Wills, Trusts & Estates Prof Blog

Mother Scams Daughter Out of $48K Trust Fund

A city welfare worker scammed her own daughter out of a $48,000 trust fund left by her late father, who was shot to death during a robbery in 2006. 

According to a new lawsuit, Vanessa Nieves, 21, learned late last year that her mother, Gloria Torres, tricked her into signing over the insurance money that she was supposed to receive at 18.  Torres convinced her daughter that the paperwork would simply freeze the account until she turned 21.  Nieves subsequently agreed to sign the papers because she wanted the money to pay for her education. 

When Nieves went to withdraw the funds from Chase Bank in December, she was told by a clerk that her mother had deposited the funds into her own account and closed her daughter’s account. 

See Julia Marsh, Mom Accused of Scamming Daughter Out of $48K Trust Fund, New York Post, Jan. 31, 2015.

Special thanks to Hani Sarji (Attorney, New York) for bringing this article to my attention. 

Free Webinar on the Uniform Powers of Appointment Act

The American Bar Association Section of Real Property, Trust and Estate Law is holding a free webinar for RPTE members entitled, The Uniform Powers of Appointment Act: Straightforward Default Rules to Fill a Vacuum, on February 11^th from 12:30-1:30 PM ET.  Here is why you should attend:

Powers of appointment are among the most commonly-used techniques in estate planning.  Despite this fact, little case law and virtually no statutory law governing powers of appointment exists in many United States jurisdictions.  As a result, much uncertainty exists in the planning and administration of estates, often leading to costly litigation.  Does the residuary clause of a powerholder’s will exercise a general power of appointment?  If a power of appointment is ambiguously drafted, may the powerholder give the appointive property only to some of the appointees, omitting others entirely? May a power of appointment be exercised in a record that is not a writing?  What is the difference between a power of appointment, a fiduciary power, and a power of attorney? When is a contract to exercise a power of appointment enforceable?  What are the rights of a powerholder’s creditors in the appointive property? 

In 2013, the Uniform Law Commission published the Uniform Powers of Appointment Act (“UPAA”) to provide a well-organized codification that eliminates much of the uncertainty surrounding the answers to these questions.  Our panelists have played important roles in the preparation and dissemination of the UPAA: Mr. Kent, a former ULC Commissioner from Colorado, was a member of the drafting committee; Professor Hess was the ABA Advisor to the drafting committee, and Mr. Orzeske is the member of the ULC staff who advises state legislatures planning for the enactment of the UPAA.

The speakers will first briefly summarize the process by which the act was written.  Then, they will discuss selected provisions dealing with the creation, exercise, and interpretation of powers of appointment.  Finally, they will outline experiences with enactment to date.

The myRA Pilot Program

A pilot program for myRA accounts was started by the Treasury Department in December. The myRAs are Roth IRAs that allow qualifying employees that do not have a workplace retirement account to save up to $15,000 or up to 30 years of savings though an account that only invests in new Treasury security. Pilot program participants will be communicated with by the Treasury to track their experience over the coming months.

See Karen Damato, Signups Begin for New 'myRA' Retirement Accounts, The Wall Street Journal, Dec, 23, 2014.

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

CLE on Commercial Real Estate Leasing

The ABA Section of Real Property, Trust and Estate Law is presenting the second of five eCLE webinars that are part the Fundamentals of Commercial Real Estate series. The upcoming webinar will focus on Commercial Real Estate Leasing on Wednesday, February 25, 2015, 12:00 – 1:30 p.m. CT. Here is why you should attend:

There's Still Time to Register For the Fundamentals of Commercial Real Estate eCLE Series

Even though this year's Fundamentals of Commercial Real Estate eCLE series has already started, it's not too late to register! When you purchase the entire series, you will be registered for all remaining webinars and receive recordings of any sessions that have already occured. Don't miss this excellent program covering topics like purchase and sale agreements, leasing, financing, title insurance, and zoning.

Session 2: Commercial Real Estate Leasing

Speakers: Mark Senn, Senn Visciano; Richard Frome, Frome Law, and Ruth Schoenmeyer, Pircher, Nichols & Meeks

A panel of experts will discuss the problems and pitfalls most often encountered in commercial real estate leasing.

Topics will include:

• Rent structures – gross, net, triple net; operating cost pass-throughs; percentage rent for retail leases
• Term: making sure that rent and term start at the same time
• Lender issues: subordination/non-disturbance agreements (why you do or don’t need them)
• Sublease/assignment: what issues really matter to each side
• Renewal options: does anyone really use those clauses for determining FMV (but why you still want to include them)

The 2015 Fundamentals of Commercial Real Estate Program is a comprehensive introduction to commercial real estate law.  This series will focus on issues as they relate to commercial real estate purchase & sale agreements, leasing, financing, title insurance, and zoning & land use.  It will feature five 90-minute sessions of continuing legal education programming specifically designed for attorneys who are new to the field of real estate law.

Tricks for Tax Time Retirement Savings

Many people fail to worry about retirement at tax time.  However, some of the most generous provisions of the tax code are incentives to save whether via a workplace 401(k), an Individual Retirement Account, a Roth IRA, or one of the many retirement plans for the self-employed.  Below are some tricks to make the most of the breaks, and traps to watch out for. 

• Snagging the Saver’s Credit.  One of the biggest overlooked credits is the saver’s credit, which gives low-to moderate income taxpayers with adjusted gross income of up to $60,000 a tax credit of up to $1,000 for saving in a retirement plan per person.
• Scour Taxes for Savings.  Taxpayers typically miss deductions and credits based on life changes.  Find one, and it is like free money.  Then, you can steer it towards retirement savings.
• Get a 1099.  Rather than a W-2, independent contractors or freelancers get 1099s.  They can benefit from retirement plans geared towards the self- employed: a SIMPLE IRA, SEP-IRA, a solo 401(k).  “There are a lot more ways to put money away and in higher dollar amounts.”
• Forego Cashing Out.  If you have switched jobs, do not take the money out of your old 401(k).  “We see a lot of low balances, and we try to remind people to roll it over into a new employer plan or into an IRA.”  If you leave a small balance 401(k) behind, your ex-employer could move it into a forced IRA, which could deplete the account.
• Help Kids Save.  Business owners can employ their children and start them on an early road to retirement savings by creating an IRA for their earnings. 

See Ashlea Ebeling, 7 Tax Time Retirement Savings Tricks, Forbes, Jan. 30, 2015.

New Case: In re Matheny Family Trust

In a recent case decided by the South Dakota Supreme Court, a sister and brother were co-trustees of a family trust established by the siblings’ parents.  Before their mother died, she entered into a contract for deed with brother for the sale of 480 acres of trust farmland.  After the mother died, the siblings stipulated for court supervision of the trust.  Subsequently, sister sued brother and his wife for undue influence on his contract for deed with their mother.  The circuit court granted summary judgment for Brother, concluding that Sister’s claim of undue influence was barred by the statute of limitations and that any oral agreement associated with the contract for deed was barred by the statute of frauds. The Supreme Court affirmed, holding (1) because Sister did not timely bring her claim for undue influence, the circuit court correctly ruled that the claim was barred by the statute of limitations; and (2) because Sister sought to enforce her asserted interest in the sale of real estate, the circuit court correctly ruled that any oral agreement regarding the real estate was barred by the statute of frauds.

See In re Matheny Family Trust (2015), Justia US Law. 

CLE on Powers of Attorney in Disability Planning

The American Bar Association Section of Real Property, Trust and Estate Law is holding a CLE entitled, Powers of Attorney in Disability Planning: Silver Bullet or Landmine? on February 3^rd, from 1:00-2:30 PM ET via webinar.  Here is why you should attend:

The power of attorney began as a simple instrument for disability planning for those of modest means. However, it has become an extremely powerful tool in late-in-life-estate planning, financial management during disability and health care decision-making.

This panel discussion will cover:

• Guidance for advising clients and the attorney-in-fact about powers of attorney;
• Ethical issues in the drafting and use of powers of attorney; and
• Drafting powers of attorney to accommodate the continuation of the estate planning process after disability of the principal in a changing tax environment, address health care decision-making and end of life care consistent with the principal's wishes, authorize the attorney-in-fact to access the principal's digital assets to the extent possible, and customize a power of attorney to reflect the client's unique situation rather than relying on standard forms.

Finding Forever After Death

Who owns what is left of you after you die, and what can they do that is out of the ordinary? 

Although a strange idea to ponder, one idea is to press your ashes into a vinyl record.  This record will play twelve minutes on each side.  You can record your voice, your favorite songs, your will, or just opt for silence.  The company advertises that its basic package will give you up to thirty discs and you can choose your own album covers. 

If you rather have something more permanent, consider a company called “LifeGem,” which takes your remains and turns you into a diamond.  The company states, “diamonds from ashes are created from a very specific source of carbon—your loved one.”  While you can choose among different colors and sizes, the company warns that the diamond they produce is not flawless. 

Other companies will mix your ashes with seeds and pot you in a biodegradable urn that gets planted, so you will eventually become a tree. 

See George M. Fox, Diamonds (and you) Can Be Forever, Big Canoe News, Jan. 10, 2015.

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

Tom Benson Defends His Competency Against Daughter, Grandchildren

As I have previously discussed, the daughter and grandchildren of the New Orleans Saints and Pelicans owner, Tom Benson, have challenged his competency after he decided to transfer the teams to his wife. On Tuesday, Benson's attorney's filed their response in the case defending his competency, and alleging that the move does not come out of concern for Benson but rather a desire to take control of the teams for themselves.

See Katie Moore, Attorney Fires Back at Saints/Pels Owner's Heirs, WWL TV, Jan. 28, 2015.

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

Longevity Insurance Increases in Popularity

The popularity of longevity insurance is on the rise. Longevity Insurance, or a deferred income annuity (DIA), helps ease retirees' fears of outliving their savings by deferring payout for 10 to 20 years. The purchase of DIAs increased by 35% in 2014 compared to the previous year. Though three years ago this type of annuity was only available through three insurers, they can now be purchased through fifteen.

These plans provide the advantage of a set income stream for those in their later years when dementia and other concerns of being vulnerable are high. However, these plans do have disadvantages, such as tying up funds for an extended period and planning for future inflation rates can be difficult.

See Glen Ruffenach, A New Tool to Make Your Money Last, The Wall Street Journal, Jan. 12, 2015.

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