Wills, Trusts & Estates Prof Blog

Supreme Court to Decide on Posthumous Conception

Robert and Karen Capato found out shortly after their marriage that Robert had esophageal cancer. Chemotherapy had potential to render him sterile, so Robert deposited some of his sperm into a sperm bank in case he did become sterile. In 2001, Robert and Karen were able to naturally conceive a son. One year later, in 2002, Robert passed away. Karen used in vitro fertilization after Robert’s death with the sperm he had frozen at the sperm bank and she conceived a child in January 2003, and then twins in September 2003, nine months and eighteen months respectively after Robert’s death.  In October 2003, Karen applied for surviving child’s insurance for the twins based on Robert’s earning capacity, but the Social Security Administration denied the application. Karen appealed that denial.

Under Social Security Act (SSA) Section 402(d), if the twins are found to be Robert’s children and if they were dependent on him at the time of his death, they qualify for surviving child’s insurance. Under section 416(h) of the SSA, state intestacy law figures into determining whether an applicant is a child of the deceased. Robert was a resident of Florida at the time of his death, so Florida intestacy law would be applied. Under Florida's intestacy law, a child has to be conceived before the parent's death to be treated as an heir in the intestate succession scheme.   

The U.S. Court of Appeals for the Third Circuit determined that the twins are Mr. Capato’s children, but they did not find that the children met the requirement that they were dependent on Robert at the time of his death. The case is now before the U.S. Supreme Court to decide whether the twins can receive the surviving child’s insurance.

The Uniform Parentage Act Section 707 indicates that a decedent is not a parent of a resulting child when their genetic material is used in conception after their death unless the parent expressly consented to be the parent of the child. While this approach may go against logic and morals in some situations, it is in place to avoid administrative problems that posthumous children can potentially create long after the decedent’s death. Anyone is free to provide for a posthumous child in a will, but otherwise, intestate rules are the default, and posthumous children can create unworkable issues in intestate administration.

See John T. Brooks, Posthumous Conception: Capato v. Astrue Puts This Issue on the U.S. Supreme Court’s Calendar, Trusts & Estates, Feb. 29, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

New Tool Helps to Find Benefit Programs for Seniors

Seniors can now search for health care, food, and utility benefits that they are eligible for with the new Benefits CheckUp tool from the National Council on Aging. Seniors can put information in about their financial situation and location, and the program will notify them of benefits they may be eligible for.

Seniors can also call or visit a local benefits-enrollment center. To find one near you, go to the National Council on Aging and search for “BECs”. There is also a hotline you can call at 800-677-1116. Be sure to have information when you call, including estimates of your income and estimates of how much you spend on mortgage, rent, medical bills, and other expenses. There is an income limit for many of the programs, but some are available to seniors who do not qualify for federal poverty programs.

See Rachel Louise Ensign, Find Benefits for Seniors, The Wall Street Journal, Feb. 26, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Inappropriate Obituary

Josie Anello passed away mid-February and her obituary was the subject of discussion after her passing due to how one son described his siblings. A portion of the obituary reads: "She is survived by her Son, 'A.J.', who loved and cared for her; Daughter 'Ninfa', who betrayed her trust, and Son 'Peter', who broker her heart." 

A.J. submitted this obituary in his mother's memory, and some feel that it could have done without mention of family conflicts. Additionally, A.J. should not put words into his deceased mother's mouth about his siblings when she is no longer available to confirm or deny those sentiments. Chances are that his mother would want the siblings to reconcile and be on friendly terms with one another. 

See Obituary Ethics: The Anello Family Follies, Ethics Alarms, Feb. 25, 2012. 

Special thanks to Helen W. Gunnarsson (Associate Counsel, ABA/BNA Lawyers' Manual on Professional Conduct, Center for Professional Responsibility) for bringing this article to my attention.

Obituary Sheds Light on Family Feud in Florida

Obituaries typically give surviving family and friends the opportunity to honor the deceased in a public forum. However, one man in Florida placed an obituary for his mother with the intention of insulting his siblings and revealing a long standing family feud.  

“A.J.” Anello included the following line in his mother’s obituary:  "She is survived by her Son, 'A.J.', who loved and cared for her; Daughter 'Ninfa', who betrayed her trust, and Son 'Peter', who broke her heart." A.J. told the Tampa Bay Times that he was following his mother’s wishes by including the insults in the obituary. A.J. claimed that Ninfa and her husband took Josie’s social security checks to go on vacations.

Ninfa Simpson later told the Tampa Bay Times that A.J. became controlling over their mother after their father died and that Peter had been estranged from the family for twenty-five years. Ninfa also claimed that A.J. took his mother’s savings and maxed out her credit cards.

For more on this story, see Josie Anello: Obituary Reveals Florida Family’s Feud, The Huffington Post, Feb. 23, 2012. 

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

New Jersey Man Cons Nun

According to a federal indictment, Adriano Sotomayor of New Jersey defrauded 24 victims, including members of the Dominican Sisters of the Rosary of Fatima, between May 2009 and June 2011. Sotomayor allegedly convinced an elderly nun that he was a Catholic Priest from New Jersey and the executor of a parishioner's will.

Sotomayor informed the nun that she had been named as the beneficiary of the parishioner’s $2.1 million estate. Sotomayor then instructed the nun to send him money to cover taxes, processing frees, and legal fees to probate the parishioner’s will. The nun ended up sending the requested funds Sotomayor in Atlantic City, NJ. For two years Sotomayor continued his scam, conning away $439,153 from additional victims who sent money on the nun’s behalf.

If convicted of the 13 counts of wire fraud and one count of aiding and abetting that are charged against him, Sontomayor faces a maximum possible sentence of 260 years in jail, a $3.25 million fine, three years of supervised release, and a $1,300 special assessment.

See Bill Singer, FBI Nabs Bogus Priest Who Ripped Off Elderly Nun In Fake Will Scam, Forbs, Feb. 28, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Current Trends in the Art World

The big ticket items in the art world right now are modern, contemporary, and impressionist artwork. For example, Edward Munch’s painting, “The Scream,” which will be sold by Sotheby’s in May, has a projected $80 million minimum price tag. Petter Oslen, a Norwegian businessman plans to sell the painting and use the proceeds to fund a museum and art center on his farm.

Other high ticket items have been Pablo Picasso’s 1932 painting, “Nude, Green Leaves and Bust,” and Paul Cezanne’s painting, “The Card Players,” which sold for $106.5 million and $250 million, respectively. The amount paid for Cezanne’s painting is reportedly the highest price ever paid for work of art. Many art collectors are also purchasing works by younger artists with the expectation that the demand for and value of these creations will increase.   

According to are dealers, traditional and classical paintings along with antique furniture are currently not popular investments for collectors. However, many collectors are purchasing coins and jewelry because of the inherent value of these pieces and their appeal to the art community.

See Investors Make Art Auctions A ‘Screaming’ Success, Private Wealth, Feb. 24, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Six Reasons to Continue Using Trusts

In the past, most people who settled revocable living trusts did so to reduce exposure to estate taxes. Some may think that the current $5 million exclusionary amount and portability option make trusts obsolete; however, many reasons still exist to continue using this trusted estate planning tool. Six reasons to continue using trusts are below:

1. Trusts can help beneficiaries receive assets without the need of going through the arduous probate process. 
2. Typically, trusts cost around $3,000 to establish. This amount can be much less than the cost of probate as attorney’s fees and court costs to probate an estate range between 4% to 10% of the estate assets (a $500,000 estate could cost $25,000 to probate at 5%).
3. Trusts provide privacy to both inheritors and settlors, whereas the probate process is very public.
4. Trusts also protect a beneficiary’s inheritance from potential creditors and give the settlor the opportunity to create rules as to when and if a beneficiary will inherit his or her assets.
5. Portability requires that the proper tax returns be filed on the deceased spouse’s behalf. Some surviving spouses and their counsel may not know this requirement and will miss out on claiming portability.
6. Unless Congress acts, the current $5 million exception will revert back to a $1 million exception with a 55% tax rate on January 1,2013. To ensure that funds are safely shielded from potential estate taxes, individuals should consider funding trusts now as the future of the estate tax is uncertain.

 See David W. Schlossberg, The End of Trusts?, LifeHealthPro, Fe. 23, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Happy Leap Day!!

Financial Planning Based on the Bible

Ron Blue is the founding director of Kingdom Advisors in Atlanta. The financial planning firm provides Bible-based financial planning for clients. Blue believes that there are over 2,000 verses in the Bible that deal with money and we should be guided by those verses.

Blue believes that financial happiness is does not come from how much money that you have, but it lies in a client’s beliefs about money and his/her life. The Bible indicates that careful stewardship is an important part of money management, but it also seems to teach that people should be prayerful in determining how much they should give to charity instead of just automatically tithing the minimum 10%. Blue also points out that long-term planning is just a natural extension of Bible-based planning.

He understands that Christian financial planning will not be right for everyone, but for many Christians, he is able to form a great client relationship with them because of the Bible-based money management strategies. Blue intends to raise the requirements for becoming a Christian financial planner to ensure that advisers do not misuse the strategies to defraud investors.

See Veronica Dagher, Bible-Based Advising Raises Up The Kingdom, The Wall Street Journal, Feb. 28, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Five Important Estate Planning Documents

The first step you should take when preparing to make an estate plan is to create a net worth statement that sets out all of your assets and life insurance investments. You can present this to an attorney or a financial planner when they begin to design a plan suited to your needs. Simply put, there are five documents you should be aware of when making your estate plan so that you know whether or not it is best for you to include them in your plan. 

1. Will: This document can be customized to provide detailed instructions on how you want your assets distributed to your family and other beneficiaries upon your death. 

2. Durable Power of Attorney: This document allows you to name another person to act on your behalf. 

3. Health Care Power of Attorney: This document authorizes someone to make medical decisions for you in the event you become incapacitated. 

4. Living Will: This will gives instructions regarding the use of life-sustaining measures if you come down with a terminal illness. It expresses your desires, but does not give anyone else the authority to speak in your place.

5. Revocable Living Trust: You can transfer assets into a revocable trust so that while you're still living, you can manage your financial affairs. This way, the trust assets escape probate and keeps your personal information private. 

See Sean Randall, Your Five Most Important Estate Planning Documents...Are You Prepared?, The Georgetown Dish, Feb. 26, 2012.