Wills, Trusts & Estates Prof Blog

Article on Drafting & Enforcing Arbitration Clauses in Wills, Trusts & Settlement Agreements

W. Cameron McCullock and Michelle Rosenblatt recently published an Article entitled, Drafting & Enforcing Arbitration Clauses in Wills, Trusts & Settlement Agreements, Est. Plan. & Cmty. Prop. L.J., Vol. 12 Book 1 (Fall 2019). Provided below is the introduction to the Article.

    Estate and trust litigation can pose a greater risk to family wealth than the current tax regime under which most estates are not subject to transfer taxes. Specifically, there is always the possibility that an estate plan will be subject to attack, whether on a legitimate basis, out of frustration, or confusion with the plan. The description in Charles Dickens' Bleak House of legal proceedings involving conflicting wills dragging on for generations remains appropriate: "Innumerable children have been born into the cause; innumerable young people have married into it; innumerable old people have died out of it. Scores of persons have deliriously found themselves made parties...without knowing how or why; whole families have inherited legendary hatreds with the suit."

    Dickens' story, although an extremem example of heirs not receiving their intended inheritance, encapsulates the worst of trust and estate litigation. The authors finds that trust and estate dispures are less common in families who start discussions about wealth early and often, who have chosen to be transparent about the source and preservation of their wealth, and who do not have fissured familial relationships. However, when disputes arise in those instances, the question becomes how to effectively address such disputes.

    Over the last century, arbitration has established itself as one of the most popular means for resolving commerical disputes. It is no wonder that commentators and planners have been talking about arbitration as method of resolving trust and estate disputes for some time. Notably, George Washington, a forefather in more ways than one, included in is 1799 Will a clause providing that any disputes should be decided by three impartial individuals who, "unfetter by Law, or legal constructions" would decide the matter. However, the practice of including arbitration provisions in estate planning documents failed to gain must traction until recently. Part of the issue was that few courts around the country enforced arbitration provisions in trust agreements or wills. In 2007, a shift began to occur as some states began enacting statutes authorizing arbitration in trust or will disputes - to fate, Texas has not joined their ranks. In 2009, the International Chamber of Commerce released its first arbitration clauses. in 2012, the American Arbitration Association (AAA) followed suit and released arbitration rules for wills and trusts. In 2013, the Texas Supreme Court jumped into the fray by ruling that an arbitration clause in an inter vivos trust intrument was valid and enforceable. The decision opened the door to the widespread use of arbitration in trust and estate disputes.

    Now, Texas fiduciary litigation attorneys (including one of the authors) see a casual approach to the inclusion of arbitration clauses in wills and trusts when the planner - and more importantly, the settlor - has given no real throught to the consequences of including the provision. Many thought to the consequences of including the provision. Many well-intentioned estate planning attorneys now include arbitration provisions in their estate planning documents regardless of whether it actually saves time, money, or discourages litigation. An attorney at a recent CLE presentation suggested that:

…[t]he arbitration provision should be included in the basic form so that 'the planner would be reminded to discuss it with the client' ... In many cases, if not most, rather than reminding the planner to discuss the option with the client, the provision receives little attention or explanation other than a stock mention of the supposed benefits.

An estate planning lawyer needs to give genuine consideration as to why an arbitration provision is included in a document and what benefit, if any, the arbitration provision will provide.

    In this paper, the authors examine whether, how, and when it makes sense to include arbitration clauses in estate planning documents.

Art Loss Register: The World’s Largest Database of Stolen and Missing Art

If you purchase a piece of art that bears an ALR (Art Loss Register) certificate, you can be assured that your purchase is not listed as looted, stolen, or otherwise dubious. The organization has no legislative power, but the members do works alongside law enforcement, insurers, auction houses, dealers, museums and many other organizations.

Because of this diligence, the ALR now has what they consider their secret weapon: the world's largest database of stolen and missing art, numbering over 700,000 and being constantly updated. Recent thefts can be logged, and items with questionable provenance or uncertain legal title cross-checked. Individuals or museums pay £70 to submit photos and details of the piece they want to verify and the database is then searched, with 400,000 queries submitted annually.

Major art fairs such as the Tefaf are also utilizing the database. Will Korner, the ALR’s Art Fairs Manager, says that issues do arise, though rarely. “At Tefaf in 2004, we found a still life by [the Dutch painter] Balthasar van der Ast that had gone missing from the Suermondt Ludwig Museum in Aachen in 1945. It took a lot of research to find the rightful owner.” The piece finally made its way back to the museum in 2017.

See Andrew Dickson, Art Loss Register: The World’s Largest Database of Stolen and Missing Art, Financial Times, February 27, 2020.

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

Ed Slott's IRA Advisor: Tax & Estate Planning for Your Retirement Savings, To Track SECURE, Consider an IRA Trust - April 2020

Ed Slott has published his IRA Advisor: Tax & Estate Planning for Your Retirement Savings, To Track SECURE, Consider an IRA Trust - April 2020. Provided below is the introduction to the newsletter.

The new Setting Every Community Up for Retirement Enhancement (SECURE) Act introduces a 10-year rule for many beneficiaries of IRAs and employer-sponsored retirement plans. Following this rule will require extensive tracking and failure to comply could generate a penalty equal to 50% of the amount involved.

One way to address this risk is to name a trust as IRA beneficiary, shifting tracking responsibility from the retirement plan beneficiary to the trustee of the IRA trust. Depending on a client’s choice of beneficiary, it may be an astute move to begin discussions of an IRA trust this year. 

Article on Technology’s Impact on the Changing Future of the Trusts and Estate Practice

Gerry W. Beyer recently published an Article entitled, Technology’s Impact on the Changing Future of the Trusts and Estate Practice, Wills, Trusts, & Estates eJournal (2020). Provided below is an abstract to the Article.

Less than a few decades ago, technology had a minor impact on the legal profession. Today, a wide range of technology may be central to a lawyer’s practice, changing the way we plan for the future. While the integration of technology in the legal world has had its many benefits, keeping up with the wide array of rapidly changing technology now available is a dubious task for many practicing lawyers.

To stay ahead of the curve in your estate planning practice and lessen potential frustration and expense, it is important to understand and leverage the latest estate planning technology. This article will serve to inform estates and trusts lawyers of the available technology tools along with their benefits and disadvantages, with a special discussion of cryptocurrency and electronic wills.

Los Angeles Deputies Search for Stolen Hearse with Body Inside

In Pasadena, a suspect's bad decision to steal a Black Lincoln Navigator from a church parking lot became much worse when the Los Angeles Police Department told the media that a woman's body was in the back of the vehicle. The deputies made a public plea for the thief to bring back the body and casket.

The hearse was stolen from Saint Anthony's Greek Orthodox Church on Rosemead Boulevard just after 8 p.m. while the mortician was bringing a second body that was in the vehicle into the church. 

The investigation is ongoing, and hearse's license plate is 7ZDG618.

See Brie Stimson, Los Angeles Deputies Search for Stolen Hearse with Body Inside, Fox News, February 27, 2020.

Germany High Court Rules Assisted Suicide Ban Unconstitutional

In 2015, Germany passed a law that allowed assisted suicide for "altruistic motives," but forbade people from offering it to someone else "on business terms." For those that crossed the line the punishment was up to three years in prison. The law was meant to curtail assisted suicide and it immediately raised questions as to whether doctors prescribing medication to assist in an ill patient's suicide was in a business fashion.

Germany's highest court ruled Wednesday that the law banning assisted suicide when being conducted on a "business basis" is unconstitutional. Active assistance is banned in Germany, but passive help, such as providing deadly medication for them to take themselves has been a legal gray area. This hesitance stems from that fact that the last time euthanasia was part of public policy it was used by the Nazis to kill more than 200,000 people with physical and mental disabilities.

The 2015 law sought to narrow the regulations with middle-of-the-road proposal that received cross-party support. The four proposals discussed at that time ranged from fully permitting the practice so long as it is not for profit to a near-complete ban.

See, Associated Press, Germany High Court Rules Assisted Suicide Ban Unconstitutional, Fox News, February 26, 2020.

Article on Donors and Dollars: Art Community Sees Victory in Summer Settlement at Brandeis

Brian Farkas published an Article entitled, Donors and Dollars: Art Community Sees Victory in Summer Settlement at Brandeis, Wills, Trusts, & Estates eJournal (2011). Provided below is the abstract to the Article. 

June 2011 saw the settlement of the bitter legal battle over the Rose Art Museum at Brandeis University. The outcome of Meryl Rose, et al, v. Brandeis University, et al, an action brought in July 2009 in Suffolk Probate and Family Court by museum supporters, will keep the Rose open for business. This paper reviews the history of the controversy as well as the legal dispute and settlement that followed. Nonprofits and museums around the country should look at the Brandeis firestorm as cautionary tale against de-accessioning donated artwork to generate revenues - even against the backdrop of a grim recession.

Australian Family Claims Son's Headstone was Removed Without Knowledge Over 'Offensive' Picture

Peter Bridge, 33, of Australia died on April 4 of 2019 after succumbing to a life-long battle with cystic fibrosis. The man's father, Arthur Bridge, described his son as a “lovable character” with a “wicked sense of humor,” a memory he hoped to capture in choosing the proper headstone. Along with his name and other usual words, the headstone featured a small portrait of Peter extending his middle finger into the air.

Unfortunately, other visitors to the cemetery did not under the Peter's humor and complained numerous times. The Enfield Memorial Park in Clearview had the entire headstone removed, and Arthur claims that he was informed of its removal. Instead, he found out from a friend that discovered the removal while visiting Peter's gravesite. “If his picture did offend someone, why is it anyone's problem but theirs? That is our son’s personal resting space,” Arthur said.

Michael Robertson, Adelaide Cemeteries Authority Chief Operating Officer, said the cemetery did reach out to the family and left phone message before the headstone's removal. He said the cemetery has offered to replace the photo without the hand gesture or to have the picture covered by a plaque that can be moved by the family for viewing whenever they want. But the family refused both offers, believing that the headstone's current state accurately defines their late son's humor and personality.

See Paulina Dedaj, Australian Family Claims Son's Headstone was Removed Without Knowledge Over 'Offensive' Picture, Fox News, February 22, 2020.

Police Dog Killed in Line of Duty to be Honored with Custom Painted Casket

Hondo, a 7-year-old Belgian Malinois ,was a K-9 member of the Herriman City Police Department in Utah that was killed earlier this month while apprehending a fugitive. He had assisted his partner Sgt. Ben Ricks will over 100 felony arrests and was ranked as one of the state's top K-9's. "PSD Hondo was a true warrior then his actions ensured that his loving friend and partner Ben [Ricks] would able to return home to his wife, children, and HPD family," the chief said at the press conference on February 14.

Johnny Ward and Keith Eccles run an auto body and paint shop that also specialize in custom caskets, though their services usually require a two month waiting period. But when the police called the shop and said they were bringing a casket over the next morning, they did not hesitate. The shop completed the casket, featuring an American flag and a hand-drawn portrait of Hondo's face. in just 24 hours and painted it free of charge.

“It’s hard work, but there’s an incredible sense of satisfaction,” Ward said. "This dog really is a hero.”

See David Aaro, Police Dog Killed in Line of Duty to be Honored with Custom Painted Casket, Fox News, February 24, 2020.

Kirk Douglas Leaves the Majority of his Fortune to Charity

Kirk Douglas, arguably the last member of Hollywood's Golden Age, passed away on February 5, 2020 at the age of 103. He is survived by his second wife Anne, who he married in 1954, and three of his sons - Michael, Joel and Peter. Kirk had suffered a stroke in 1996 and his health had declined, but he still occasionally appeared in movies and television productions.

In addition to being a three time Oscar nominee, he received a lifetime achievement Oscar in 1996, the Presidential Medal of Freedom in 1981, the Jefferson Award for public service in 1983 and was named to the French Legion of Honor in 1985. He was born in Amsterdam, New York to Jewish immigrant parents and was lucky enough to have an illustrious Hollywood career that spanned seven decades.

Kirk and Anne founded the Douglas Foundation 1964 and opted to bequeath the majority of his estate to the charity. The Foundation benefits the Children’s Hospital of Los Angeles, The Kirk and Anne Douglas Childhood Center, a St. Lawrence University scholarship for underprivileged students, Westwood’s Sinai Temple and Culver City’s Kirk Douglas Theater, a restored venue. Anne Douglas remains as the nonprofit's managing trustee.

Though at first glance it might seem harsh that Kirk did not leave anything to his beloved son Michael, who followed in his father's footsteps and became an actor. But the well-known Wall Street is worth over $300 million in his own right so he most likely was not expecting anything from his father.

See Nate Day, Kirk Douglas' $61M Fortune Given Mostly to Charity, None Went to Son Michael Douglas, Fox News, February 23, 2020; see also Jorge Fitz-Gibbon, Kirk Douglas Leaves Most of his $80 Million Fortune to Charity, Page Six, February 22, 2020; see also Will Twigger & Susan Knox, Kirk Douglas Leaves Entire £61m Fortune to Charity - and Son Michael Douglas Doesn't get a Penny, Mirror, February 23, 2020.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) and Jay Brinker (Cincinnati Estate Planning Attorney) for bringing these articles to my attention.