Wills, Trusts & Estates Prof Blog

Wyoming Attorney General Prevents the Wrongful Termination of a Perpetual Conservation Easement

After over six years of litigation, a case involving a Wyoming county’s attempted termination of a perpetual conservation easement has settled, with the conservation easement remaining in full force and effect on the burdened land.

Background. In 1993, Paul and Linda Lowham donated a conservation easement as a tax-deductible charitable gift to the Board of County Commissioners of Johnson County, Wyoming, for the purpose of preserving and protecting in perpetuity the conservation values of a 1,043-acre ranch located in the county. In 1999, the Lowhams sold the land, subject to the perpetual easement, to the Dowds. When an energy company later prepared to drill for coalbed methane on the land, the Dowds requested that the Board terminate the conservation easement. The Board passed a resolution in which it agreed to do so, and then executed a quitclaim deed transferring the conservation easement to the Dowds for purposes of terminating the easement.

In 2002, a resident of the county, Hicks, filed suit alleging, inter alia, that the Board breached its fiduciary duties to both the easement donor and the public by agreeing to terminate the conservation easement without court approval obtained in a cy pres proceeding. Hicks also argued that the minimal drilling that had occurred on the property had not rendered continued protection of land’s conservation values impossible or impractical.

In 2007, the Wyoming Supreme Court dismissed Hicks’s case on the ground that Hicks, a mere resident of the county, did not have standing to sue. See Hicks v. Dowd, 157 P.3d 914 (Wyo. 2007). For an NPR story on the case up to this point, click here.

In the summer of 2008, the Wyoming Attorney General filed suit against the Board and the Dowds. The Wyoming Attorney General argued that the Board had violated its fiduciary duties by agreeing to terminate the conservation easement without court approval obtained in a cy pres proceeding. The Attorney General requested that the Board’s attempted termination of the conservation easement be declared null and void. The Attorney General and some conservation organizations were also concerned that the Board’s actions, if upheld, could render conservation easements in Wyoming nondeductible. Federal tax law requires that the conservation purpose of a tax-deductible conservation easement be “protected in perpetuity.” I.R.C. § 170(h)(5)(A). For their part, the Dowds argued that “[t]here is nothing special about a conservation easement when it comes to termination,” and that conservation easements can be modified or terminated by simple agreement of the then owner of the land and the government or nonprofit holder of the easement.

Settlement. While the Motions for Summary Judgment in the case were pending, the parties to the case agreed to settle. On February 10th, 2010, the District Court Judge signed a Stipulated Judgment approving the settlement, which declares that:

(i) the resolution passed by the Board was of no legal effect insofar as it purported to authorize the Board to transfer the conservation easement to the Dowds;

(ii) the Board’s quitclaim deed purporting to transfer the conservation easement to the Dowds was null and void and of no effect; and

(iii) the original deed of conservation easement remains in full force and effect with minor amendments as set forth in the Judgment. See the stipulated Judgment entered on Feb. 17, 2010, by the Fourth District Court, Johnson County, Wyoming, in Salzburg v. Dowd.

Implications. The settlement represents a victory for the Wyoming Attorney General as well as the public, which is investing heavily in what it assumes are perpetual conservation easements. It also represents a victory for conservation easement donors, who are willing to significantly reduce the value of their land in large part because of a strong personal connection to—and the promise of permanent protection of—that land.

For a recent article discussing the case and including relevant portions of the Wyoming Attorney General’s Motion for Summary Judgment as an Appendix, see Nancy A. McLaughlin & W. William Weeks, Hicks v. Dowd, Conservation Easements, and the Charitable Trust Doctrine: Setting the Record Straight, 10 Wyo. L. Rev. 73 (2010).

Special thanks to Nancy McLaughlin (professor of law, University of Utah) for providing a summary of this case.

Family and Cryonics Foundation Fight For Deceased Woman's Head

The family of a deceased Colorado woman and a cryonics foundation are fighting over a deceased woman's head and a $50,000 annuity. 

• The woman signed documents that gave the Alcor Life Extension Foundation the right to preserve her head cryogenically and the annuity to cover preservation costs.  
• The family claims the woman changed her mind about preservation because of the invasive procedures that it required before she was dead.  
• The woman's body is being stored in dry ice until the dispute is resolved. 

See AP, Colorado Family, Nonprofit Group Battle Over Woman's Head, Feb. 22, 2010. 

Special thanks to Matthew Harris (J.D. candidate 2011, Texas Tech University) for bringing this to my attention.

Texas Case Law on the Disposition of Community Property Life Insurance Proceeds

Christopher Hildreth (J.D. candidate 2010, Baylor University) has published his comment entitled Street v. Skipper & Martin v. Moran: Resolving a Split in Authority in Texas Regarding the Disposition of Proceeds from a Community-Property Life Insurance Policy Payable to the Insured Spouse's Estate, 61 Baylor L. Rev. 973 (2009). 

An excerpt from the article is below:

Martin v. Moran and Street v. Skipper are both Texas Court of Appeals cases addressing the disposition of proceeds from a community-property life insurance policy naming the insured's estate when a beneficiary other than the surviving spouse is named in the decedent's will. The two cases reach different conclusions as to the rights of the surviving spouse to the proceeds. Martin v. Moran holds that proceeds from a community-property life insurance policy payable to the estate of a spouse should, as a matter of law, be subject to a partition between the devisees named in the will and the surviving spouse. Street v. Skipper holds that when proceeds of a community-property life insurance policy are payable to the insured spouse's estate and the will names a devisee other than the surviving spouse, the surviving spouse may only recover a portion of the proceeds if the transfer results in a fraud on the community. The conflict turns on a power versus right distinction, as well as whether the issue of the surviving spouse's right to a portion of the proceeds should be settled as a matter of law or as a question of fact.

UK Poll Reveals That Only Eight Percent of Citizens Have Living Will

A recent poll of United Kingdom citizens found that 8% of those polled have a living will, 17% would very likely make a living will if it were easy, and 30% would quite likely make a living will if it were easy. 

Also of note in the UK, the Director of Public Prosecutions is supposed to publish on Thursday his policy on prosecuting those who assist a suicide, which will replace the interim guidelines currently in place.

See Andrew Alderson, Half the population would make a 'living will' if it was easy, says new poll, Telegraph UK, Feb. 21, 2010; see also my prior posts on the interim guidelines for prosecuting a United Kingdom citizen for assisting a suicide. 

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

Chicago's Grave Relocation for New O'Hare Runway Halted

The St. Johannes Cemetery is the historic cemetery that borders Chicago's O'Hare International Airport.  An Illinois judge recently approved the transfer of cemetery land to the city of Chicago for construction of a new runway, and the city began relocating graves.  Last week, however, a state appellate court issued a restraining order that prevents the city from relocating any more graves so that family members of those buried in the cemetery can appeal the land transfer, which they claim violates the religious rights of the deceased.

See Matt Bartosik, City Barred from Removing Graves Near O'Hare, NBC Chicago, Feb. 19, 2010. 

Author and Illustrator Tasha Tudor Leaves Behind Fighting Children

Tasha Tudor, famed author and illustrator of children's books, passed away in 2008.  In contrast to Tasha Tudor's simple lifestyle, her four children are now fighting over the $2 million estate she left behind:

• Tasha left the bulk of her estate to her son Seth and his son.
• Because of their estrangement from her, Tasha left $1,000 to each of her daughters and an antique object to her other son Thomas.
• Thomas now claims that Seth exerted undue influence over Tasha and as a result, Tasha rewrote her will to substantially cut out her other three children.  Thomas has accused Seth of hatching this disinhertiance plot over ten years ago.
• Additionally, the siblings are fighting over minor matters, such as expenses for snow-plowing the road to Tasha's former residence.
• Although Tasha asked that she be buried with her predecased dogs, her ashes were divided and buried in two different places as a result of fighting between her children on the issue.  One sibling described the ceremony as being a really unpleasant situation. 

See John Curran, Author Tasha Tudor's Children Battle Over Estate, AP, Feb. 2010.

Special thanks to Jim Hillhouse (Wealth Counsel) for bringing this to my attention.

Juror in Astor Trial Claims that She Voted to Convict Out of Fear for Her Safety

Defense attorneys are seeking to overturn the convictions of Anthony D. Marshall and Francis X. Morrissey, Jr., after a juror from the trial has announced that she voted to convict out of fear for her safety:  

• The juror, Judith DeMarco, alleges that on one occasion another juror threatened her with gang signs, menacing movements, and assertions that she once dated a member of the gang the Latin Kings.  
• Defense attorneys argue that their clients were deprived of a fair trial because the judge in the case failed to address the issue after being notified that one of the jurors felt threatened.
• Additionally, emails from the jurors evidence that they orchestrated how to portray their deliberations.
• DeMarco may suffer from credibility issues, however, because she made prior statements evidencing a belief that the evidence supported the convictions, she did not sign the affidavits obtained by defense attorneys out of fear of scrutiny, and another juror has characterized her as a drama queen.

See John Eligon, An Astor Juror Says Her Fear Dictated Vote, NY Times, Feb. 21, 2010; see also my prior posts regarding Brooke Astor's estate and the trial of Marshall and Morrissey.

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

Criticisms of Missouri's Laws Regarding Posthumous Children

Kimberly E. Naguit has published her note entitled The Inadequacies of Missouri Intestacy Law: Addressing the Rights of Posthumously Conceived Children, 74 Mo. L. Rev. 889 (2009). An excerpt from the introduction of the article is below:

Recently, courts have started to address the inheritance rights of posthumously conceived children. The current statutory and common-law framework in Missouri, as in many other states, “revolves around the idea that parent-child relationships are created by a man and a woman having sexual intercourse and a child being born as a result.” With the rapid advances in reproductive technology, however, this concept of parentage is clearly outdated and in need of improvement. Missouri law does not adequately address the issues of intestate succession and inheritance for children born through posthumous conception. To resolve this gap in state law, the Missouri legislature should adopt the 2008 amendments to the Uniform Probate Code (UPC). This note examines the provisions of the 2008 amendments, legislation and case law in other states, and the possible ways a Missouri court could decide a case based on its current statutory framework. In the end, adopting these provisions in Missouri would do much to clarify the rights of inheritance for the posthumously conceived.

CLE for Attorneys Who Have Private Foundation Clients

The ABA Section of Real Property, Trust & Estate Law is sponsoring teleconference and life audio webcast CLE entitled Low-Profit, Limited Liability Companies: Facilitating Program Related Investments by Your Private Foundation Clients on March 2, 2010.

A summary of the program is below:

A low-profit, limited liability company (L3C) is a for profit venture that pursuant to its state organizational documents must have a primary goal of performing a socially beneficial purpose, not maximizing income. State legislation authorizing L3Cs has been specifically written to comply with the federal IRS regulations relevant to Program Related Investments (PRIs) by private foundations. The L3C facilitates tranched investing with the PRI taking first the risk position thereby making the investment in the lower tranches more attractive to commercial investors. Because the private foundations take the highest risk at little or no return, it essentially turns the venture capital model on its head and gives many social enterprises enough low cost capital to be self sustainable. Additionally, by providing the possibility of a small return on investment it has the potential to increase the charitable dollars available for distribution by private foundation.

During this program our panel will discuss:

• Structuring an L3C
• Maintaining compliance with the PRI rules
• Proposed and pending state and federal legislation effecting L3Cs and PRIs

Should I or Should I Not Throw Momma From the Bus This Year?

Last week the New York Times featured yet another article on the uncertainty surrounding the estate tax.  The following is somewhat humorous commentary regarding changes to capital gains treatment this could be disadvantageous for smaller estates:

Estate planners say the tax hiatus has inspired jokes among their peers along the lines of “Throw Momma from the train in 2010.”

Yet if Momma has a fortune of less than seven figures, her loved ones probably would be better off keeping her on board.

Conrad De Aenlle, That Fog Still Hasn’t Lifted From the Estate Tax, NY Times, Feb. 13, 2010.

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