Wills, Trusts & Estates Prof Blog

Happy New Year!

As you are probably aware, this blog attempts to serve as a central site to locate and explore comprehensive materials to enhance your teaching of courses that address intestate succession, wills, trusts, estate administration, non-probate assets, planning for disability, and other matters pertaining to estate planning.  A wide range of materials are presented including reference, practical, academic, scholarly, pedestrian, historical, current, etc.

I encourage you to make suggestions and recommendations for materials to be included on this blog.  Unless otherwise requested, I will acknowledge your contribution in my blog entry.

Also, have you recently:

• published a book or article?
• made an interesting presentation?
• received a noteworthy appointment?
• accepted a position at a different school (permanent or visiting)?

If yes, please consider submitting a summary of the book, article, activity, etc. and I will be post it to this blog.  I am sure your colleagues would be interested -- I know I am!!

Best wishes for 2011,

Gerry

P.S.  For my non-law professor readers, I also encourage you to submit items which you think may be of interest to blog readers.  Your support, input, and readership are greatly apppreciated!!

Visual Presentation of Gift Tax Changes

On December 17, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 into law. This bill makes significant changes to the gift tax from 2010 to 2011 and 2012. The gift tax rate will remain at 35% for 2011 and 2012, but the exemption is increased from $1 million to $5 million, the exemption will be reunified with the estate tax exemption, the exemption will be portable between spouses, and the exemption will be indexed for inflation.

Hani Sarji, author of Estate of Confusion, created a chart to summarize these changes: 
Hani Sarji, Gift Tax Under The 2010 Tax Relief Act (P.L. 111-312): Different Rules For 2010, 2011 & 2012, Estate of Confusion, Dec. 29, 2010.  See also Hani Sarji, Gift Tax: Changes Made by the 2010 Tax Relief Act, Estate of Confusion, Dec. 2010 for a concise visual presentation of the changes.

Sisters' Release from Prison Conditioned on Organ Donation

In 1994, Jamie and Gladys Scott led two men into an ambush. Three teenagers hit each man in the head and took their wallets, making off with $11. The sisters were convicted and sentenced to life in prison. After 16 years in prison, Jamie is on daily dialysis, which costs the state approximately $200,000 a year.

Recently, Gov. Haley Barbour decided to suspend their life sentences on the condition that Gladys donates her kidney to Jamie within one year.

Some applaud the governor, calling it a “shining example” of the governor’s power being put to good use. Others argue that the organ donation shouldn’t be a condition of release because trading something of value (in this case, freedom from prison) for an organ is illegal.

See Sister’s Kidney Donation Condition of Parole, Associated Press, Dec. 30, 2010.

Language Directing Beneficiaries to Continue Financial Support of Another Person is Precatory

The testator’s will devised her residuary estate to her three children. The next article of the will stated the testator’s desire that a named granddaughter of the testator “be taken care of as [the testator] did during [her] lifetime."

In Williams v. Williams, 43 So. 3d 517 (Miss. Ct. App. 2010), the court held that the language directing care of the granddaughter was precatory. Having devised her entire estate, the testator’s desire for continued care of her granddaughter was precatory and thus unenforceable.

Special thanks to William P. LaPiana (Rita and Joseph Solomon Professor of Wills, Trusts,and Estates, New York Law School) for bringing this to my attention.

Trustee's Duty to Diversify

Trent S. Kiziah (Los Angeles, CA) recently published his article entitled The Trustee's Duty to Diversify:  An Examination of the Developing Case Law, 36 ACTEC L.J. 357 (Fall 2010).  The introduction is below: 

Under the Uniform Prudent Investor Act (1994) (hereinafter “UPIA”), a trustee has a duty to diversify the investments of the trust unless special circumstances justify retention of the concentration or the operative document waives the duty to diversify.  This article explores what circumstances justify retention of a concentration and what language waives the duty to diversify.

Voltaire's Will Contest Quote

"Animals have these advantages over man: they never hear the clock strike, they die without any idea of death, they have no theologians to instruct them, their last moments are not disturbed by unwelcome and unpleasant ceremonies, their funerals cost them nothing, and no one starts lawsuits over their wills."

--Voltaire, French author (1694 - 1778).

Special thanks to Carlo Taboada (2012 J.D. candidate, Texas Tech School of Law) for bringing this to my attention. 

 

CLE on Disclaimers

The National Business Institute is sponsoring a 90-minute national teleconference entitled Use of Disclaimers in Probate on January 5. The program description is below:

Explore all the details and possible outcomes of disclaiming interest in property and get tips for making certain the decedent's property is transferred to the right beneficiaries. Learn when and how to use qualified disclaimers to take full advantage of this simple technique. Register today!

• Review the rules governing disclaimers to ensure your clients' compliance.
• Trace the steps involved in transfer of disclaimed property to anticipate the effects of qualified disclaimers.
• Find out when disclaimers become a valuable estate planning tool and how to execute one correctly.

Agent May Withdraw Funds from Trust Bank Account

A durable power of attorney authorized the agent to act in the principal’s stead and to do anything the principal could do. The agent then closed the principal’s trust bank account and opened a new account with a different beneficiary. The principal’s guardian and personal representative sued the bank for allowing the withdrawal.

The trial court dismissed the complaint and the Florida intermediate appellate court affirmed. The power of attorney authorized the withdrawal and although state law prohibits an agent from altering any disposition effective at the principal’s death, the prohibition does not apply to withdrawing money from a trust account because the beneficiary cannot object to any changes made by the owner of the account.

Beane v. Suntrust Banks, Inc., No. 4D09-3033, 2010 WL 4483472 (Fla. Dist. Ct. App. Nov. 10, 2010).

Special thanks to William P. LaPiana (Rita and Joseph Solomon Professor of Wills, Trusts,and Estates, New York Law School) for bringing this to my attention.

Today is the Last Day to Vote!!

Each year, the editors of the ABA Journal choose the 100 best legal blogs. Thanks to your loyalty and support, this blog has been selected. Voting is now taking place to determine the "popular" favorite in each of 12 categories -- my blog is in the Law Prof Plus category. I would greatly appreciate your taking the time to cast a vote for this blog by following this link -- vote here. Thank you!!!

Fiduciary Accounting Statutes

Julia C. Zajac (J.D. candidate, University of Connecticut School of Law) and Robert Whitman (Professor of Law, University of Connecticut School of Law) recently published their article entitled Fiduciary Accounting Statutes for the 21st Century, 36 ACTEC L.J. 443 (Fall 2010).  The introduction is below:

Fiduciary duty, in the Anglo-American legal tradition, requires a fiduciary to exhibit a heightened degree of loyalty and honesty, subordinating its own interests to see to the best interest of the beneficiary group. Cornerstones of fiduciary duty are to keep a beneficiary well informed and keep intact a clear line of communication. These canons of fiduciary duty are inextricably connected to fiduciary accounting, which in turn, is governed by state statute.

Fiduciary accounting statutes must, ideally, be flexible so that creating the fiduciary account does not over-burden the fiduciary on the one hand but keeps the beneficiary group reasonably informed on the other hand. As compared to the technology available when old-style fiduciary accounting statutes were legislated, the advent of the computer now permits the achievement of a better balance of interests between the fiduciary and beneficiaries.

A fiduciary accounting can take many forms, but generally it involves a process by which a fiduciary presents to a beneficiary a record of financial transactions that have occurred during the period being accounted for. Depending on the state statutes that deal with fiduciary accounting and local customs, fiduciary accounting practices can vary widely from state to state and in some cases from one court to another in the same state. For example, it is not uncommon in the Midwestern part of the United States to have annual reports comprise the fiduciary accounting with no other reporting required. On the East Coast, charge and discharge accounting is more often found. State statutory provisions often determine the makeup and complexity of the fiduciary accounting done.

Where charge and discharge accounting is carried out, an accounting will begin with the fiduciary preparing and presenting an inventory of all initial assets. In preparation for this type of accounting, a recording system must be established by the person who will account in order to record the credit/debit cycle of the fund. Finally, depending on the state statutes, a final accounting is presented to the beneficiary group or any other interested party “as part of a process by which the fiduciary seeks discharge of responsibility for the property entrusted and release from liability for the events disclosed.”

This article examines the current status of fiduciary accounting statutes and argues that there is a need for more up-to-date legislation. Part II examines the history of fiduciary accounting statutes leading up to the Report of the National Fiduciary Accounting Study which set forth uniform principles related to fiduciary accounting. Part III focuses on how the Uniform Trust Code (“UTC”) and Restatement of Trusts 3rd (“Restatement 3rd”) treat the trustee's duty to inform and report. Four recently adopted statutes are then analyzed based on how they were amended to change the UTC's and Restatement of 3rd provisions. Part IV reviews suggested goals of the new generation of fiduciary accounting statutes and based on those goals, a model statute is put forward.