Wills, Trusts & Estates Prof Blog

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

Monday, November 28, 2016

How Home Buyers Are Moving Toward Death Acceptance

MacabreThroughout New York City and state, the buildings are often a century or more old, which often means that someone has passed away in them. In recent years, however, brokers are saying that an apartment with death’s footprint on it is less of a deterrent with more competition and elusive deals. Buyers are less likely to be spooked by the air of death. Perhaps, this represents the cultural shift toward death acceptance. Disclosing a property’s macabre may be a sign of an invested broker, but now clients are taking apartments regardless of a property’s grim history.

See Kenneth R. Rosen, At Home with the Macabre, N.Y. Times, November 24, 2016.

November 28, 2016 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Article on Wills as Implied Unilateral Arbitration Contract

Will dispositionGary Spitko recently published an Article entitled, The Will as an Implied Unilateral Arbitration Contract, 68 Fla. L. Rev. 49 (2016). Provided below is an abstract of the Article:

A consensus has begun to develop in the case law, the academic commentary, and the statutory reform movement that a testator's provision in her will mandating arbitration of any challenge to the will should not be enforceable against a beneficiary who has not agreed to the arbitration provision, at least where the will contestant, by his contest, seeks to increase his inheritance outside the will. Grounding this consensus is the widespread understanding that a will is not a contract. This Article seeks to challenge both the understanding that a will is not a contract and the opposition to enforcement of testator-compelled arbitration provisions that arises from that understanding.

This Article argues that a will is part of an implied unilateral contract between the testator and the state in which the state offers to honor the testator's donative intent, and the testator accepts and provides consideration for the offer by creating and preserving wealth. Importantly, the greater contract respecting donative freedom of which the will is a part also includes a provision for the distribution of an individual's intestate property in line with that individual's imputed intent should the individual fail to execute an effective estate plan. Similar to a testator, a property owner who has failed to make an effective estate plan accepts this offer of intestate distribution through her industry and thrift. This Article's theory borrows from the law respecting implied unilateral contracts arising from employee handbooks in concluding that it should be of no moment that the property owner is unfamiliar with the specifics of the state probate code. Rather, the critical factor should be that the state has, through its offer to respect donative intent, created an atmosphere that is “instinct with an obligation” and that encourages diligence and the prudent management of wealth.

The conclusion that a will is a contract between the testator and the state grounds this Article's additional argument that the Federal Arbitration Act (FAA) and state arbitration statutes require enforcement of a testator-compelled arbitration provision contained in a will even against a beneficiary who has not agreed to the arbitration provision. Settled arbitration law in conjunction with third-party beneficiary theory or direct benefits estoppel theory supports binding the beneficiary to the will's arbitration contract. A virtue of this Article's theory-that the will and the intestacy statutes are both clauses in a greater donative freedom contract-is that the analysis escapes the limitations inherent in the dominant understanding that a will's arbitration clause, if enforceable at all, can be enforced only against a beneficiary who seeks, by his will contest, to increase his inheritance under the will as opposed to circumstances in which the donee seeks to increase his intestate inheritance. According to the conventional wisdom, even if arbitration clauses are enforceable in some testamentary instruments, they govern only a narrow range of claims. This Article's implied unilateral contract theory goes further and expands the universe of arbitrable contests. Specifically, this Article's theory is the first that encompasses even a will contest that seeks to render the will a complete nullity.

November 28, 2016 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, November 27, 2016

Missing Elder Abuse in the ER

Elder abuse emergencyA recent study finds that approximately 10% of American seniors suffer elder abuse, but this problem is often missed in hospital emergency departments. Emergency doctors only make a formal diagnosis in one out of every 7,700 visits by seniors. American seniors often rely on emergency care doctors over primary care doctors for their routine care, making over 23 million emergency department visits per year. This represents an opportunity for emergency departments to identify elder abuse and ensure the safety of these seniors.

See Robert Preidt, Elder Abuse Often Missed in the ER, CBS News, November 25, 2016.

November 27, 2016 in Elder Law | Permalink | Comments (0)

What Would You Do If Your Inheritance Disappeared?

InheritanceWhat if, as a successor trustee, you realized that your family member left nearly $1 million to strangers or dead people and little to none to their immediate family? Would you contest this trust on lack of capacity? An individual signing legal documents must be of sound mind, memory, and understanding. If the instructions devised, appear to be rational and contain no irregularities that is a good sign that the individual had capacity. If you suspect that the individual lacked capacity, it is a good idea to consult a lawyer, petition the probate court, and appoint an independent executor. Do not sit back and let your families $1 million inheritance disappear.

See Quentin Fottrell, My Stepfather Left $1 Million to Strangers and Dead People, Market Watch, November 26, 2016.

November 27, 2016 in Estate Planning - Generally, Trusts | Permalink | Comments (0)

Saturday, November 26, 2016

Stephen Hawking Predicts Human Race Survival

PlanetsStephen Hawking predicts that humanity will not survive another 1,000 years on planet Earth due to things like climate change, nuclear weapons, and robots. Hawking claims that the human race’s best chance for survival is establishing new colonies on other planets. This prediction comes at a time when space exploration has been ramping up. NASA is searching for “goldilocks” that might help sustain human life while Elon Musk plans to colonize Mars within the next century.

 See Doug Criss, Stephen Hawking Says We’ve Got About 1,000 Years to Find a New Place to Live, CNN, November 18, 2016.

November 26, 2016 in Current Events, Science, Technology | Permalink | Comments (1)

New Mexico Updates Trust & Estate Legislation

New mexicoNew Mexico has updated its trust and estate legislation in 2016. The state has amended the Uniform Statutory Rule Against Perpetuities, abolishing the rule for personal property held in trust and extending the time period to 365 years for real property held in trust. § 45-2-904 (A)(8), (B), New Mexico Statutes Annotated (NMSA). Additionally, New Mexico has adopted the Uniform Trust Decanting Act (§§ 46-12-1 et seq., NMSA) and the Uniform Powers of Appointment Act (§§ 46-11-1 et seq., NMSA). Finally, in its revision, New Mexico has made the Uniform Probate Code more uniform (§§ 45-1-1 et seq., NMSA).

Special thanks to Jack Burton (Attorney, Rodey Law) for bringing this information to my attention.  

November 26, 2016 in Current Events, Estate Planning - Generally, New Legislation, Trusts, Wills | Permalink | Comments (0)

Friday, November 25, 2016

How Couples Are Ruining Their Future Retirement

Retirement coupleCoupling can provide a lot of benefits, but there are many couples today who are not taking advantage of them. In fact, American couples could be making mistakes that are seriously undermining their financial advantage. One mistake is that the couples who are saving are doing so in the wrong accounts. Instead of first matching their earning in an employer-sponsored retirement plan, they are using savings accounts that have low interests rates, which makes it hard to grow your money. Additionally, couples are placing the responsibility for saving for retirement on one partner. Savings for retirement should be a shared effort between both partners, which helps to protect against uncertainties. Another huge problem is that couples are not discussing how much they need to save for retirement. Ultimately, it is important for couples to plan for their future retirement together. 

See Arielle O’Shea, How Couples Are Sabotaging Their Retirement, Market Watch, November 23, 2016.

November 25, 2016 in Estate Planning - Generally | Permalink | Comments (0)

How to Prevent or Slow Alzheimer's

Exercise Currently, 5.4 million Americans have Alzheimer’s disease. This number will continue to grow as the baby boomers age. However, recent research suggests that Americans can do things to prevent or slow the onset of the disease. Exercise and diet are the two main things that can help prevent Alzheimer’s. More specifically, 2.5 hours of moderate exercise per week should do the trick with a variety of activities that promote healthy cognitive aging. Over the years, our society has become more and more sedentary, so it is a good idea to increase your movement whenever possible. These simple steps can help improve brain function as we age and prevent or slow the onset of Alzheimer’s.

See Kim Gerecke, These Simple Lifestyle Changes Can Prevent or Slow Alzheimer’s, Market Watch, November 23, 2016.

November 25, 2016 in Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Article on IRC Section 2801: Inheritance Tax

Inheritance tax2Stephen Liss & Marianne R. Kayan recently published an Article entitled, IRC Section 2801: What U.S. Estate Planners Need to Know, Trusts & Estates (Nov. 2016). Provided below is a summary of the Article:

The inheritance tax section of Internal Revenue Code Section 2801 will soon become effective, bringing with it unique and difficult challenges for advisors and taxpayers. While the U.S. estate and gift tax system impose obligations on the donor, the IRC Section 2801 inheritance tax requires the donee to prove a negative or pay a 40 percent inheritance tax. Specifically, whenever a U.S. domiciliary receives a gift, bequest or distribution from a foreign trust, the proposed regulations require the donee to determine whether tax is due under Section 2801. Unless an exception applies, it’s presumed that all gifts, bequests or trust distributions are subject to tax under Section 2801, unless the donee proves otherwise. Let’s review how U.S. domiciliaries may overcome that presumption and what domestic estate planners need to know to properly advise their U.S. domiciled clients.

November 25, 2016 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

After a Roommate Passes Away, Does the Estate Pay the Rent?

Lease estateIs a decedent’s estate liable for half the rent on an apartment lease after they die? Oftentimes, a landlord does not care how the rent payments are divided as long as the money reaches their hand. If the rent goes unpaid, the landlord has a right to sue either or both tenants named on the lease. However, upon moving in together, roommates often sign a “roommate agreement” that addresses how the rent and bills will be divided. These written agreements can bolster a claim against an estate for payment. Even without one of these agreements, it is still a good idea to file a claim against the estate for reimbursement. But, remember, the decedent’s secured creditors will get paid first, so it is important to understand any liabilities and the size of the estate before assuming you will be reimbursed.

See Ronda Kaysen, A Roommate Dies; Must His Estate Pay the Rent?, N.Y. Times, November 5, 2016.

November 25, 2016 in Estate Planning - Generally | Permalink | Comments (0)