Wills, Trusts & Estates Prof Blog

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

Monday, November 30, 2009

The Risks and Rewards of Stranger-Owned Life Insurance

Insurance The Nov. 2009 issue of the Illinois Bar Journal contains the following two articles addressing collectively entitled Stranger-Owned Life Insurance: The Risks and Rewards.   

Stephen M. Margolin (shareholder, Chuhak & Tecson, PC) & Valerie J. Freireich (partner, Chuhak & Tecson, PC), The Rewards: A Fictional Case Study, 97 Ill. Bar J. 568 (2009).

James C. Shanley (of counsel, Ungaretti & Harris LLP), The Risks and How to Minimize Them, 97 Ill Bar J. 569 (2009).

The introduction to the both of these articles is below:

Perhaps you've read about it or seen it on TV, or perhaps a client has approached you about it.  The plan works this was: an elderly person lets investors buy insurance on his life in return for a hefty cash payment.  At the end of two years, he can reimburse the investors the premiums they paid-plus interest-and keep the coverage, or he can drop it with no obligations.  And he keeps the cash up-front either way.  

It's called stranger-owned life insurance ("SOLI"), and it's a controversial but increasingly popular financial device.  Do the risks outweigh the rewards?  James C. Shanley is skeptical, Stephen M. Margolin and Valerie J. Freireich more sanguine.  Here are two sides of the SOLI story. 

November 30, 2009 in Articles, Death Event Planning, Estate Planning - Generally | Permalink | Comments (1) | TrackBack (0)

NYC AV Rated Trusts & Estates Boutique Firm Seeks Associate or Counsel

NYC A NYC AV rated trusts & estates boutique firm is seeking a mid-level Associate to Counsel level attorney.

Immediate Hire.

3-15+ years Trusts, Estates, and Probate experience required.

Part Time or Full Time.  Flexible schedule.  Sophisticated Practice in collegial environment.

Please submit resume to Norma Singh at nsingh@mtrustlaw.com.  

November 30, 2009 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Casket Falls and Cracks Open During Burial

CoffinIn May 2008, the burial of Robert Gowdy, Sr., allegedly when horribly wrong. The family is suing the the City of Mesa, Arizona, cemetery workers, a funeral home, and a casket company after Gowdy's casket allegedly dropped and cracked open while being lowered into his grave.  It is alleged that cemetery workers ran from the scene of the accident.

See AP, Family jumped into grave after casket crumbled, suit says, Boston Herald, Nov. 28, 2009.

November 30, 2009 in Estate Administration | Permalink | Comments (0) | TrackBack (0)

Sunday, November 29, 2009

Illinois: Changes Promote Private Trust-Admin. Settlement Agreements

Agreement Lyman W. Welch (partner, Sidley Austin LLP) & Susan T. Bart (partner, Sidley Austin LLP) have published their article entitled New Law Promotes Private Trust-Administration Agreements, 97 Ill. Bar J. 562 (2009).  

The following is an excerpt taken from the beginning of the article:

Effective January 1, 2010, the Illinois Trusts and Trustees Act has been revised to significantly expand the use of nonjudicial settlement agreements in resolving disputes, ambiguities, and operational difficulties in trust administration.  The revision removes limitations of the original section 16.1 of the Act, which applied only if all "primary beneficiaries" were adults and not disabled.  Further, it greatly expands what can be properly addressed by nonjudicial settlement agreements.

November 29, 2009 in Articles, New Legislation, Trusts | Permalink | Comments (0) | TrackBack (0)

Response to Treating Earned & Inherited Wealth Differently for Federal Estate Tax Purposes

Estat taxI recently reported on a New York Times op-ed piece by Ray D. Madoff entitled Protect the Farm, Tax the Manor, which argues for a much larger federal estate tax exemption for estates consisting primarily of family farms and businesses than estates consisting of inherited wealth.

On Saturday, Nov. 28, the Times published four letters to the editor in response to Madoff's op-ed piece.  The following summaries of these letters is taken from Hani Sarji, Readers respond to Ray D. Madoff's recent New York Times op-ed proposal, Future of the Federal Estate Tax, Nov. 20, 2009:

The first letter, by Robert Miller, highlights what he views as socialist overtones in Madoff's proposal. Miller thinks that Madoff's plan "echoes" Karl Marx. He also thinks that Madoff's plan discriminates against the estates of wage earners. He concludes by writing, "I earned that money and paid my taxes on it. It is mine and I want to give it to my hard-working kids, not to the government."

The second letter is by Melissa P. Walker, a trusts and estates lawyer in Atlanta. Walker would keep the exemption amount and rate as they currently are, and she would not give farmers and small business owners the special treatment that Madoff proposes. Walker believes that such provisions are already in the tax Code. She also believes that Madoff discriminates against "estates built through savings and investments."

The third, and longest, letter is by Steven Baker, a CPA in Florida. Baker strongly feels that farmers and small businesses already get special treatment. He writes, "After practicing estate planning for more than a decade, I can attest that I have yet to see a family farm or small business go under because of the estate tax."

The fourth letter is written by Michael Hepner, a benefits professional, and [Hani Sarji]. [They] argue that Madoff creates a "a false dichotomy between good and bad wealth."

See also N.Y. Times, My Estate Tax, Your Family Business, Nov. 28, 2009,

November 29, 2009 in Estate Tax | Permalink | Comments (0) | TrackBack (0)

Tips for Avoiding Estate Litigation

AgreementUS News reports that poor economic conditions have led to more estate litigation. While wealth transfers have increased over the past 20 years, currently reduced asset values make for a smaller pie and returns that are smaller than excepted.  Longevity and increased family complexity (2nd and 3rd marriages, for example) only add to disputes. 

US News suggests the following key tips for avoiding estate litigation.

  1. Select a good, solid attorney who hasn't done any work for any of your beneficiaries.
  2. Select an executor who can get along with your family, perhaps even a professional fiduciary if no one else could successfully fill this role.
  3. Discuss your intentions with family before the will is drafted, taking away the surprise after death and making loved ones aware of personal wishes and desires.
  4. Take state law into account, creating trusts to bypass probate if probate is especially burdensome under applicable state law.
  5. Update the will or trust often so that challenges become more difficult.
  6. Title assets appropriately so that the assets pass through or outside probate as intended.
  7. Consider a no-contest clause coupled with testamentary gifts adequate to discourage disputes.  
  8. Allow the estate some leeway with distribution of assets so that beneficiaries can agree to a distribution that suits them best.  

See Phillip Moeller, 8 Tips to Avoid Nasty Estate Surprises, U.S. News, Nov. 27, 2009. 

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

November 29, 2009 in Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (1) | TrackBack (0)

Saturday, November 28, 2009

More on In re Estate of Feinberg

No_gentileHelen W. Gunnarsson (attorney, Highland Park, Illinois) has published an article entitled Illinois Supreme Court upholds Jewish-marriage clause in trust provision, 97 Ill. Bar J. 549 (2009).  The article discusses In re Estate of Feinberg, which is also discussed here and here

The introduction to the article is below:

A clause from a testamentary trust providing that its assets are to be distributed to the testator's grandchildren, except for any grandchild who might marry a non-Jew or whose non-Jewish spouse did not convert within one year of marriage, does not violate public policy when employed as a condition precedent of a gift of the trust's assets, a unanimous Illinois Supreme Court has held. The case is In re Estate of Feinberg, 2009 WL 3063395 (Ill Sup Ct).

November 28, 2009 in Articles, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Top SSRN Downloads

Ssrn_2 Here are the top downloads from September 29, 2009 to November 28, 2009 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.

Rank Downloads Paper Title
1 290 2009 Federal Tax Update
Samuel A. Donaldson,
University of Washington - School of Law,
Date posted to database: October 13, 2009
Last Revised: October 13, 2009
2 161 Miller: Effective FLP Line Drawing
Wendy C. Gerzog,
University of Baltimore - School of Law,
Date posted to database: October 12, 2009
Last Revised: October 12, 2009
3 148 Conflicts of Interest and Nonprofit Governance: The Challenge of Groupthink
Melanie B. Leslie,
Cardozo Law School,
Date posted to database: September 25, 2009
Last Revised: October 20, 2009
4 122 Section 6694 Preparer Penalties and Tax Advice: The Latest on the Constantly Moving Target
Scott A. Schumacher,
University of Washington,
Date posted to database: September 11, 2009
Last Revised: September 11, 2009
5 102 Navigating the Deaccessioning Crisis
Derek Fincham,
Loyola University New Orleans College of Law,
Date posted to database: September 8, 2009
Last Revised: November 18, 2009
6 92 Did a Unanimous Supreme Court Misread ERISA, Misread the Court's Precedents, Undermine Basic ERISA Principles, and Encourage Benefits Litigation?
Albert Feuer,
Law Offices of Albert Feuer,
Date posted to database: October 12, 2009
Last Revised: October 12, 2009
7 74 Rethinking Trust Law Reform: How Prudent is Modern Prudent Investor Doctrine?
Stewart E. Sterk,
Yeshiva University - Cardozo Law School,
Date posted to database: September 22, 2009
Last Revised: September 27, 2009
8 69 Preventive Adjudication
Samuel Bray,
Columbia Law School,
Date posted to database: October 8, 2009
Last Revised: October 15, 2009
9 50 Tax Court Fumbles Substance-Over-Form Ball in Estate of Brown
Paul L. Caron,
University of Cincinnati - College of Law,
Date posted to database: November 4, 2009
Last Revised: November 7, 2009
10 49 A Well-Reasoned But Incorrect QDRO Decision Pertaining to Life Insurance Payments from an ERISA Plan
Albert Feuer,
Law Offices of Albert Feuer,
Date posted to database: September 7, 2009
Last Revised: October 26, 2009

November 28, 2009 in Articles | Permalink | Comments (0) | TrackBack (0)

Searching for a Missing Will

WillThe following "article" recently appeared in the Law Society Gazette and is actually a classified ad in search of a missing will:

Calling all probate solicitors. Do you recall acting for a ‘somewhat eccentric and secretive’ millionairess called Judy Maude Keele, some time in the past century? To refresh your memory, she owned a flat in Mayfair, drove a classic sports car, and reputedly built up a large collection of fine art and jewellery. She married a prominent Chicago lawyer, but on getting divorced returned to London in 1958. Keele died in New York in 1998, and while she is understood to have made a will in the UK, her solicitor is unknown and the document cannot be found. Lichfield lawyers Keelys are now on the case, and have even called in famous art detective Charles Hill, who apparently took part in an undercover operation to recover Edvard Munch’s famous picture The Scream – a portrait of a solicitor looking at his professional indemnity bill this October – when it was stolen from the Norwegian National Gallery in 2004. Anyone with knowledge of Keele’s will or possessions is asked to contact Keelys litigation partner Michael Phillips at mphillips@keelys.co.uk.

Heir Hunting, Law Society Gazette, Nov. 26, 2009.

Special thanks to David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.

November 28, 2009 in Estate Administration, Wills | Permalink | Comments (0) | TrackBack (0)

Friday, November 27, 2009

Common SOL Problems For Estate Planners

Background Jerry Frank Jones (attorney, Austin) & Laurie Ratliff (attorney, Austin) have published their article entitled Statute of Limitations Issues in the Probate, Guardianship & Trust Context, The Advocate, Fall 2009, at 81.  

The following is an excerpt from the introduction of the article:

The focus of this paper is to highlight common statute of limitations issues in probate, guardianships and trusts.  Some time limits (such as filing a bond) are discussed, even though they are not technically statues of limitations.  They are mentioned because they may be important in monitoring the actions of a fiduciary to avoid his being (or to cause him to be) driven from his office. 

November 27, 2009 in Articles, Guardianship, Trusts | Permalink | Comments (0) | TrackBack (0)