Wills, Trusts & Estates Prof Blog

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

Friday, April 26, 2019

Prince's Sister Sharon Nelson Accuses Comerica Bank of Mismanaging Estate: 'He Is Not Resting in Peace'

PrinceOn of the six heirs of the late Prince, Sharon Nelson, claims that three years after the death of her half-brother almost nothing has been settled with his estate. She also states that the estate has had no many legal fees with the fighting between the heirs and Comerica Bank & Trust, the administrator of the artist's estate after he passed away intestate, that it is nearly bankrupt.

Nelson, who says she lives off her Social Security and pension, adds that the legal costs connected to the estate battle have become so enormous that her only option is to prepare her own motions and filings and to represent herself in court. She said that the other heirs were to dependent on Prince while he was alive, but that she worked her entire life and knew how to provide for herself. Each heir received a contractual $100,000 after a tribute concert, but have yet to have any other distribution or payment from his estate. But Comerica Bank & Trust continues to be paid $125,000 per month for the administration fees and other costs that Nelson and the other siblings believe are reckless.

The more than 2,711 court filings -- motions, affidavits, memos, depositions, schedules -- in Prince’s probate case are evidence of the complexity of administering an intestate estate. The Internal Revenue Service has also stated that no heir can receive a distribution from the musician's estate until an estimated $31 million tax bill is paid. 

A hearing on several matters has been set for May 20.

See Claudia Rosenbaum, Prince's Sister Sharon Nelson Accuses Comerica Bank of Mismanaging Estate: 'He Is Not Resting in Peace', Billboard, April 24, 2019.

April 26, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Income Tax, Intestate Succession, New Cases | Permalink | Comments (0)

Parkland, Florida Shooter Could Inherit $432,000; Public Defenders Ask to Withdraw

CruzThe public defenders for the Parkland, Florida shooter suspect, Nikolas Cruz, have asked to withdraw from his defense as their client stands to inherit over $400,000 from his mother's life insurance policy. Lynda Cruz passes away from pneumonia in November 2017, just a few months before the shooting. State law disallows public defenders from working for defendants that can afford their own attorney.

The public defenders disclosed the possibility that Cruz would receive an insurance payout last year, but said at the time that it would likely amount to about $30,000. In the new filing, the defendants said neither they nor Cruz were aware the actual amount would be higher.

Because some of the victim's families have sued Cruz in civil court, a judge could rule that he would not receive the insurance policy pay out and instead have it awarded to them.

See Thomas Barrabi, Parkland, Florida Shooter Could Inherit $432,000; Public Defenders Ask to Withdraw, Fox Business, April 25, 2019.


April 26, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Thursday, April 25, 2019

CLE on Probate: Tax Return Deadlines, Preparation, Coordination and Filing

CLEThe National Business is holding a webinar entitled, Probate: Tax Return Deadlines, Preparation, Coordination and Filing, on Wednesday, May 8, at 12:00 to 3:15 PM Central. Provided below is a description of the event. 

Program Description

Walk Through the Key Tax Steps of Probate

Final tax returns are an indelible part of the probate process. If done incorrectly, they can cause undue burden on the estate and beneficiaries, keep the estate opened for years to come, and get the executors and attorney in trouble with the IRS. This essential tax guide will give you the fundamental knowledge to ensure all deadlines are met and no planning opportunities are missed. Register today!

  • Clarify the timeline of the estate and tax form procedures.
  • Learn how to use disclaimers and valuation discounts.
  • Make use of all crucial income tax planning opportunities.

Who Should Attend

This tax legal course is designed for attorneys. It will also benefit accountants and CPAs, tax professionals, estate planners, trust officers, and paralegals.

Course Content

  • Final Tax Returns Timeline, Forms and Filing Procedure
  • Estate Accounting and How it Affects Tax Returns
  • Income Tax Considerations in Probate
  • Estate, Gift, GST Tax Liability and Returns
  • Coordinating with Decedent's Accounting or Investment Advisors
  • Common Property Tax Issues

April 25, 2019 in Conferences & CLE, Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Article on Conversation About Care: The Law and Practice of Health Care Consent for People Living with Dementia in British Columbia

AlzCanadian Centre for Elder Law recently published an Article entitled, Conversation About Care: The Law and Practice of Health Care Consent for People Living with Dementia in British Columbia, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

While health care consent law applies to everyone, the issue raises particular challenges in relation to people living with dementia — not only because dementia can impact mental capacity, but also because people living with dementia confront assumptions that they are mentally incapable of making their own health care decisions, regardless of their actual abilities. Most forms of dementia are more prevalent among older people, and our population in British Columbia is aging. As a result, health care consent for people living with dementia will become an increasingly important legal and health policy issue.

This project on health care consent was developed by the Canadian Centre for Elder Law (CCEL), in collaboration with the Alzheimer Society of BC, to explore the law, policy, and practice with respect to health care consent for people living with dementia in BC. Conversations about Care examines law and practice in concert both to ensure legislation reflects the realities of practice, and to consider whether the barriers to good practice are a problem related to the substance of legislation, its implementation, or a combination of both. The goal is to ensure our legal framework in relation to informed consent is sufficiently robust to protect the rights of people living with dementia and their legal substitute and supportive decision makers for health care, and to enhance and clarify the law where needed.

The report, which reflects over two years of research and consultation, contains 34 recommendations that address law reform, access to justice and legal aid, public and health care professional legal education, and systemic barriers to informed consent, such as physician-billing and access to language interpretation. The recommendations were developed with a 15-person inter-disciplinary advisory committee after consulting with people living with dementia, family caregivers, health care professionals, and other key stakeholders from across BC.

April 25, 2019 in Articles, Current Affairs, Disability Planning - Health Care, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Hot Tech Solutions to Keep Older Adults Safe From Financial Abuse

ElderlawThe estimates of elder financial abuse losses very depending on the source, but they range from $3 to $40 billion per year. The National Adult Protective Services Association estimates that 90% of abusers are family members or trusted others. Sadly, the Association also reports that only 1 in 44 cases of financial abuse are reported to the authorities, and that 1 in 10 cases are so devastating that the victim must turn to Medicaid because their savings were annihilated.

A company called SilverBills is attempting to keep vulnerable older adults safe from financial abuse with an application assisting in paying their bills. The founder was a practicing attorney, Marci Lobel-Esrig, that witnessed first-hand the large number of elders that were taken of advantage of, especially by the Bernie Madoff scandal. The app is concierge bill pay service with a subscription model in which, after signing a contract, an older person’s bills are managed by the company. They currently have a partnership with the New York Department for the Aging, which allows them to offer their service free to those who qualify.

Another company assisting older citizens in EverSafe, which monitors bank accounts, savings and investment accounts, credit cards and credit information. It also works on a subscription basis and offers a free trial.After establishing a baseline from historical financial behavior, they can identify erratic activity, anomalies like unusual withdrawals, missing deposits, and changes in spending patterns. A third company entering this protection sphere is TrueLink, which offers prepaid Visas that can be partnered with trusted family members or even attorneys, guardians, fiduciaries, care managers, home care providers, and daily money managers.

See Sara Zeff Geber, Hot Tech Solutions to Keep Older Adults Safe From Financial Abuse, Forbes, April 23, 2019.

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

April 25, 2019 in Current Affairs, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Technology | Permalink | Comments (0)

Wednesday, April 24, 2019

How Pro Athletes Can End Up Losing Their Wealth

MiketysonThe news is littered with professional sports stars earning millions and millions of dollars on contracts and endorsements and then for everything to come crushing back down on them. Once their personal fortunes are exhausted it is nearly impossible to recuperate what they once had, or even to be back on sturdy ground.

The reasons these superstars' wealth goes up in smoke can be devolved into three reasons: overspending, unsound financial advice, and a mixture of both. Overspending is not usually the sole reason that these athletes lose so much money, but it is definitely an attributing factor. Bad or deceptive financial advice can easily be determined to be the overwhelming reason why the fortunes are lost, and sometimes the flimsy advice is unintentional. But as Evan Jehle, partner in FFO Business Management & Family Office explains, “There are also quite a few professionals who exploit the naiveté and unsophistication of successful athletes. In these scenarios, the advice that has been given was done to benefit the advisor rather than the athlete.” Astronomically high life insurance policies with premiums that provide substantial commissions to advisors is one example.

Unbridled expenditures in combination with unsound financial advice can eat away at a professional athlete's fortunes, and in many cases, completely eradicate them.

See Russ Alan Prince, Russ Prince: How Pro Athletes Can End Up Losing Their Wealth, Financial Advisor, April 10, 2019.

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

April 24, 2019 in Current Events, Estate Planning - Generally, Malpractice, Professional Responsibility, Sports | Permalink | Comments (0)

CLE on Special Needs Trusts: New Rules

CLEThe National Business Institute is holding a webinar entitled, Special Needs Trusts: New Rules, on Tuesday, April 30, 2019, at 12:00 PM - 3:15 PM Central. Provided below is a description of the event.

Program Description

Help Your Clients Weigh ALL Their Disability Savings Options

The recent ABLE Act and proposed federal legislation on improving special needs trusts have changed financial planning for disabled clients, with new options potentially offering clients better outcomes with less complexity. Can you determine how ABLE accounts stack up against SNTs and when to use them? Do you have the latest information on benefits eligibility and how it interplays with financial planning for disability? This timely legal course will give you the skills and knowledge to pick the right tool for your clients and execute it impeccably. Register today!

  • Get an incisive update on the recent and upcoming laws and rules governing disability planning.
  • Plan ahead, know what counts as a qualified expense in ABLE vs. SNT accounts.
  • Get answers to questions regarding Medicaid estate recovery rights and remedies.

Who Should Attend
This timely guide to SNTs is designed for attorneys. It will also benefit accountants, trust officers, financial planners, and paralegals.

Course Content

  • Special Needs Trusts Legislative and Regulatory Update
  • ABLE Act Special Needs Savings Accounts in a Nutshell
  • Special Needs Trusts (SNTs) Construction
  • Preserving Benefits Eligibility and Accounting for Medicaid Estate Recovery Rights

April 24, 2019 in Conferences & CLE, Current Events, Disability Planning - Health Care, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Article on South Dakota v. Wayfair: Way Unfair?

WayfairJosey Ventulan recently published an Article entitled, South Dakota v. Wayfair: Way Unfair?, Tax Law: Tax Law & Policy eJournal (2019). Provided below is an abstract of the Article.

Has a $5.00 shipping fee ever made you second guess an online purchase? What about a sales tax? Apparently, our Supreme Court Justices pay no mind to the latter. South Dakota v. Wayfair annihilates the concept of tax-free online shopping and allows the states to compel online companies meeting certain arbitrary thresholds to collect and disburse sales tax from online consumers. Consequently, retailers must now devise complex collection schemes to accommodate even more complex collection requirements.

This Article examines the historical context resulting in the formulation, and recent abrogation of, the physical-presence rule formerly shielding companies from the onerous, varied sales-tax regimes of the many states and the inconsistencies created by the rule’s absence. The author contends that Wayfair’s holding is an affront to the Commerce Clause and the doctrine of stare decisis. Moreover, the entire matter should have been deferred to Congress for review, in lieu of capricious judicial legislation. The author asserts that this decision is weak, at best, is contradictory to its alleged purpose, and is offensive to the concept of judicial precedent. The author concludes that our legislators are better equipped to research and solve this issue.

April 24, 2019 in Articles, Current Affairs, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

The Rise of Gray Divorce and Disinheritance

GraydivorceThe past 25 years has seen a dramatic rise in the amount of divorces for those over the age of 50 and even 65. For the 50 and up group, divorce doubled; 65 and up saw the divorce rate triple. Many of them remarry, and this can cause dire consequences for their adult children.

When it comes to a second or third marriage, family dynamics may be split along bloodlines. When one spouse dies before the other, the entire estate may transfer to the other spouse, leaving the children of the first spouse out of luck because their step-parent may not be obligated to leave them anything.

Here are some steps that can protected an heirs inheritance when there is a gray divorce and subsequent marriage.

  • Negotiate a prenuptial agreements with the new spouse. This may take some sensitivity, but it will protected all members of the blended family.
  • Prior to the gray divorce, establish a life insurance policy with the children as beneficiaries and for it to be held in trust by a third party.
  • Sign a post-nuptial agreement if a prenup was not performed so that both parties' estate plans provide for either's spouse as well as their own children.
  • Purchase long-term care insurance so that the inevitable costs of aging do not deplete either spouse's estate.
  • Gifts during a spouse's lifetime or a fully discretionary trust that permits distributions to be sprinkled among a child and grandchildren would keep the assets out of the reach of creditors, including a divorced spouse of a child..
  • An estate plan that includes a marital trust that provides for the subsequent spouse during their life, and then at their death, distributes the assets to the children, step-children, and grandchildren in accordance with the terms of the trust.

See Nancy S. Hearne, The Rise of Gray Divorce and Disinheritance, Saul.com, April 2019.

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

April 24, 2019 in Current Affairs, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, Gift Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Tuesday, April 23, 2019

Fiduciary Self-Dealing

GavelscaleA fundamental duty of being a fiduciary is the duty of loyalty. In essence, this entails that the fiduciary must act solely in the interest of the beneficiaries. Breaching the duty of loyalty occurs when the fiduciary engages in self-dealing, or places their own interests above that of their charges.

In New York, the trusts and estates practice has had cases that relied on the "no further inquiry" rule, which will result in the transaction being set aside regardless of its fairness. The rule was established by long-standing precedent (1955) as the basis for declaring any such transaction voidable at the behest of the beneficiaries. This rule was recently examined in Albany County in Matter of Smith on May 17, 2018.

In that case, when the decedent died in May of 2003, he owned 90% interest in a closely held business  and the respondent owned the remaining 10%. 70% was to be placed in trust with a few of the beneficiaries being minors, and 15% bequeathed to the respondent, who was also to act as trustee. Thus, the guardian ad litem for the minor beneficiaries claimed that when there were significant real estate sales from October 2003 to May 2004, with the respondent acting as the Secretary of the business and being paid a hefty compensation, that it was an act of self-dealing. The court agreed, and set aside the payments, and directed the respondent to restore the sum that he received from the estate.

The opinion provides a sharp lesson to be learned by fiduciaries who are tempted to benefit themselves at the expense of the estate or trust to which they owe undivided loyalty.

See Ilene Cooper, Fiduciary Self-Dealing, NYE State Litigation Blog, April 17, 2019.

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

April 23, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Malpractice, New Cases, Trusts, Wills | Permalink | Comments (0)