Wills, Trusts & Estates Prof Blog

Estate Planning After Your Divorce

Upon a divorce, you should immediately take action to assure your estate plan reflects your new marital status. You should start by reviewing and revising any estate planning documents—trusts, power of attorney, will, life insurance policies, and retirement accounts. Potentially, if you do not change your estate planning documents, parts of your estate can end up going to your ex-spouse, which may not be what you intended. Also, you must make sure that any changes are in line with the provisions of your divorce decree because it is a legally binding document.

See Mark Eghrari, The First Thing You Must Do When Your Divorce Is Finalized, Forbes, August 14, 2016.

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

WWE CEO Sells 1.55 Million Shares as Part of Estate Plan

Vince McMahon, the CEO of WWE, sold 1.55 million shares in WWE as part of his estate plan. The sale was valued at $32.5 million, representing approximately 2% of WWE’s total Class A and B shares. McMahon still has majority ownership with about 47% of total shares. He later expressed his desire to not sell any more shares.

See Michelle Toh, WWE CEO Sells 1.55 Million Shares in Estate Planning, Fortune, August 18, 2016.

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

Johnny Depp's Charitable Divorce Settlement

In the settlement agreement for Johnny Depp and Amber Heard’s divorce, Heard pledged to donate her $7 million settlement to charity. Depp has in turn decided to donate the amount directly to the charities in Heard’s name, sparking controversy over whether Depp received a substantial tax benefit. Heard’s team is arguing that Depp must change the settlement agreement or make a $14 million donation to account for the full amount of the payment obligation. Experts argue that Depp may not have even received such a deduction because it was not detached and disinterested generosity.

See Anna Sulkin, Johnny Depp’s “Charitable” Divorce Settlement, Wealth Management, August 29, 2016.

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

Tom Clancy's Widow Scores Another Legal Victory

Tom Clancy’s widow has scored another legal victory in the battle over who will assume the tax bill on her late author husband’s $86 million estate. The court affirmed Mr. Clancy’s intent to preserve the marital deduction benefit for his widow and their daughter. The court relied on the Savings Clause from Mr. Clancy’s second codicil to trump the will provision for the payment of taxes from the residuary estate. If the court had not used the Savings Clause, the tax burden would have been nearly $4 million higher.

See Anna Sulkin, Maryland High Court Sides with Tom Clancy’s Widow in Her Estate Battle, Wealth Management, August 26, 2016.

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

Article on University Endowment Management

Christopher J. Ryan, Jr. recently published an Article entitled, Trusting U.: Examining University Endowment Management, 42 J.C. & U.L. 159 (2016). Provided below is a summary of the Article:

This article aims to bring to light the endowment management practices that resulted in this unprecedented growth and loss to endowment value on a national scale. Part I of this article examines the history of university endowments in America and provides a primer on the function of university endowments. In Part II, this article introduces the legal requirements of universities and their endowment managers that have sprung up as a result of the historical economic crises that university endowments have weathered. Part III furnishes data on the effect of the recent economic recession on university endowments, examining returns under a hypothetical alternative investment strategy that would have resulted in greater appreciation in market value and increased market stability between FY2004 and 2014 for half of the universities in the study sample, and also discusses the prevailing, though useless, cause of action by means of which donors may challenge a university's endowment spending, establishing a correlation between economic recessions and challenged gifts to universities in the American courts. Finally, Part IV offers recommendations for universities and their endowment managers to navigate uncertain waters in the modern context and articulates a sensible, sustainable university endowment management standard.

Tube Feeding Decline for Dementia Patients

A new national study has found that advanced dementia patients receiving a feeding tube has dropped more than 50%. It is becoming less controversial for surrogate decision makers to decline tube feeding and rely on hand feeding. Now, families and physicians are beginning to understand the negative effects of feeding tubes for those patients with the terminal disease. Feeding tubes do not keep dementia patients alive longer, and they cut out the needed social interaction of hand feeding. Today, more and more terminally ill patients are focusing on end-of-life quality rather than just being kept alive.

See Paula Span, The Decline of Tube Feeding for Dementia Patients, NY Times, August 29, 2016.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) & Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.

How Vacation May Lead to Divorce

A recent study, analyzing 14 years of divorce data from 37 countries, finds that divorce filings spike twice a year following the annual schedule of family holidays. Divorce filings peak in March and August—March falling after winter holidays and Valentine’s Day while August follows July, the most popular month for vacation. November and December have the lowest occurrences of divorce filings. These findings represent a seasonal pattern. Specifically, family life often revolves around social clocks that recognize important dates, like holidays and birthdays. The theory turns on the idea that vacation realizes a time when couples are optimistic about the future of their relationships, but after spending time with their spouse on vacation, the stress recreates that unhappy feeling from before the vacation.

See Ben Steverman, Summer Vacations Can Lead to Divorce, Bloomberg, August 22, 2016.

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

Article on Privacy Interests at Death

Natalie M. Banta recently published an Article entitled, Death and Privacy in the Digital Age, 94 N.C. L. Rev. 927 (2016). Provided below is a summary of the Article:

Americans store an overwhelming amount of sensitive, personal information online. In email accounts, social networking posts, blogs, shared pictures, and private documents, individuals store (perhaps unwittingly) the secrets and details of their lives in an unprecedented manner. During an individual's life, these accounts are seemingly under the direct control of an account holder. Privacy is occasionally threatened, but people continue to use online services and pour personal information into their online accounts.

When developers created these online services and platforms, it is unlikely that they gave much thought to what would happen to accounts when an account holder died. Yet, the treatment of these accounts after an account holder's death is an increasingly pressing issue in today's society as more and more Americans die with active, password-protected accounts in their name. In determining how these assets will be handled at an individual's death, powerful principles collide--including privacy, contract, property, and freedom of information.

This Article discusses how privacy interests are traditionally terminated at death and explores how they should be revived and reshaped in a digital future. It argues that to align posthumous privacy interests with the needs of a digital future, the law must ensure that succession principles apply to privacy as well as property rights, and that decedents' individual intent for the fate of digital assets is honored. The Article acknowledges that private contracts may be a sufficient tool to protect privacy after death in some instances, but argues that the lodestar in any discussion of posthumous privacy should be testamentary intent. In the absence of testamentary intent, state legislatures should enact default rules of digital asset succession that accord with the family-centered paradigm of inheritance.

A New $100 Billion Business: Endowment Management

There is huge competition for money managers fighting to oversee endowments. The business has grown into an almost $100 billion business, attracting stiff competition amongst banks, consultants, and boutiques. This area of money management represents a rare area of potential growth for those currently competing with index- and computer-driven strategies. University endowments also offer access to wealthy benefactors that can become future clients.    

See Michael McDonald, Wall Street Redoubles Fight to Manage $100 Billion at Endowments, Bloomberg, August 29, 2016.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

CBS Deal in the Hands of Shari Redstone

With her new control over Viacom, Shari Redstone must decide what to do with all the power. There have been talks over Viacom reuniting with CBS, but no indication that the deal is imminent. CBS and Viacom split ways in 2006, which may have been to the benefit of CBS. Viacom has experienced slower growth with falling ratings while CBS has been the most-watched broadcast network for over ten years. There are several proponents and opponents of the deal between the two networks, but the deal ultimately resides in the hands of Shari Redstone.

See Christopher Pameri & Lucas Shaw, Viacom Control Shift to Redstone Heir Lifts Prospect of CBS Deal, Bloomberg, August 29, 2016.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.