Wills, Trusts & Estates Prof Blog

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

Wednesday, September 18, 2019

Illinois Enacts New Trust Code: What Fiduciaries Need to Know

IllinoisFiduciaries and estate planners in Illinois need to be made aware that starting January 1, 2020, the new Illinois Trust Code (ITC) will replace the Illinois Trusts and Trustees Act, ushering in several changes of note.

Before the ITC, all trustees had to account directly to all current income beneficiaries not under a legal disability. Now, settlor's can create so-called "silent trusts," in which a settlor may opt to (1) waive the trustee’s duty to account or provide information about the trust to beneficiaries under age 30, and (2) nominate “designated representative,” a fiduciary to whom the trustee must account and provide required trust information on behalf of the represented beneficiary during the trust’s silent period. The silent period must end once the represented beneficiary turns 30.

The ITC also creates two different trust accounting standards, with he key difference between the rules applicable to pre-ITC trusts and trustees and post-ITC trusts and trustees is that the ITC will give effect to a settlor’s waiver of the duty to provide annual accountings in a pre-ITC trust instrument.

The new Code will also make it easier for a trustee to delegate discretionary powers and it shortens limitations periods for claims against trustees in certain instances. There will now be a rebuttable presumption that any exculpatory clause in a trust instrument will be invalid if the trustee drafted the document or otherwise procured the inclusion of the exculpatory provision.

See Peter B. Allport, Nicole K. Mann, Jared R. Cloud, & Margaret Elizabeth Sanne Illinois Enacts New Trust Code: What Fiduciaries Need to Know, MWE.com, September 16, 2019.

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

September 18, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Larry King’s Estranged Wife Shawn King Breaks Silence on Divorce

LarrykingLast month, 85-year-old host Larry King filed for divorce from his 59-year-old wife, Shawn King, after 22 years of marriage. This is not the first time that papers have been filed in court to dissolve the marriage; in 2010 they called it quits, but months later they announced their reconciliation.

But now, Shawn King has opened up about the pending divorce. “It’s not fun. It hurts. Yeah, it hurts." The couple are parents of two boys, 20-year-old son Chance and 19-year-old Cannon. Both men have commented on social media showing their support and love for both Shawn and Larry. Chance said, "Despite what is being reported, let me set the record straight My mother never tried to steal my inheritance or my brothers. I want what any son wants for his family; health, happiness and peace.”

Larry also has three other children and has been married eight time to seven different women: to Freda Miller from 1952 to 1953, Annette Kaye in 1961, Alene Akins from 1961 to 1963, Mickey Sutphin from 1963 to 1967, Akins again from 1967 to 1972, Sharon Lepore from 1976 to 1983, Julie Alexander from 1989 to 1992, and married Shawn in 1997.

See Sarah Hearon, Larry King’s Estranged Wife Shawn King Breaks Silence on Divorce: ‘It Hurts,' US Weekly, September 17, 2019.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.

September 18, 2019 in Current Affairs, Estate Planning - Generally, Television | Permalink | Comments (0)

Article on The Social Afterlife

FbAndrew Gilden recently published an Article entitled, The Social Afterlife, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

Death is not what it used to be. With the rise of social media and advances in digital technology, postmortem decision-making increasingly involves difficult questions about the ongoing social presence of the deceased. Should a Twitter account keep tweeting? Should a YouTube singer keep singing? Should Tinder photos be swiped left for the very last time? The traditional touchstones of effective estate planning — reducing transaction costs and maximizing estate value — do little to guide this new social afterlife. Managing a person’s legacy has shifted away from questions of financial investment and asset management to questions of emotional and cultural stewardship. This Article brings together the diverse areas of law that shape a person’s legacy and develops a new framework for addressing the evolving challenges of legacy stewardship

This Article makes two main contributions. First, it identifies and critically examines the four models of stewardship that currently structure the laws of legacy: (1) the “freedom of disposition” model dominant in the laws of wills and trusts, (2) the “family inheritance” model dominant in copyright law, (3) the “public domain” model dominant in many states’ publicity rights laws, and (4) the “consumer contract” model dominant in over forty states’ new digital assets laws. Second, this Article develops a new stewardship model, which it calls the “decentered decedent.” The decentered decedent model recognizes that individuals occupy heterogenous social contexts, and it channels postmortem decision-making into each of those contexts. Unlike existing stewardship models, this new model does not try to centralize stewardship decisions in any one stakeholder — the family, the public, the market, or even the decedent themselves. Instead, the decentered decedent model distributes stewardship across the diverse, dispersed communities that we all leave behind.

September 18, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Technology | Permalink | Comments (0)

Dynasty Trusts: Best Way to Protect Family Wealth

RussiandollsAn irrevocable trust ensures a smooth, usually drama-free transfer of assets than a will, while also offering significant tax advantages, asset protection, privacy, and control. Dynasty trusts, which can last hundreds of years when they are allowed to do so, can provide the greatest benefit of all trusts.

Many states have laws against perpetuities, so it is important to take into account the location of the trust. Five states allow perpetual trusts, while six states allow trusts to last up to 360 years. If you are in a jurisdiction that is not one of these 11 states, a financial advisor well coursed in dynasty trusts can walk you through how to set one up in a state that does.

The estate tax is only assessed to dynasty trusts once, even though it can endure for several generations and increase in value exponentially. As a nice little bonus, trust assets are not subject to generation-skipping transfer tax (GSTT), which are notorious for complication bequests to grandchildren. Furthermore, a dynasty trust can expand a settlor's control over the trust assets for many generations, ensuring the family's legacy.

As with many trusts, a dynasty trust can also protect assets from creditors, including ex-spouses of family members. Because the assets are owned by the trust - not the beneficiaries - those assets cannot be included in jointly held estate. There is also increased privacy with trusts, keeping distribution of property out of the public eye, whether it be during a person's life or at the time of death.

See Harvey Bezozi, Dynasty Trusts: Best Way to Protect Family Wealth, News Max, September 16, 2019.

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

September 18, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Tuesday, September 17, 2019

CLE on Probate Process, Procedures and Documents: All the Forms and Checklists in One Place

CLEThe National Business Institute is holding a webcast entitled, Probate Process, Procedures and Documents: All the Forms and Checklists in One, on Tuesday, October 15, 2019 at 9:00 AM - 4:00 PM Central. Provided below is a description of the event.

Navigate Probate with Confidence

When the client is no longer there to make his or her voice heard, the task of interpreting his/her wishes to accurately settle the estate falls on your shoulders. Do you have all the tools you will need? This program will provide you with a comprehensive overview of the probate process, equipping you with the checklists, forms and documents you will need to guide your clients through each time-sensitive procedure. Learn what to do and when to do it, from the initial petition to the final accounting. Register today!

    • Don't miss a step - learn how to map out the entire probate process by utilizing a master checklist.
    • Examine the essential content of the initial petition and understand the procedure for filing it.
    • Receive practical tips on valuing and recording assets to be included in the estate inventory.
    • Handle creditor notices and responses.
    • Understand key provisions of trusts and their impact on the probate process.
    • Learn what must be included in the final accounting and review sample tax returns.

Who Should Attend

This program is designed for attorneys. It will also benefit accountants and CPAs, trust officers, and paralegals.

Course Content

    • Probate Process and Executor Duties: The Master Checklist with Deadlines
    • Wills: Key Provisions, Validity, Interpreting Unique Instructions
    • Initial Petition and Letters of Authority: Content and Procedure
    • Estate Inventory: Valuing and Recording Assets
    • Creditor Notices and Responses
    • Trusts: Key Provisions, Trustee Duties, and the Trust's Impact on Probate
    • Final Accounting: What Must and Should Be Included
    • TAX Returns and Schedules for the Estate and the Decedent: Forms, Deadlines, Exentions (With Sample Returns)
    • Estate Closing and Distributions: Notices of Proposed Action, Petition to Discharge the Fiduciary, and Other Key Documents
    • Ethical Practice Considerations and Concerns in Probate

September 17, 2019 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Non-Probate Assets, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

From Hobby to Investment: How to Plan for Collectibles in Your Estate

CollectiblecarCollectibles may start off as a hobby, then evolve into a passion that amasses quite the value. Here are a few tips to preserve your investment:

  • Avoid a Fire Sale: Don’t Let Taxes Catch Your Heirs by Surprise
    •  Talk with a estate planning professional to determine the best method of to reduce the tax burden of your collection, whether it be gifting during your life or at death.
  • Put It on Paper: What Do You Own, Where Is It, and How Much Is It Worth?
    •  It would be prudent to group authentication paperwork, records of purchases, and any information regarding the history of the item to establish its provenance (chain of ownership) altogether with your estate planning documents.
  • Have a Backup Plan: Who Will Protect Your Collection if You’re Not Able?
    • If you become incapacitated or otherwise unable to manage your own affairs, a power of attorney allows a designated person to act as your agent, ensuring your collection is handled according to your wishes
  • Share Your Passion: Does Your Family Know Why You Collect?
    •  Do not just pass along the collection itself - explain to your family why it is so important to you, why it is your passion.
  • Preserve Your Collection: Find an Executor Who Knows How to Maintain It
    •  Having an executor that understands the particulars of your collection is extremely important, especially since they may need to find experienced appraisers for the items.
  • Reduce Taxes: Leave Your Treasures in the Hands of a Deserving Charity
    • When loved ones simply do not share your enthusiasm for a collection, or it becomes impossible to divide it equitably, a better choice may be donating it to charity and leaving other assets to your heirs.
  • The Takeaway: To Preserve the Value of Your Collection, Think Ahead

See From Hobby to Investment: How to Plan for Collectibles in Your Estate, Fiduciary Trust, September 4, 2019.

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

September 17, 2019 in Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Wills | Permalink | Comments (0)

Monday, September 16, 2019

Call for Participation -- Trusts & Estates Collaborative Research Network of Law and Society Association

Here is the text of this CFP:

Trusts & Estates Collaborative Research Network of Law and Society Association
Trusts & Estates Collaborative Research Network
Law and Society Association Annual Meeting
Denver, Colorado, May 28-31, 2020

Call for Participation – Deadline September 20, 2019

Submission Link: https://form.jotform.com/91848913844167

The Trusts & Estates Collaborative Research invites proposals for (i) individual papers to be organized into panels; (ii) fully-formed panel proposals; and (iii) proposals for other sessions such as Author Meets Reader, Salon, or Roundtable discussions that explore any aspect of the law, practice or effects of trusts, equity, and estates, broadly defined. We also seek volunteers to serve as Chairs and/or Discussants for paper panels. Successful proposals likely will bear in some way on succession (also referred to as inheritance) and/or wealth transfers (whether at death or during lifetime, outright or in trust). Subjects of inquiry may involve any aspect of government or social policy with respect to trusts, estates, inheritance, wealth transfer, equity or courts with jurisdiction over these issues.

If you would like to present an individual paper as part of a Trusts and Estates CRN panel, submit an idea for a fully-formed panel, or propose an Author Meets Reader, Salon or Roundtable session, please  submit a 500-word abstract/description by Friday, September 20, 2019 at 5:00 p.m. GMT via this link: https://form.jotform.com/91848913844167.

The planning committee will then attempt to organize the papers into panels with cohesive themes, and to populate other sessions as appropriate. You are welcome to link your paper in some way to the 2020 conference theme, “Rule and Resistance,” but there is no requirement to do so.

Our goal is to stimulate focused discussion of papers on which scholars are currently working and to discuss topics of current and common interest to those working in the field of Trusts & Estates, broadly defined, both in the United States and internationally.  We welcome participation from scholars of any level of seniority working in any discipline, language, or country.  Although you may submit an individual proposal to present a paper that is closer to publication, we are especially interested in receiving proposals for works-in-progress that will benefit from discussion that the panels will provide.

This year, we expect to limit paper panels to four presenters.  We welcome participation of junior scholars, those who are untenured or in non-tenured positions, clinical and legal writing specialists, doctrinal teachers, advanced graduate students, as well as more experienced scholars. Scholars from around the world are warmly encouraged to apply; we welcome participation of colleagues from all nations.

Participants are encouraged to apply multi-disciplinary and interdisciplinary approaches in their scholarship. Possible areas of inquiry might include issues related to transfer of wealth between spouses or family members; preferences created for certain types of transfers or transfers to particular classes of individuals; the transfer of wealth to charities or non-profit organizations; generational equity; issues of social and economic inequality; comparative aspects of the law of succession and the law of trusts more broadly; the relationship between/among gender, race, sexual orientation, socioeconomic class, immigration, language status, disability and the law of succession and the law of trusts; the socio-linguistics of testation and wealth transfer; access to estate planning justice for low- and middle-income individuals; questions of cultural or group inheritance rights; and similar issues.

Please note that LSA rules limit you to participating only once, either as a paper panelist or as a roundtable participant.

We will give preference to proposed Trusts and Estates CRN panelists/participants who agree also to serve as a discussant or discussant/chair for another Trusts and Estates CRN panel (those appearances do not “count” for purposes of the 1-appearance rule). Please indicate your willingness to do so on the proposal form.  Your volunteering will help us to create and sustain a supportive global community of trusts, equity, and estates scholars. We will take into account expertise and topic preferences. Chairs organize the logistics of the panel, as well as moderate at the conference. Chairs will develop a 100-250 word description of the panel for inclusion in the Law and Society program. Discussants will read at least one assigned paper and prepare a short commentary to offer feedback and serve as a basis for discussion among the panelist and audience members. There may be multiple discussants for the same panel, especially if we are able to create panels that include multi-national perspectives.

500-word proposals to participate in a program sponsored by the Trusts and Estates CRN are due Friday, September 20, 2019 at 5:00 p.m. GMT via https://form.jotform.com/91848913844167.

The submission form will ask you to provide:

  • A 500 word abstract or summary of your paper/formed panel proposal/alternate session proposal;
  • The title of your individual paper/formed panel/alternate session
  • Your name and institutional affiliation;
  • Number of years you have been in teaching/working in the academy; and
  • A list of your areas of interest and expertise within Trusts & Estates/Equity Law.

Please note that for Author Meets Reader, Salon, or Roundtable sessions, organizers should provide a 500-word summary of the topic, the names of the proposed participants, and the contributions they expect the proposed participants to make.

Those selected by the Trusts and Estates CRN for participation in a panel or program will be informed no later than October 23, 2019.  Each participant will then need to register through the Law and Society system no later than November 6, 2019 using the panel number we assign. 

If you have any questions, you are welcome to contact any member of the CRN Planning Committee.

2020 LSA Trusts & Estates CRN Planning Committee
Bridget Crawford (chair), bcrawford@law.pace.edu
Diane Klein, dklein@laverne.edu
Carla Spivack, cspivack@okcu.edu
Allison Anna Tait, atait@richmond.edu

September 16, 2019 in Conferences & CLE | Permalink | Comments (0)

A Woman’s AncestryDNA Test Revealed a Medical Secret

CordbloodWhen Holly Becker was in her twenties, she was treated for non-Hodgkin’s lymphoma by undergoing an umbilical-cord-blood transplant. For ethical reasons, donations from infant umbilical-cord blood have been strictly anonymous for almost 30 years. But Becker, using the mail-in DNA test provided by AncestryDNA, discovered that the cells of the donor from two decades are still within her when her results exactly matched those of a young man in New York, and she was able to meet him.

After numerous rounds of chemo that ultimately failed, Becker was near death when her doctor suggested the then-novel procedure of transplanting cord blood from a stranger. Doctors would destroy Becker’s own cancerous cells before infusing her with hematopoietic stem cells - which are plentiful in cord blood - from a healthy matched donor. Those cells would eventually divide to replace all the blood in her, and Becker did not recover entirely from the grueling procedure for two years. But she stayed healthy, and she always wondered whose blood saved her life.

Becker was not trying to find the anonymous donor when she used the DNA kit. She was just curious about her family history. But she matched to her donor's mother, Dania Davey, as if she was indeed was Davey's daughter. They both thought it was mistake by the company. After some research and another patient of Becker's oncologist getting odd results from AncestryDNA, they discovered the truth. The DNA in saliva, it turns out, can come from white blood cells (which should have the donor’s DNA) that guard against bacteria in the mouth. In fact, many mail-in DNA test companies advice against patients that have undergone bone-marrow or cord-blood transplants against taking their tests, as the mix of genetic material can cause them to fail. Or, the test could pinpoint the donor's DNA.

To prove their hypothesis, Davey's 25-year-old son, Patrick, took a test. And he matched the original records for Becker’s anonymous donor, and Dania had in fact donated his cord blood when he was an infant. For more than two decades, Becker had carried Patrick's DNA inside of her.

See Sarah Zhang, A Woman’s AncestryDNA Test Revealed a Medical Secret, The Atlantic, September 13, 2019.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.

September 16, 2019 in Current Events, Estate Planning - Generally, Science, Technology | Permalink | Comments (0)

Article on A "Mere Expectancy?" What Rights do Beneficiaries of a Revocable Trust have Prior to the Death of the Settlor?

RevocabletrustRichard C. Ausness recently published an Article entitled, A "Mere Expectancy?" What Rights do Beneficiaries of a Revocable Trust have Prior to the Death of the Settlor?, Quinnipiac Probate L.J., Vol. 32 Iss. 4 (2019). Provided below is the introduction to the Article.

Revocable trusts became a popular form of a will substitute in the 1960s and remain so to do this day. If the trust is funded, the settlor typically retains the right to receive income from the trust, the right to invade the trust principal, and the right to modify the terms of the trust. In addition, the settlor may serve as trustee or may appoint a third-party trustee. At the settlor's death, the trust assets, which may also include property transferred to the trust from the settlor's probate estate by means of a pour-over provision in the will, will be distributed to the trust's remainder beneficiaries in accordance with the terms of the trust.

Because the settlor usually retains an absolute right to revoke or modify the terms of a revocable trust at any time, courts generally refuse to afford remainder beneficiaries any rights in the trust while the settlor is alive. Instead, courts have ruled that remainder beneficiaries have no standing to seek information about the trust or challenge the trustee's actions, regardless of whether the trustee is the settlor or a third-party. However, the situation becomes somewhat murky once the settlor dies and the interests of the remainder beneficiaries are no longer "mere expectancies."

Part II briefly examines the nature and origin of the revocable trust. Part III considers how courts treats objections by remainder beneficiaries to actions taken by the settlor while serving as trustee. Part IV surveys attempts by remainder beneficiaries to question whether the settlor lacks sufficient mental capacity to revoke or modify the trust or whether such actions are the product of undue influence. Part V concerns the ability of remainder beneficiaries to contest the actions of a third-party trustee while the settlor is alive.

Part VI deals with the problem of whether remainder beneficiaries should have the power after the settlor's death to challenge actions taken by the settlor while alive on the theory that the settlor was mentally incompetent or was subject to undue influence. Part VII looks at requests for information or an accounting from a third-party trustee made after the settlor's death. Part VIII focuses on the controversial and perplexing issue of whether a remainder beneficiary should be allowed to sue the third-party trustee of a revocable trust after the settlor's death for wrongdoing allegedly committed during the settlor's lifetime. Part IX evaluates both doctrinal and normative perspectives on the questions of remainder beneficiary rights after the death of the testator. Finally, Part X offers a solution to the conflict of authority on this issue.

September 16, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

As Aretha Franklin’s Heirs Dispute Control of Estate, Judge Orders Court Supervision

ArethaThe reigning queen of soul, Aretha Franklin, died in August of last year and the world believed that passed away without a will. But the discovery of three handwritten documents found in her home foreshadowed a rocky and emotional road for her family.

If Franklin had indeed died intestate, Michigan law dictated that because she did not have a spouse at the time of her death, her $80 million estate would have been divided equally among her four sons. But in each of the wills, provided specific provisions to be made for her oldest son, who reportedly has special needs, and that the balance of assets would then be distributed equally among her other three sons. But there remains a question of whether Franklin did create the wills herself, and the youngest son, Kecalf, convinced the judge to have a handwriting expert examine the wills to ensure his mother wrote the documents.

Aretha's niece, Sabrina Owens, was originally named the estate's personal representative, but Kecalf has also petitioned the court to replace her - with him, thus causing dissention among the family. Owens was Aretha's choice to handle her estate, and she is known to be a capable business person, but the largest asset to the estate is no surprise: the rights to the diva's music catalog and likeness. If properly managed, these can be a financial powerhouse to the heirs and preserve their mother's legacy for future generations.

See Cozen O'Connor, As Aretha Franklin’s Heirs Dispute Control of Estate, Judge Orders Court Supervision, Lexology, September 11, 2019.

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

September 16, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Intestate Succession, Music, New Cases, Wills | Permalink | Comments (0)