Wills, Trusts & Estates Prof Blog

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

Tuesday, August 27, 2019

US Throwing Away 3,500 Donated Kidneys Every Year

Kidney93,000 people are currently on the United States transplant list desperately waiting for a kidney and 5,000 people - approximately 12 a day - die without ever getting one. However, at least 3,500 donated kidneys are disposed of every year, according to a study published in the journal JAMA Internal Medicine on Monday.

Between 2004 and 2014, 156,089 kidneys were donated from deceased donors, but only 128,102 were transplanted. This means that in 10 years 27,987 kidneys (more than 17% of those donated) were discarded. And this number continued to increase, according to the researchers: in 2016, 3,621 kidneys (about 20%) were discarded. This could be contributed to the fact that American doctors are less willing than doctors of other countries to use kidneys from older patients or from those that had hypertension or diabetes.

A reason for this hesitation by doctors is "intense regulatory scrutiny of US transplant programs, which may lose credentials if their one-year death and graft failure outcomes exceed predicted outcomes." So if the donated organ is not in pristine condition, transplant centers may not want to risk their credentials. Many of the discarded kidneys are in fact unusable, such as those in bad shape or had a negative biopsy. But a study by the National Kidney Foundation in 2016 found that as many as 50% of discarded deemed unfit could have in fact been transplanted.

Patients with kidney disease currently cost the government $114 billion each year, and Secretary of Health and Human Services Alex Azar stated, "That is one-fifth the spending of all Medicare dollars."

See Jen Christensen, The US is Throwing Away at Least 3,500 Donated Kidneys Every Year, Study Finds, CNN, August 26, 2019.

August 27, 2019 in Estate Planning - Generally, Science | Permalink | Comments (0)

Executors of Leona Helmsley’s Estate to Get $100 Million Payday

LeonaManhattan Surrogate's Court Judge Nora Anderson has awarded four executors of Leona Helmsley's estate a total of $100 million in fees. The judge acknowledged that amount is "an enormous sum," but the ruling also noted that the complexity of the $5 billion estate qualified the payment. Mrs. Helmsley inherited the majority of her estate when her real estate tycoon husband, Harry Helmsley, passed away in 1997.

The case has been before Judge Anderson since early 2016, when the office of the Attorney General - which at that time was Eric Schneiderman - challenged the executors’ request, claiming it was “astronomical” and suggested that it be cut by as much as 90%. Their records showed that the executors spent 15,535 hours on estate matters, making their request for $100 million equivalent to an “exorbitant, unreasonable and improper” rate of $6,347 an hour. Judge Anderson agreed with the executors that an hourly rate cannot “accurately reflect the many varied services executors perform.” The current Attorney General, Letitia James, declined to comment.

The four executors set to each received $25 million in fees are two grandchildren of Mrs. Helmsley, David Panzirer and Walter Panzirer; a lawyer, Sandor Frankel; and friend and business advisor John Codey. Mr. Codey died in 2016 and his estate has been representing his interest.

Mrs. Helmsley left the majority of her fortune to a charity, the Leona M. and Harry B. Helmsley Charitable Trust. Her will also included $10 million each for her grandchildren and $12 million for her dog, Trouble, which was later reduced to $2 million. The trust will bear the expense of the attorney fees, but Judge Anderson noted that Messrs. Panzirer and Frankel are also the executors of the trust, and therefore are not independent.

See Peter Grant, Executors of Leona Helmsley’s Estate to Get $100 Million Payday, Wall Street Journal, August 27, 2019.

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

August 27, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0)

Monday, August 26, 2019

Article on Freedom of Disposition v. Duty of Support: What's a Child Worth?

ChildstickfigurePhyllis C. Taite recently published an Article entitled, Freedom of Disposition v. Duty of Support: What's a Child Worth?, 2019 Wis. L. Rev., 325-348 (2019). Provided below is an introduction of the Article.

Mandating financial responsibility for the care of children during one's lifetime is without question. Child support laws have been implemented in every state in America based on the inherent duty to financially support dependent children. Some laws even extend that duty to provide financial support to children over the age of eighteen when the child has a disability or pursues higher education.

Just as entrenched is the right of a decedent to dispose of his property as he pleases, known as freedom of disposition. Every state has intestacy provisions that provide for disposition of property after a decedent's death, trumped by specific wishes of the decedent in the form of a Last Will and Testament or any other testamentary document. When these two principles clash, which public policy principle should prevail, freedom of disposition or duty to financially support children?

The duty to support children should be paramount in any just legal system, especially after death when a source of financial support is no longer available. As such, testamentary freedoms should be subordinate to the duty to financially support children. In order to ensure financial protection of children, forced shares should be implemented to provide financial provisions to minor children in testate estates. Additionally, an elective share system should be adopted to provide minimum financial support to adult children, based on age, in testate estates.

This Article explores historical justifications for favoring freedom of disposition and also provides a comparative analysis of how other countries deal with the duty to support families, specifically children, after death. The selected civil jurisdictions for the focus of this Article are Spain, Louisiana and British Columbia. The selected jurisdictions under common law systems are New Zealand, Canada and the United Kingdom.

Part I provides relevant historical information about the civil and common law systems. Part II focuses on the requirement that parents provide financial support to their minor children during their lifetimes. Part III concentrates on the financial responsibilities of decedents after death to their surviving children. Part IV discusses the history and justifications of financial responsibility of decedents to surviving spouses. Part V proposes ways to balance freedom of disposition with the duty of support and the conclusion follows.

August 26, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation, Trusts, Wills | Permalink | Comments (0)

Michael Jackson’s Former Manager Says King of Pop’s Will is Missing, Wants Trump’s Help Finding it

MjMichael Jackson's former spokesperson and manager, Raymone Bain, revealed at a press conference last week that she does not know where the singer's will is placed. “I have wished, I have hoped and I have prayed that Michael Jackson’s will — dated Oct. 6, 2006 — would be found, revealed, discovered, dropped from the sky. Because in it, he painstakingly outlined how he wanted his legacy to be preserved and maintained," she claims.

Bain also claimed that President Trump was a close and dear friend of the King of Pop, and expressed hope that he would assist in finding the will. However, representative's from Jackson's estate said that Bain was “not authorized to act on behalf of the Michael Jackson Estate nor to use Michael Jackson’s name in any way for charitable or her own commercial purposes."

The press conference was called to present the MJ Legacy Foundation, which was created to “preserve, protect and defend his name while supporting the numerous organizations he supported during his life.”

See David Matthews, Michael Jackson’s Former Manager Says King of Pop’s Will is Missing, Wants Trump’s Help Finding it, NY Daily News, August 22, 2019.

August 26, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Film | Permalink | Comments (0)

Sunday, August 25, 2019

Article on Disrupting the Wealth Gap Cycles: An Empirical Study of Testacy and Wealth

MoneyDanaya C. Wright recently published an Article entitled, Disrupting the Wealth Gap Cycles: An Empirical Study of Testacy and Wealth, 2019 Wis. L. Rev. 295-323 (2019). Provided below is an introduction of the Article.

When many of us think about the wealthy, we assume that they have inherited wealth, trust funds, or at least a history of knowing the right people. There are always a few stories of the hard-working immigrants who pulled themselves up by their bootstraps, as well as the spendthrift scions of wealthy families who manage to squander vast riches in a remarkably short period of time. But we rarely hear about the vast numbers of modest and obscure families that grow wealth carefully from generation to generation, keeping their wealth and their family skeletons away from the spotlight. How those families grow and maintain their wealth is through judicious use of tax mechanisms to minimize income and estate taxes, judicious use of trusts to reduce squandering wealth by irresponsible children and grandchildren, and through estate plans that channel property to those who will protect it, use it wisely, and pass it on in ways that maintain the wealth.

In early-modern England, estate planning was usually done earlier than we do it today, when children were young enough to be influenced and when parents had a good sense of their children's personalities. It was done when the patriarch had sons about to marry and he could convince them to accept limitations on family property in exchange for access to income immediately to allow him to start a family. When the son's children came of marrying age, the hope was that he would have imbibed the spirit of protecting the family property and would willingly accept continued constraints, impose them on his children and, if everyone played along, the family dynasty would be protected through a strict settlement renegotiated at each generation. The use of trusts and conservative trustees was crucial to keep wayward family members in line by denying them access to income if they bucked the system.

For those in Jane Austen's day, estate planning came at mid-life, when new families were being formed. In our day, estate planning comes at the end of life, as each generation usually hangs on to property, especially earned wealth, perhaps to lord it over neglectful children, but more often because the best way to deal with the uncertainty of the future is to retain control as long as possible. But hanging on to property until the end puts the owner at risk that he will die without making appropriate plans and his estate will be dissipated through family squabbles, probate delays and expenses, and that dreaded of all wealth-destructors: the estate tax.

The common denominator for most people who want to grow and protect wealth has been capable estate planning, planning that provides adequate resources for the current generation, protects the principal for the future, and provides flexibility so that each generation gets what it needs without constraining the property too severely. The trust is the most common mechanism for preserving wealth, but it is not the only mechanism. Life estates, pre-nuptial contracts, powers of appointment, and joint tenancies have provided ways to protect assets while providing for basic needs of future generations. More recently, living and asset-protection trusts, beneficiary designations, and TOD real-estate deeds have made estate planning even easier for the wealthy and the not-so-wealthy alike.

This panoply of estate planning options, however, seems to have passed by many who could really benefit from it. The person of modest wealth who dies without any estate planning risks having her property be dissipated to pay for guardianships, probate, and shares for heirs, regardless of their need or ability to manage property. Those who die young, before they have amassed much wealth, and those who die without proper estate planning will often leave little for their dependents, heirs who themselves will suffer from lack of investment in human capital by their parents and grandparents, thus leaving them less likely to earn significant wealth and less likely to have sufficient wealth to pass on to the next generation. The cycle of wealth-building by those who already have wealth is enhanced by probate and tax laws, while the cycle of wealth-destruction is perpetuated by administration costs, onerous legal requirements, and everyday inequalities. While many structural factors may contribute to the dissipation of wealth by some and the accumulation of wealth by others, one factor that seems to correlate closely to the various wealth gaps is dying intestate and having one's property pass by the default statutory rules of intestate succession, and dying testate and having one's property pass according to the wealth-saving mechanisms and procedures of planned wills and will-substitutes.

In an empirical study of all decedents dying in 2013 in Alachua County, Florida whose estates were probated, either testate or intestate, the data show striking correlations between intestacy and lower wealth, and testacy and greater wealth. And the demographics of those who died intestate correspond to the demographics of those people at risk of falling into the cycle of wealth-dissipation. To explore the possible effects of intestacy and testacy on wealth and property succession, I analyzed 408 estates (293 testate and 115 intestate) across a variety of categories, including wealth, age, race, sex, and marital status. All of these lines of inquiry support the claims by many economists that wealth gaps between men and women, white and black, or married and unmarried couples are growing and should be of great concern to lawmakers. This study supports those claims and ends by calling for more focus on how to bring estate planning services to the populations most vulnerable to dying intestate.

August 25, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Intestate Succession, Trusts, Wills | Permalink | Comments (0)

Texas Court Concludes There was a Fact Question as to Whether A Hand-Written Document was a Will

WillThe decedent handwrote and signed a document which provided, “Karen Grenrood is my executor, administrator, [and] has all legal rights to my estate in the case of my untimely or timely death.” The contestants claimed that this document lacked testamentary intent and thus is not a will which is admissible to probate. The trial court agreed.

The appellate court reversed. Consistent with the Texas Supreme Court case of Boyles v. Gresham, 263 S.W.2d 935 (1954), the court held that a document which appoints an executor can be a will even if it does not make an effective disposition of the testator’s property. The court also quoted Estates Code § 22.034(2)(A) which defines the term “will” as including an instrument which merely appoints an executor. In addition, the court held that the decedent’s document is ambiguous and could actually dispose of the entire estate to Karen by stating that she has “all legal rights” to his estate. [The court did not, however, order the document admitted to probate because the contestants also alleged undue influence, an issue the trial court had yet to resolve.]

See David Fowler Johnson, Texas Court Concludes There was a Fact Question as to Whether A Hand-Written Document was a Will, Texas Fiduciary Litigator, August 17, 2019.

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

August 25, 2019 in Current Affairs, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Saturday, August 24, 2019

Aretha Franklin Died with $1 Million in Uncashed Checks

ArethaAn inventory of Aretha Franklin's assets found almost $1 million in uncashed checked among her possessions.

Among the checks was a single one of $702,711.90 from Sound Exchange and the Screen Writers Guild and $285,944.27 in checks from her publishing company, Springtime Publishing, EMI, BMI, Carlin Music and Feel Good Films. The grand total was $988,656.17.

See Singer Died with $1 Million in Uncashed Checks, CNN, August 23, 2019, see also Brie Stimson, Aretha Franklin had Nearly $1M in Uncashed Checks When She Died 1 Year Ago, Fox News, August 24, 2019; see also Karu F. Daniels, Queen of Soul Aretha Franklin Died With $1 Million in Uncashed Checks, August 22, 2019.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas), Adam J. Hirsch (Professor of Law at the University of San Diego School of Law), and Joel C. Dobris (Professor of Law, UC Davis School of Law for bringing these articles to my attention.

August 24, 2019 in Estate Administration, Estate Planning - Generally, Music | Permalink | Comments (0)

Friday, August 23, 2019

David Koch, Billionaire Who Fueled Right-Wing Movement, Dies at 79

KochDavid H. Koch, the billionaire that helped reshape American politics with a particular brand of libertarianism, has died at the age of 79 at him home in Manhattan. His death was announced by his younger brother and business partner Charles Koch, which noted that David Koch had been treated for prostate cancer in 27 years ago.

Koch was one of the word's richest men, with assets of $42.2 billion in 2019 and a 42% stake in the global family enterprise, Koch Industries. He was a known philanthropist with more than $1.2 billion in charitable gifts and the Libertarian Party’s candidate for vice president in 1980. David and Charles also helped give rise to the Tea Party movement and strengthened the far-right wing of a resurgent Republican Party, though he claimed to have never attended a Tea Party event. The Koch brothers also had personal and political differences with President Donald Trump, primarily restrictive trade and immigration policies as divisive. Charles threatened to withhold the family’s support for Republican candidates who opposed the free-trade, government-shrinking policies at the heart of the Koch political philosophy.

David had palatial homes on Park Avenue in Manhattan and in Southampton, N.Y., Aspen, Colorado, and Palm Beach, Florida. He also kept a yacht in the Mediterranean for summer getaways and rented it out for an astounding $500,000 a week. His friends and acquaintances included Bill and Melinda Gates, Prince Charles and Winston Churchill’s grandson Winston Spencer Churchill.

In his earlier days, his grandiose 6'5" height helped him earn the Massachusetts Institute of Technology's basketball team's single-game scoring record of 41 points. David Hamilton Koch was born in Wichita, Kansas on May 3, 1940, the third of four sons of Fred Chase Koch and the former Mary Clementine Robinson. His brothers are Frederick, seven years older; Charles, five years older, and David’s twin, William. His father died in 1967 and his sons inherited significant stakes in the oil company he had created.

See Robert D. McFadden, David Koch, Billionaire Who Fueled Right-Wing Movement, Dies at 79, New York Times, August 23, 2019.

August 23, 2019 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

What Jeffrey Epstein’s Last-Minute Will Means for Accusers Trying to Recover Money From His Estate

EpsteinThe death of Jeffrey Epstein, millionaire financier indicted on federal sex trafficking charges, stunned the country, especially after he had previously attempted suicide and had been in a special holding cell. But what raised more questions was the discovery that only two days prior to his demise, he had written a will leaving his entire estate - all $577 million of it - to a private pour-over trust. This development could mean that claims against the estate from lawsuits of sexual assault victims will take longer and be much more complex.

“It could take many, many years before anybody gets a penny of this, and it all depends, too, on how much the executors want to fight it,” says Gerry Beyer, a law professor at Texas Tech University and an expert in estate planning, wills and trusts. “The number of unanswered questions is beyond phenomenal.”

Two longtime employees of Epstein were named as executors, Darren Indyke and Richard Kahn. The alternative executor is a biotech venture capitalist, Boris Nikolic, who said he was "shocked" to have been named and will forgo the responsibility if he should be called on. The executors will pursue any claims against the estate and ensure that the remaining assets are received by the trust beneficiary, which were not named in the will.

Bridget Crawford, a professor at Pace Law School teaching wills, trusts, and estates, said that, “The bottom line is a probate court in the Virgin Islands isn’t going to allow a dime to go out of that estate—to you, to me, to the trust—until the claims are settled, so this thing is going to be tied up for years. We may never know who the beneficiaries of that trust are, but it doesn’t matter from the perspective of the civil claimants.”

See Katie Reilly, What Jeffrey Epstein’s Last-Minute Will Means for Accusers Trying to Recover Money From His Estate, August 20, 2019.

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

Thursday, August 22, 2019

10 Most Expensive US States to Die in

BeachNew research compiled by the personal-finance website GOBankingRates, the National Funeral Directors Association and the National Bureau of Economic Research configured a list of the 10 most expensive states to die in after figuring the median out-of-pocket funeral costs and median end-of-life medical care in each of them and Washington, D.C. It is not surprising that the two of the most expensive states to live in - California and New York - also made this list.

The top 10 states that will cost more to die in are, from least to most:

  • Rhode Island
    • Average funeral expenses: $9,269
    • Average end-of-life medical costs: $16,398
  • New Jersey
    • Average funeral expenses: $9,712
    • Average end-of-life medical costs: $17,181
  • Connecticut
    • Average funeral expenses: $9,914
    • Average end-of-life medical costs: $17,538
  • Maryland
    • Average funeral expenses: $10,069
    • Average end-of-life medical costs: $17,812
  • Alaska
    • Average funeral expenses: $10,084
    • Average end-of-life medical costs: $17,840
  • Massachusetts
    • Average funeral expenses: $10,216
    • Average end-of-life medical costs: $18,073
  • Oregon
    • Average funeral expenses: $10,418
    • Average end-of-life medical costs: $18,430
  • New York
    • Average funeral expenses: $10,799
    • Average end-of-life medical costs: $19,103
  • California
    • Average funeral expenses: $11,777
    • Average end-of-life medical costs: $20,834
  • Hawaii
    • Average funeral expenses: $14,975
    • Average end-of-life medical costs: $26,492

See here for a slideshow of the full results from the study by GoBankingRates.

See Shawn M. Carter, 10 Most Expensive US States to Die in, Fox News, August 20, 2019.

August 22, 2019 in Current Affairs, Death Event Planning, Elder Law, Estate Planning - Generally | Permalink | Comments (0)