Wills, Trusts & Estates Prof Blog

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

Wednesday, February 25, 2015

Reporter Bob Simon's Will Made Public

Bob simon 2

“60 Minutes” correspondent Bob Simon, killed in a horrific car wreck two weeks ago, left an estate worth about $2 million to his wife. 

Details were contained in Simon’s October 2009 will, made public Wednesday.  Simon left his wife of 49 years, Francoise Anne-Marie Simon, a $1 million Hamptons home and another $1 million in stocks and other investments.  Mrs. Simon was named as the sole executor of the estate.

See Barbara Ross, 60 Minutes’ Reporter Bob Simon Leaves $2 Million Estate to Wife of 49 Years, New York Daily News, Feb. 25, 2015.

February 25, 2015 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Bobbi Kristina Taken Out of Medically Induced Coma

Bobbi Kristina

I have previously discussed Bobbi Kristina, the daughter of Whitney Houston and Bobby Brown, who was found unconscious in her bathtub last month. 

As of today, Bobbi Kristina has been taken out of a medically induced coma.  However, the sole heir to Houston’s multimillion-dollar estate remains on live support, which includes a ventilator and feeding tube.  “We’re hoping for a significant change soon, but we know that it may not change anything,” reported a family member. 

Recently, Brown’s feud with his daughter’s boyfriend, Nick Gordon, has escalated.  Earlier this week, Gordon insinuated Brown’s concerns for Bobbi Kristina were disingenuous, tweeting: “Go check out the few pics he has with her.  Check out Kris and I pics.  Dude is a joke played out.  He is here fore publicity.”  The family is trying to ignore the drama with Gordon and focus their attention on Bobbi Kristina.

See Janelle Griffith, Bobbi Kristina Brown Taken Out of Coma Remains on Life Support, Relative Says, NJ.com, Feb. 25, 2015.

February 25, 2015 in Current Affairs, Estate Administration, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

When a Testator's Attorney Can Be Liable to a Beneficiary

Gavel2

In a recent decision, the U.S. District Court for the District of Massachusetts ruled a testator’s attorney could be held liable to a prospective beneficiary for fraudulent misrepresentations. In Spinnato v. Gold-man, 2014 WL 7236343 (D. Mass. Dec. 19, 2014), applying Massachusetts law, the Court distinguished a fraudulent misrepresentation claim, where the case law is unsettled, from a negligence, negligent misrepresentation, and breach of fiduciary duty claim, where it is well-settled that a testator’s attorney cannot be held liable to prospective  beneficiaries because the testator’s attorney does not owe a duty of care to prospective  beneficiaries.

The Spinnato decision serves as a forewarning to estate  planning attorneys to “speak up now or forever hold your peace,” as waiting until after the  testator’s death to assert the testator was incompetent or under the undue influence of another  when the testator executed or changed an estate planning document may give rise to an actionable  claim by a beneficiary.

See LeClair Ryan, U.S. District Court for District of Massachusetts Holds Testator’s Attorney Can Be Liable to a Beneficiary, Lexology, Feb. 19, 2015.

February 25, 2015 in Estate Administration, Estate Planning - Generally, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Ernie Banks Estate Worth $16,000

Ernie BanksWhen Chicago Cubs legend Ernie Banks passed away, he had assets worth $16,000.  Cook County Probate Judge James Riley gave his caregiver, Regina Rice, thirty days to provide a full accounting of Banks’ estate at the time of his death last month. 

I have previously discussed the battle between Rice and Banks’ estranged wife, Elizabeth Banks, over what should be done with Ernie Banks’ remains and who should inherit his estate.  Elizabeth Banks prevailed with the remains, having them buried at a cemetery a few blocks from Wrigley Field.

Banks is now contesting a will that her husband signed in October, without her knowledge, that specifies all his assets should go to Rice.  Ernie Banks’ two sons will also contest the will.

At a short hearing yesterday, Elizabeth Banks’ attorneys were surprised that Rice’s attorney’s estimate of Ernie Banks’ estate was worth only $16,000.  This prompted Judge Riley to order Rice to provide documentation about the assets.  Moreover, Rice must seek the judge’s permission before selling any of the estate’s assets.

See Lawyer Says Ernie Banks Assets Worth $16,000, Associated Press, Feb. 24, 2015.

February 25, 2015 in Estate Administration, Estate Planning - Generally, Guardianship, Wills | Permalink | Comments (0) | TrackBack (0)

Risky Behavior That Risks Life Insurance Coverage

InsuranceRisky behavior, and lying about risk taking proclivities, can void life insurance policies. Here is a list of ten risk takers and risky behaviors that are prime grounds for life insurance voidance:

  1. Lovers of extreme mountain biking.
  2. Those that fancy falling in style through wingsuit flying.
  3. Tour guides that up the excitement by hand feeding crocodiles .
  4. Gun enthusiast that forget about gun safety.
  5. Spectators of dangerous activities, such as rally car races.
  6. Farmland demolition derby  competitors.
  7. Glacier surfing.
  8. Fireworks lovers that don't also love safety precautions.
  9. Pilots of small planes.
  10. Those that pit their speed and agility against the power of stampeding bulls.

See Bill Coffin, Meet the 10 Worst Life Insurance Clients in the World, Life Health Pro, Feb. 5, 2015.

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

February 25, 2015 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Pending Tax Cases Garner Attention at Heckerling

Tax3As I have previously discussed, tax issues were a major focus of this year's 49th Annual Heckerling Institute on Estate Planning. Two ongoing tax cases involving the IRS and trusts were part of that tax minded focus. The two cases are Estate of Donald Woelbing v. Commissioner and Estate of Marion Woelbing v. Commissioner, which both involve valuation of a promissory note and stock sold to a trust, and the applicability of IRC Sections 2036 and 2038.

See Kevin Matz, A View From the Audience at Heckerling: Part II, Wealth Management, Feb. 23, 2015.

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

February 25, 2015 in Estate Tax, New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)

Minassian v. Rachins: Appointment and Actions of Trust Protector Found Proper

GavelIn a recent Florida breach of fiduciary duty against a trustee, the settlor’s revocable trust continued after his death for the benefit of his widow, who was sole trustee and sole beneficiary during her life. At her death, separate shares for the settlor’s children were to be created from the remaining trust property. The children brought an action against the trustee claiming breach of fiduciary duty and the trustee moved to dismiss on the grounds that the children were not beneficiaries because the trust ended at her death and the children were beneficiaries only of the trusts to be created then.

The trial court denied the trustee’s motion on the grounds that the trust terms were ambiguous on the children’s status.  The trustee then appointed a trust protector under trust terms authorizing her to do so. The trust protector was authorized to amend the trust to correct ambiguities and drafting errors that defeat the settlor’s intent as determined by the trust protector. The protector then amended the trust to make it clear that the trust terminates on the widow’s death at which time new trusts are created for the children out of any remaining trust principal. The trial court granted the children’s motion to invalidate the amendments made by the trust protector.

In Minassian v. Rachins, the intermediate Florida appellate court reversed, holding, first, that the trust protector provision is valid because authorized by state law, and, second, the amendment did further the settlor’s intent as shown by extrinsic evidence including an affidavit by the trust protector who was the original drafter of the trust.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

February 25, 2015 in New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 24, 2015

Goal Based Planning Improves Saving

Piggy bankAccording to the 8th annual America Saves study, goal-based planning significantly helps people save money.  The survey of 1,009 adults found that those with a specific plan to reach their personal goals were far more likely to make good or excellent progress towards their needs, spend less income and save the difference, have emergency savings, and save enough for retirement.  They are also more likely to name higher goals. 

“Making a savings plan focuses one’s attention on how one spends and saves their income.  Those with a savings plan tend to be more careful spending money, less willing to borrow unwisely, and more likely to save conscientiously.” 

Generally, Americans did better saving money over this last year.  The amount of people saving at least 5 percent of their income increased from 47 percent to 52 percent, and people who feel they are making either good or excellent savings progress grew from 35 percent to 40 percent. 

See Ryan W. Neal, Goal-Based Planning Improves Saving, Survey Finds, Wealth Management, Feb. 23, 2015.

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

February 24, 2015 in Estate Administration, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Simple Will Versus Living Trust

Trust

Oftentimes clients discover that they would prefer to plan their estate using a living trust rather than a simple will. 

Although a living trust usually costs more to create than a will, one of the greatest benefits of a living trust is the ability to avoid probate.  Probate can be timely, costly and easily contested.  If a trust is properly funded, the court system can be completely avoided at the death of the trustmaker.  Moreover, a living trust can be established to provide asset protection for your beneficiaries.  This means that their inheritance would be protected for them from things such as a divorce, creditors, bankruptcy, lawsuits, long-term care costs, etc. 

After discovering all the benefits that can be drafted into a living trust, many choose to pay a little more now during life to get all the benefits of a living trust, and then also save more after death for their beneficiaries. 

See Carissa Giebel, Why Pay More for a Living Trust? Green Bay Press Gazette, Feb. 23, 2015. 

February 24, 2015 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Transparency and Your Estate Plan

Estate plan 2

When it comes to discussing estate planning with adult children, many experts believe transparency is the best approach.  Yet, what “transparency” actually means will differ according to the client and the specifics of the estate and family members.  In some instances, it will mean sharing all details of the will, trust, and other estate planning documents.  In other cases, the details might remain obscure, but sharing certain kinds of information should take place.  Some factors to consider include:

  • What to tell.  At the very least, family members should be told where the estate planning documents are located, who are the key advisors and what immediate steps they might need to take if an unexpected death occurs. 
  • How to tell.  Thoughtful families bring together all adult children to have a conversation, focusing on the meaning and purpose, rather than a “pre-reading” of the will.  An ethical will can be shared before death as an opener to these conversations.
  • Special circumstances.  Some families are in positions where more (or less) disclosure is advisable.  In a family business, succession planning for management and ownership should be seen as a process, not a one-time event. 
  • What not to tell.  When life expectancy increases, many clients with adult children could possibly deplete their resources before their demise.  Thus, it makes sense to withhold specific financial information and other details to preserve a sense of autonomy over their lives.

See Patricia Angus, Should Parents Tell Their Adult Children What’s in Their Estate-Planning Documents? Yes, Wealth Management, Feb. 23, 2015. 

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

February 24, 2015 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)