transferring your home into a QPRT * * * when the value of your home is most likely at a low point, you're effectively locking in a lower gift-tax amount when you move the home into the trust. And if interest rates move higher in the months ahead, that discount could be even greater because of the special method the Internal Revenue Service uses to compute the home's gift-tax value.

The article also discusses how the technique operates to save taxes as well as the risks associated with QPRTs.

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

Blog ranked #22 among blogs edited by law professors

The Wills, Trusts, & Estates Prof Blog ranks #22 in popularity among blogs edited by law professors with publicly available SiteMeters for the most recent 12-month period (October 1, 2007 - September 30, 2008).

To all my readers, I greatly appreciate your support and contributions.

Assisted eating and drinking -- Ethical issues

Robert L. Fine (MD, FACP, Office of Clinical Ethics, Baylor Health Care System; Palliative Care Consultation Service, Baylor University Medical Center, Dallas, Texas) has recently reprinted his article in the Fall 2008 issue of The Journal of the National College of Probate Judges entitled Ethical Issues in Artificial Nutrition and Hydration.

Here is the abstract of Dr. Fine's article:

From the time of Hippocrates, approximately 2500 years ago, medical ethics has been seen as an essential complement to medical science in pursuit of the healing art of medicine. This is no less true today, not only for physicians but also for other essential professionals involved in patient care, including clinical nutrition support practitioners. One aspect of medical ethics that the clinical nutritionist must face involves decisions to provide, withhold, or withdraw artificial nutrition and hydration. Such a decision is not only technical but often has a strong moral component as well. Although it is the physician who writes any such order, the clinical nutritionist as fellow professional should be a part not only of the scientific aspects of the order but of the moral discourse leading to such an order and may certainly be involved in counseling physicians, other healthcare providers, patients, and families alike. This paper is intended to give the clinical nutritionist a familiarity with the discipline of medical ethics and its proper relationship to medical science, politics, and law. This review will then offer a more specific analysis of the ethical aspects of decisions to initiate, withhold, or withdraw artificial nutrition and hydration (ANH) and offer particular commentary on the ethically significant pronouncements of Pope John Paul II in March of 2004 related to vegetative patients and artificial or "assisted" nutrition and hydration.