Wills, Trusts & Estates Prof Blog

Annual Meeting Program for AALS Section on Trusts and Estates Announced

The AALS Section on Trusts and Estates is pleased to announce the program for the Annual Meeting on Saturday, January 9, 2010

1. Phyllis C. Smith, Associate Professor, Florida A&M University College of Law: The Estate and Gift Tax Implications of Domestic Asset Protection Trusts
   
   Comment: Lee-ford Tritt, Associate Professor, Director of Center for Estate and Elder Law Planning and Estates and Trusts Practice Certificate Program; Associate Director, Center on Children and Families, University of Florida, Levin College of Law.
2. Robert Whitman, Professor of Law, University of Connecticut School of Law: Fiduciary Accounting Statutes for the 21st Century 
   
   Comment: Bridget Crawford, Professor of Law; Associate Dean for Research and Faculty Development, Pace Law School
3. Iris Goodwin, Associate Professor, University of Tennessee College of Law: How the Rich Stay Rich: Using A Family Trust Company To Secure A Family Fortune
   
   Comment: Jeffrey Cooper, Associate Professor of Law, Quinnipiac University School of Law

When Bankruptcy and Probate Collide

Lorman Education Services is offering a CD set or podcast and manual of a teleconference entitled When Worlds Collide - Bankruptcy and Probate.  A description of the teleconference is below:

Until the U. S. Supreme Court's 2006 decision in Marshall v. Marshall, 547 U.S. 293 (2006), there was a common belief among many bankruptcy and probate practitioners that the so-called probate exception to federal jurisdiction served to prevent bankruptcy courts from adjudicating any matters that were related, even only slightly, to a probate estate. In giving a very narrow interpretation to the probate exception to federal jurisdiction within the context of bankruptcy jurisdiction, the Supreme Court's ruling in Marshall clearly grants bankruptcy courts with the authority to adjudicate matters that could have an impact on probate proceedings. This teleconference will help you (a) analyze and determine what issues a bankruptcy court may adjudicate notwithstanding the possible effect on a probate estate, (b) analyze and determine when a bankruptcy court must abstain and when it may abstain from adjudicating issues that have an impact on a probate estate, (c) know what effect the death of a debtor while a bankruptcy proceeding pending has on that proceeding, (d) understand how the Bankruptcy Code's automatic stay provisions affect a probate proceeding and (e) when a disclaimer by a beneficiary of a testamentary bequest or devise, an intestate inheritance or a nontestamentary disposition may or may not be set aside in the beneficiary's bankruptcy proceeding.  

Dying at Home May Not Be As Peaceful For Loved Ones

When a loved one chooses to die at home, the family should prepare to the fulfill certain post-death requirements, including:

• Determination by a licensed professional that the person is actually deceased.
• Completing a death certificate properly.
• Selecting an undertaker.
• Contacting law enforcement, who must determine that there was no foul play.

These requirements can be difficult for a grieving family, requirements that hospitals or hospice care facilities routinely fulfill.

See Kent Sepkowitz, Dignity in Dying, Newsweek, Sept. 26, 2009.

Texas Estate Planning and Probate Drafting CLE

TexasBar CLE presents the 20th annual Estate Planning and Probate Drafting Course.  The course will be presented live in Dallas on Oct. 29 & 30 and will be presented by video in Houston on Dec. 2 & 4.

Course highlights include:

• Forms from Around the State: When and How to Use Them (and When Not to)
• Drafting to Win: Winning the Will Contest on the Front End
• How to Undo What the Client Has Done
• Pleadings, Discovery Requests for Will Contest, Trust Disputes, and Fiduciary Litigation
• Electronics and Paperless Impact on the Drafting Process

Various Madoff Relatives Face Lawsuits from Madoff Bankruptcy Trustee

Irving Picard, the court appointed Bernard Madoff bankruptcy trustee, plans to sue two of Madoff's sons, a brother, and a neice for negligence and breach of fiduciary duty in their roles as part of Madoff's business.  According to Picard, these individuals received more than $150 million dollars from Madoff's business.  These lawsuits are part of Picard's quest to recover money for victims of Madoff's ponzi-shceme, and follow a lawsuit against Madoff's wife.

See Joanna Chung, Madoff family members facing lawsuit, Fin. Times, Sept. 27, 2009; see also my prior post.

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

Alternative Reproductive Technologies Create Posthumous Heirs & Legal Problems

Charles P. Kindregan, Jr., (professor of law, Suffolk University) has posted on SSRN his article entitled Dead Dads: Thawing an Heir from the Freezer, 35 William Mitchell L. Rev. 433 (2009).

The abstract of the article is below:

In Dead Dads: Thawing an Heir from the Freezerthe author examines the difficult legal problems created by the growing practice of using the cryopreserved gametes of deceased persons to conceive a posthumous child. The law has long recognized the legal parental status of a man whose fetus is in utero in his wife's pregnancy at the time of the father's death, but developments in reproductive science has now made it possible to conceive a child after either a parents' death. This has been made more complicated by the use of assisted reproduction by unmarried persons, its growing use by same-sex couples and the developing marketplace for stored sperm, eggs and embryos. The science of preserving sperm or embryos by cryopreservation is a fact, and research is improving the preservation of eggs as well. However, the law has been slow to deal with the post-death conception of a child. An optional section of the Uniform Parentage Act, the new A.B.A. Model Act Governing Assisted Reproductive Technology (2008) and new additions to the Uniform Probate Code (2008) signal an attempt to change this, but except for a California statute and minor efforts by other jurisdictions, states have not attempted to deal with this by statute. Instead, the courts have had to struggle with the issued in the context of social security rights, disputes over the ownership of cryopreserved embryos, or the interpretation of gratuitous transfer instruments. The author argues that there is no legitimate reason for treating posthumous children differently from other children, although recognizing that legislatures should enact laws to deal with issues such as efficiency in timely estate distribution.

This article was drafted before and does not examine the recently proposed amendments to the Uniform Probate Code dealing with posthumous reproduction and which if enacted by the states would comply with the author's urging support for uniform legislation on the subject.

Illinois Court Declines to Invalidate Religious Marriage Condition Placed on Inheritance

In re Feinberg, 2009 Ill. Slip Op. 106982 (SC Sept. 24, 2009): The Illinois Supreme Court decided whether to invalidated an inheritance condition based on marrying within the Jewish faith.  Below is the case summary for the case provided by the Supreme Court of Illinois:

Max Feinberg, who died in 1986, left a wife, Erla, two adult children, and five grandchildren. He had executed a will that created trusts from which his widow would receive income during her lifetime. At her death, the trust assets were to be combined, and half of these assets were to be held in trust for the benefit of the grandchildren during their lifetimes, provided they had not married out of the Jewish faith, in which case they were to be “deemed deceased” on the date of such a marriage. Shares of such “deceased” grandchildren would revert to the settlor’s two children. Between 1990 and 2001, all of the five grandchildren married.

Distribution of decedent’s assets did not go according to this original plan, however, because Max also gave his widow a limited lifetime power of appointment as to his descendants which she exercised in 1997. Instead of lifetime trusts, she directed that, at the time of her death, fixed $250,000 sums be given to each of her two children and to each of her five grandchildren. She provided, however, that, as to the latter, her husband’s religious-restriction clause must be complied with. Erla died in 2003. By this time, although all the grandchildren had married, only one had complied with the religious restriction.

This situation resulted in several different proceedings which were consolidated in the circuit court of Cook County. The religious-restriction clause was invalidated there as contrary to public policy, and the appellate court affirmed.

In reaching a different result, the Illinois Supreme Court found that the issue is not Max’s original scheme of lifetime trusts for the grandchildren, but the distribution which was authorized by Erla, giving out fixed sums at the time of her death. The supreme court declined to hold the religious-restriction clause void. The grandchildren had no vested interests and Erla had merely created a condition precedent that operated on the date of her death to determine who was qualified to take. The supreme court said Erla was free to make a distribution in favor of grandchildren whose lifestyles were approved of over other grandchildren who made choices which were disapproved of.

The judgment of the appellate court was reversed, and the cause was remanded to the circuit court for further proceedings.

For a discussion of this case, see Christopher Wills, Ill. high court OK's 'Jews only' inheritance, AP, Sept. 24, 2009.  The article notes that because the will provided for inheritance based on marriage status at the time of Erla's death, the provision did not attempt to control marriage choices or act as an incentive for divorce.  The ruling did not address whether the religious marriage restriction would be valid under other circumstances.

Special thanks to Lynne M. Bahrami (J.D. Candidate, University of North Carolina) and William P. LaPiana(professor, New York Law School) for bringing this case and article to my attention.

Illinois Will Repository Statute

Helen W. Gunnarsson (Highland Park, Illinois attorney and writer) explains the operation of the new Illinois law authorizing the creation of a repository for attorneys to deposit original wills for long-lost clients in Illinois’ New Will Repository Law, 97 Ill. B.J. 330 (2009).

 

More on Assisted Suicide Guidelines in England

As previously noted, the top prosecutor in England released factors his department would use in deciding whether to prosecute under the country's assisted suicide ban.

These guidelines were ordered after noteworthy assisted suicide cases forced the issue to the forefront:

• At 23, a paralyzed rugby player ended his life at Dignitas Clinic in Switzerland.
• A  woman with multiple sclerosis asked the courts to decide whether her husband would be prosecuted for accompanying her to Dignitas.

According to one source, the guidelines were expected to make clearer the distinction between assisting a suicide and encouraging a suicide. Time will tell if this expectation was fulfilled.

See John Arlidge and Sarah-Kate Templeton, The farewell of an assisted suicide, TimesOnline, Sept. 20, 2009; Sarah-Kate Templeton and David Leppard, Campaigners win the fight to legalise assisted suicide, TimesOnline, Sept. 20, 2009.

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

Acceptable Nontax Purposes for Family Limited Partnership Investments

Prof. Wendy Gerzog (University of Baltimore School of Law) has published her article entitled Miller: Effective FLP Line Drawing, Tax Notes, Vol. 124, No. 12 (2009).  The abstract is below:

Miller is a decision on family limited partnerships (FLPs) with effective line drawing. The case is particularly helpful to distinguish the types of investment activities that constitute an acceptable nontax purpose under the Bongard criteria. The opinion further provides some guidelines on the factors of age, health, and FLP payment of estate tax liabilities to determine the applicability of section 2036 and its bona fide sales exception.