Wills, Trusts & Estates Prof Blog

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

Friday, March 29, 2013

Third Edition of the Exam Pro Workbook on Estates and Future Interests

Raymond ColettaRaymond R. Coletta (Professor of Law, McGeorge School of Law - University of the Pacific) recently published a book entitled, Coletta's Exam Pro Workbook on Estate and Future Interests (3d ed., 2013). Provided below is the description of the book:

This title provides a basic introduction to estates and future interests law. Designed to offer solid knowledge of the area’s central concepts, it guides readers through a series of increasingly complex conveyances. The workbook begins with an analysis of the fee simple estate and builds sequentially toward more complicated interests and conveyances. The information proceeds from the simple to more complex, later problems building on the successful command of earlier material. Each problem is followed not only by that problem’s answer but also by a complete analysis of how the answer was derived. The workbook also contains an extensive glossary, summary charts, and a set of review problems that test the reader’s developing mastery of the material.

March 29, 2013 in Books - For the Classroom, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

More on Vidal Sassoon Disinheriting His Adopted Son

Vidal SasoonAs I have previously discussed, Vidal Sasson disinherited his son David because Vidal considered him to be mischievous. He also wrote his three former wives out of his will. Vidal discussed his relationship with son in his autobiography. In one such incident, Vidal described how his son attended a reform school and how he almost urinated on Johnny Carson's head while they were at a fashion party. His son urinated out of a second story window nearly missed Carson. Vidal was quoted as saying that his relationship with his son was hopeless.

See Vidal Sasson Removed Adopted Son From Will, Morning Rush, Mar. 2013.

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

March 29, 2013 in Current Events, Wills | Permalink | Comments (0) | TrackBack (0)

Court Rules Goodman's Adoption of His Girlfriend Is Void

Estate DisputeAs I have previously discussed, John Goodman adopted his girlfriend Heather Laruso Hutchins, which would entitle her to a third of his biological children's trust fund.The fund is worth about $300 Million. Now, a court has voided the adult adoption of the polo tycoon. The children, through their legal guardian Jeffrey Goddess, that brought charges against their father alleging that he was committing fraud through the adoption process.His biological children "demanded that a judge throw out the dad's move to adopt his lover, accusing him of intentionally duping the court."

All of this came after Goodman was charged with "DUI manslaughter, vehicular manslaughter, and leaving the scene of the crash." In 2010, Goodman smashed his car into Scott Smith's vehicle causing Smith's car to veer into a canal where he drowned. Not only have criminal charges have been placed against him but also has a civil suit been filed by Smith's parents. Many believe that the adoption of his girlfriend was intended to shield his assets from potential liability. Goodman's attorney deny these allegations and claim that Goodman only intends "to secure the assets of his children and family investments."

See Beth Stebner, Thomas Durante, and Snejana Farberov, Judge Strikes Down Disgraced Polo Billionaire's Adoption of his 42-Year-Old Girlfriend So She Could Share His Children's $300m Trust Fund, The Daily Mail, Mar. 28, 2013.

March 29, 2013 in Current Affairs, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, March 28, 2013

Article on Fiduciary Obligations of Financial Advisers

Sitkoff-lrRobert H. Sitkoff (John L. Gray Professor of Law,Harvard University) recently published his article entitled The Fiduciary Obligations of Financial Advisors Under the Law of Agency, 2013.  The abstract available on SSRN is below: 

This paper considers how agency fiduciary law might be applied to a financial advisor with discretionary trading authority over a client's account. It (i) surveys the agency problem to which the fiduciary obligation is directed; (ii) examines the legal context by considering how the fiduciary obligation undertakes to mitigate this roblem; and (iii) examines several potential applications of agency fiduciary law to financial advisors, including principal trades and the role of informed consent by the client, organizing the discussion under the great fiduciary  rubrics of loyalty and care. This paper was sponsored by Federated Investors, Inc.

March 28, 2013 in Articles | Permalink | Comments (0) | TrackBack (0)

Federal Judge Sentences Former Estate Planning Attorney to Ten Years in Prison

Unknown-2Joe Don Johnson was an estate planner who drew up wills for his elder clients and would convince the seniors to invest their life savings with Global West Funding Ltd., a defunct Oklahoma City-based company owned by Bill McKye. It has now been discovered that he was involved in a Ponzi scheme. Johnson promised his client returns up to 20%, but most of the money went to earlier investors, commissions to Johnson, and other expenses.  

A federal judge recently sentenced Johnson to ten years in prison and to pay $4.6 million in restitution for his role in the scheme.

Johnson's victims are happy to see that the judge gave Johnson a long prison sentence, but they aren't counting on receiving restitution up to the amounts they lost.

In April 2012, McKye was sentenced to 21 years in prison and ordered to pay $4.5 million in restitution to his victims. McKye has appealed that conviction to the 10th U.S. Circuit Court of Appeals.

See Brianna Bailey, Midwest City Estate Planner Sentenced to 10 Years in Prison for Role in Ponzi Scheme, NewsOK, Mar. 28, 2013.

March 28, 2013 in Current Events | Permalink | Comments (0) | TrackBack (0)

Seddon Found Guilty of Murder

Estate DisputeAs I have previously discussed, Stephen Seddon was on trial accused of murdering both of his parents to gain his £230,000 inheritance. Now, a jury has found him guilty of two counts of attempted murder and two counts of murder for his role in the death of his parents. The two counts of attempted murder relate to the fact that he failed to murder his parents in a fake accident. The two counts of murder arose from the fact that he entered his parent's home and killed them with a shotgun.

See Seaham Man Guilty of Executing Parents To Get Hands On Inheritance, The Northern Echo, Mar. 27, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

March 28, 2013 | Permalink | Comments (0) | TrackBack (0)

Make Use Of Your Frequent Flyer Miles While You Can

AirplaneIf you or someone you know owns Delta Skymiles, you or they better make use of them while the person is alive or risk losing them all. Recently, Delta changed its policy so that its members can no longer transfer their frequent flyer miles to another after a member dies. This policy decision has sparked outrage among its members. One of their platinum status members noted that the reason that he is particularly angry is because he believes that the policy will ensure that Delta will get to retire those miles. He claimed that people who do travel frequently, the road warriors as he called them, travel too often on business to actually put those miles to use. He also remarked that it is often the case that they choose to transfer their frequent flyer miles to others for their use. Therefore, from his perspective, Delta is essentially hitting the delete button.

Some travel agents have argued that it is not surprising that many people would be angry with the policy considering that many people view frequent flyer miles as money. It makes no sense to people that their money would simply disappear following their death. Delta countered by arguing that they are not the only airline with this type of policy. In fact, "United, Southwest and JetBlue already have similar rules in place." The measure by Delta Airlines is likely the result of trying to cut costs.

See A. Pawlowski, Delta Skymiles Now Die When You Do, NBC News, Mar. 27, 2013.

Special thanks to Jerry Cooper (The Trust Advisor) for bringing this article to my attention.

March 28, 2013 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

U.S. Supreme Court Could Ease Estate Planning for Same-Sex Couples

GavelRecently, the U.S. Supreme Court heard arguments that could put a stop to some of the hoops that wealthy same-sex married couples face during estate planning. Currently, heterosexuals and their spouses can transfer as much money as they want during their lives and after death without worrying about paying any gift or estate taxes. Federal law creates this deduction. However, the deduction is not available to same-sex couples even in states that permit same-sex marriage.  Section 3 of the federal Defense of Marriage Act (DOMA) prohibits the deduction from applying to same- sex couples. The effect of this section requires same-sex couples to pay estate taxes on inheritances from their partners when the inheritance rises above the tax- free amount. There are roughly 1,000 federal lifetime or after death benefits available to heterosexual spouses that are denied to same-sex spouses.

The arguments being heard by the Supreme Court are based on Edith Windsor's case. Edith Windsor was partners with Thea Spyer for over 44 years. In 2009, Thea passed away and left Windsor a large portion of her assets. However, because DOMA does not recognize marriages between same-sex couples Windsor ended up paying an estate tax for $363,053. As a result, Windsor filed a lawsuit alleging DOMA violates Equal Protection. Both lower courts agreed and held the funds should be returned.

Now, the U.S. Supreme Court will decide DOMA's constitutionality and affirm or reverse the lower court ruling. Reports on the oral arguments imply that five justices are leaning toward holding DOMA's definition of marriage unconstitutional. Should the court rule that DOMA's marriage definition violates equal protection all the federal benefits available to heterosexual spouses would extend to same-sex couples in states where same-sex marriage is recognized. Additionally, it would ease the difficulty many estate planners face when planning affluent same –sex couples estate. Instead, of creating complicated trusts for tax savings they could take advantage of the many federal benefits that have existed for heterosexual couples in the past.

See Deborah Jacobs, High Court Ruling On Same- Sex Marraige Could Alter Estate Planning For Couples, Forbes.com, Mar. 27, 2013. 

March 28, 2013 in Estate Planning - Generally, New Cases | Permalink | Comments (0) | TrackBack (0)

Audio Highlights of Windsor v. United States

Supreme CourtAs I have previously discussed, the Supreme Court of the United States will hear two cases this week regarding same-sex marriage, Hollingsworth v. Perry and Windsor v. United States. Provided below is a link to the audio highlights of the DOMA argument that the court took up on Wednesday, March 27, 2013.

See United States v. Windsor, The Oyez Project at IIT Chicago-Kent College of Law, March 27, 2013.

March 28, 2013 in Current Affairs, Current Events, Estate Administration, New Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 27, 2013

Lottery Winner Goes Through $10 Million in Less Than 10 Years

ImagesNine years ago, Sharon Tirabassi, a 35-year old resident of Hamilton, Ontario, won $10,569,000.10 in the Canadian Lottery. Today, after spending most of that money, she is back riding the bus, working part-time, and living in a rented house.  After buying a big house, fancy cars, designer clothes, exotic trips, sharing money with friends and family and spending it on exotic trips, the remainder of the windfall is in a trust for her six children.

At the time she won the lottery, Tirabassi was a single mother just employed as a personal care provider.  When Tirabassi had dwindled the winnings down to $750,000, she decided to return to real life. Tirabassi and her husband were used to not having money growing up, and her husband mentioned that the money actually caused a lot of headaches. 

The Huffington Post contrasts Tirabassi's story with Sandra Hayes's story.  Sandra won $6 million in 2006 when she split Powerball winnings amongst her coworkers.  She did go on an initial spending spree, but she also paid off her student loans, her mortgage, and was careful about loaning money to other people.  Now Sandra lives comfortably. 

See Earnon Murphy, How One Lottery Winner Blew Through $10 Million in Less Than 10 Years, Huffpost Living Canada, Mar. 25, 2013. 

March 27, 2013 in Current Events | Permalink | Comments (0) | TrackBack (0)