Wills, Trusts & Estates Prof Blog

Remote Notarization Law Now Available in Massachusetts

The number of states that have recently passed legislation to allow remote notarization for estate planning documents during the ongoing pandemic is quickly growing. Massachusetts is number 45 with Governor Baker signing the bill into law on April 27th.

There are certain guidelines that must be followed.

• The allowance only lasts until three days after the end of the state of emergency, which has been extended to May 18th.
• Only attorneys and paralegals under their supervision may notarize estate planning documents: wills, trusts, durable powers of attorney, and HIPAA releases.
• All remote notarization sessions must be recorded and the recording saved for 10 years.
• The notary must sign a supplemental affidavit verifying a number of facts, including that the person signing the documents and all the witnesses were in the state of Massachusetts.
• The notarization is not effective until the notary receives and compiles all original signature pages, notarizes the document, and completes supplemental affidavit.

For the immediate future this is great news, but the question remains: why is this law not permanent? Also, why do all the witnesses need to be in Massachusetts? 

See Laura Goodman & Harry S. Margolis, Remote Notarization Law Now Available in Massachusetts, Margolis.com, April 28, 2020.

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

Do You Want to Die in an I.C.U.? Pandemic Makes Question All Too Real

Many older American's with chronic health issues, even if they have not contracted the novel coronavirus, are asking themselves a difficult question: if given the choice, would like want to die in a hospital's intensive care unit? Edo Banach, president of the National Hospice and Palliative Care Organization, recently had that conversation with his 69-year-old mother, Cheryl Goldman. She told her son that she would rather stay at home and receive hospice care instead of being admitted and being placed on a ventilator.

“It’s the kind of conversation everyone should be having with their loved ones,” Banach said. Depending on the source, one-third to two-thirds of Americans have not executed an advanced directive, which outlines what medical treatments they would accept or refuse and also designates a decision maker to act on their behalf if they become incapacitated. Many seniors and their families focus on do not resuscitate orders which deals with whether patients would want to be resuscitated after cardiac arrest. But advanced directives are the documents that involve the question of ventilation and intubation, which involves a tube inserted down the throat, connected to a ventilator that pushes air into the lungs. After an extended period of time on a ventilator - usually two weeks - doctors commonly perform a tracheostomy, creating a surgical opening in the windpipe that replaces the swallowed tube.

“After elderly people have been on a ventilator, they’ve often already developed physical debilitation, difficulty swallowing, bedsores,” said Dr. Kosha Thakore director of palliative care at Newton-Wellesley Hospital in Massachusetts. Further medical issues can be physical or cognitive or both, and are often permanent. Though the question may be hard to ask of loved ones, during these uncertain times it is becoming critical - "If you got really sick, would you want to take a chance and be placed on a ventilator? Or would you prefer to pass at home?"

See Paula Span, Do You Want to Die in an I.C.U.? Pandemic Makes Question All Too Real, New York Times, April 24, 2020.

Special thanks to Matthew Bogin, (Esq., Bogin Law) for bringing this article to my attention.

Choosing the Right Trustee

The largest transfer of generational wealth is expected to occur in the next 25 years, so there so should be no surprise that there has been an increase in trust litigation. One issue that is often at the heart of these cases is that of successor trustees. With proper planning and and due diligence this problem may be avoided without getting litigators or arbitrators involved.

The following is a number of mistakes that settlors and trustees often make that should be avoided.

• When Successor Trustees Misunderstand Their Fiduciary Responsibility
  • The fiduciary responsibility of successor trustees is to the trust's beneficiaries rather than to the creator of the trust, and this distinction should be clearly spelled out in the trust document.
• When Trust-Makers Appoint Co-Trustees Who Disagree
  • If co-trustees are siblings or other family members, disagreements are almost bound to happen. Consider naming an unbiased third party to serve as successor trustee.
• When There Is A Failure To Coordinate Among The Grantor’s Key Advisors
  • Lack of communication during the trust's creation and the initial estate planning process can cause disagreements and missing information. The grantor should introduce all trustees and advisors at the outset of the relationship to inspire cohesion. 
• When The Successor Trustee Doesn’t Act Objectively
  • To ensure the trustee acts in accordance with the grantor’s intentions, it can be helpful to appoint an objective third party rather than a biased family member or adult child.
• When The Grantor Does Not Build Enough Flexibility Into The Trust Documents
  
  • Depending on the state where the trust was created, amending the trust documents can be complicated. Naming a trust protector, whose sole purpose is to remove an unsatisfactory trustee on behalf of the beneficiaries when necessary, can avoid costly and time consuming court involvement.

See Kimberly Dawn Bernatz, Choosing the Right Trustee, Financial Advisor, April 1, 2020.

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

Article on Gifts in Contemplation of Death: Why Can't Section 2035 Simply Die?

Stephanie J. Willbanks recently published an Article entitled, Gifts in Contemplation of Death: Why Can't Section 2035 Simply Die?, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article.

Income and wealth inequality has become a popular topic. There are a myriad of ways to reduce such inequality utilizing the tax system, either the income tax or the transfer taxes. Revitalizing the estate tax by reducing the exemption amount and adjusting the rate structure would reduce inequality. Much has been written about the viability of the estate tax and possible alternatives. This article does not revisit that analysis. Instead, it assumes that the estate tax will remain a viable component of the overall tax system. It analyzes one small segment of the estate tax – §2035 – and argues that repeal would simplify the estate tax without reducing revenues. Commentators have advocated for integration and simplification of the gift and estate tax provisions governing retained interests for over 70 years, but §2035 has received relatively little attention.

CLE on Primer on Life Insurance and Basic Structuring

The Section of Real Property, Trust & Estate Law of the American Bar Association is presenting a webinar entitled, Primer on Life Insurance and Basic Structuring, on Tuesday, April 28, 2020 at 1:00 pm - 2:30 pm EST. Provided below is a description of the event.

This fundamentals program will provide an overview of commonly used life insurance products and basic structuring to give planners the tools to advise clients who own or are considering purchasing a life insurance policy.

The topics covered will include:

• • Types of insurance products
  • Suitability
  • Taxation
  • Life insurance trusts in general
  • Considerations for life insurance trust trustees

Speaker include:

• • Bruce Tannahill, Mass Mutual, Phoenix, AZ
  • Melisa Seyhun, Merrill Lynch, Chicago, IL

Passing of Dave Cornfeld

It is with profound sadness that I report the passing of Dave Cornfeld at the age of 98 on April 22, 2020.

Dave was a member of what is now the law firm of Husch Blackwell LLP for 71 years. As his obituary explains:

[H]e made a national reputation as an expert in tax law. Among his many positions and honors, Mr. Cornfeld was a life member of the American Law Institute, a founding member and regent of the American College of Tax Counsel, and vice chair of the American Bar Association’s Section of Taxation. He taught in the graduate tax program at Washington University’s law school and at the University of Miami’s Heckerling Institute on Estate Planning.

For more details of the life of this amazing attorney, see Judith Newmark, Dave L. Cornfeld, 98, acclaimed attorney, expert in tax law, STL Jewish Light (Apr. 23, 2020).

Houston Billionaire’s Bitter Divorce Draws International Attention With a Russian Mistress and Coronavirus Part of the Tangled Web

The court battle in the divorce of Houston billionaire Ed Bosarge, Jr. and Marie Bosarge has been heating up in recent weeks, but now has come to a roadblock. The April trial date has now been missed by the billionaire, allegedly because he is currently suffering from COVID-19.

The bitter war is over an estate worth an approximate $3.2 billion, all of which was earned during the couple's marriage. Ed Bosarge, co-founder of high-frequency trading firm Quantlab Financial, says that every single piece of the estate is locked up in trusts and is listed as "trust property." Marie has been denied access to all 12 of the residences acquired by the couple, including the $45 million flat on London’s Belgravia Square that they purchased in 2011 and she spent two years decorating to her whim. However, she was unaware that her husband was wooing a 20-something Russian socialite, and she was never able to take residence in the flat.

The trust laws in South Dakota appear to take the legal spotlight in the fight. Family law attorney Bucky J.D. Allshouse, who represents Marie, has been quoted as saying that if Ed Bosarge gets away with his scheme of diverting money to locked trusts in South Dakota, then “no wife is safe.” Marie has said that "I want him to be fair. You know, we made our money in Houston. It’s community property. It’s 50-50. I want what’s fair."

See Shelby Hodge, Houston Billionaire’s Bitter Divorce Draws International Attention With a Russian Mistress and Coronavirus Part of the Tangled Web, Paper City, April 21, 2020.

Special thanks to Sara Slabisak (Editor in Chief, Environmental Law, Lewis & Clark Law School) for bringing this article to my attention.

Call for Papers for the Journal of Elder Policy, 2021 Special Issue

Protecting Older Adults During a Pandemic: Challenges and Opportunities for Societies

Editor-in-Chief: Eva Kahana PhD
Distinguished University Professor, Case Western Reserve University

Abstracts of 500 words are due by June 15, 2020.

Full papers (8,000 -10,000 words) due by September 30, 2020.

As we all process our new reality of coping with and surviving an on-going global pandemic, it is important that we focus on what can be done to protect older adults and what we can learn from the spread of this contagion.

Older adults, particularly those with underlying health conditions and/or disabilities are particularly at risk from the novel COVID-19. Not only are they more likely to develop severe complications if exposed to the virus, but they are also made more vulnerable by things such as social isolation (whether in their homes or in an institution), inability to access groceries and medications, and simply ageism. Indeed, many people were not taking the virus seriously at first since it seemed to only severely impact the health of older adults.

To address these important issues, the Journal of Elder Policy is issuing a call for papers that address policy challenges and implications related to COVID-19 and older adults. We welcome both empirical and conceptual papers from diverse disciplines. We seek papers that employ policy approaches to illustrate how the rise of coronavirus impacts older adults.  We are also eager to hear from scholars across the world facing unique challenges in their own countries.

Topics may include but are not limited to:

• Risk assessment, Ageism, Legislation to protect older adults,
• Community initiatives, Medical and nursing perspectives,
• Mental health challenges for elders, Family support or conflict,
• Helping and volunteering, Rationing of care, Challenges for caregivers

Authors should send their Vita and a 500 word abstract related to their paper by June 15 to Managing Assistant Editor, Kaitlyn Langendoerfer ([email protected])

All articles will be peer reviewed.

Texas Courts Conflict On Whether Contingent Remainder Beneficiaries Have Standing To Assert Claims Regarding Trust Administration

Two different appellate courts in Texas have recently published opinions with differing views on whether a contingent remainder beneficiary has standing to sue a trustee for a trust administration issue.

In one of the cases, In re Estate of Little, a settlor of a revocable trust withdrew trust assets and deposited them into an account with rights of survivorship with one child as the beneficiary . The beneficiaries of the trust, also children of the settlor, sued the non-settlor trustee for allowing that to happen, and the trial court granted the trustee summary judgement. The beneficiaries appealed. The appeals court the beneficiaries had standing to bring the claim under Texas Property Code Section 115, and that an interested party includes simply a beneficiary, defined in Tex. Prop. Code § 111.004(2) as “a person for whose benefit property is held in trust, regardless of the nature of the interest.” However, the claims still failed because the settlor of a revocable trust had the authority to remove assets from the trust. Father as settlor and co-trustee had the power to revoke the Trust and was the sole beneficiary of the Trust while alive. Father was free to fund the Trust and dispose of its property as he saw fit.” Furthermore, any fiduciary duty of the co-trustee was owed solely to the father while he was still alive. The summary judgement was affirmed.

In Berry v. Berry, a son and his daughter sued his mother and her brothers regarding a trust and family partnership regarding the operation of a ranch and family business. The defendants asserted that both plaintiffs lacked standing; the appellate court found that the son as present beneficiary of the trust had standing to bring a claim but that the daughter, just a contingent beneficiary, did not. The court of appeals noted a case from 1942 that stated: “[a]n expectant heir has no present interest or right in property that he may subsequently inherit and consequently he cannot maintain a suit for the enforcement or adjudication of a right in the property.”

See David Fowler Johnson, Texas Courts Conflict On Whether Contingent Remainder Beneficiaries Have Standing To Assert Claims Regarding Trust Administration, LexBlog, April 17, 2020.

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

Article on The Role of Trust Law Principles in Defining Public Trust Duties for Natural Resources

John C. Dernbach recently published an Article entitled, The Role of Trust Law Principles in Defining Public Trust Duties for Natural Resources, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article.

The public trust doctrine for natural resources is based to a significant degree on longstanding trust law. Just as trust law is directed at protection of certain assets, so public trust law for natural resources is intended to protect those resources. But how far should that analogy be taken? This issue matters when the statutory or constitutional public trust provisions for natural resources do not seem to address the exact question at issue. Trust law, including charitable and private trust law, has the potential to enhance the protectiveness of public trusts by imposing various fiduciary duties on trustees. It also has the potential to undermine public trusts, particularly through rules requiring that trust assets be financially productive. Using cases from around the country, this Article sets out a four-step methodology for answering that question in a way that furthers the text and purpose of public trusts for natural resources. This methodology can be applied in any case involving the use of trust principles to supplement public trust law. This Article then applies that methodology to a case that is now pending before the Pennsylvania Supreme Court.

In its landmark 2017 decision in Pennsylvania Environmental Defense Foundation v. Commonwealth (PEDF II), the state Supreme Court held for the first time that that judicial review of public trust claims under Article I, Section 27 of the state constitution is to be based on the text of Section 27. But it added that judicial review must also be based on “the underlying principles of Pennsylvania trust law in effect at the time of its enactment.” In 2019, Commonwealth Court used private trust law to hold that one third of the moneys received from bonuses and leases from oil and gas leasing can be expended without any trust limitation. This is the case now before the state Supreme Court.

This Article’s four-step methodology begins with an inquiry into the terms and purpose of the public trust, which in this case is Section 27’s command to the Commonwealth to “conserve and maintain” public natural resources. It then asks whether the terms and purpose of the public trust answer the question. While PEDF II’s analysis seems to foreclose that possibility, the court left the question open. The third step assumes the terms and purpose of the public trust do not answer the question, and asks what trust principles are available to help provide an answer. Under this step, it becomes clear that, while private trust law is one possible principle, another possible principle comes from the law of perpetual charitable trusts. Under the latter, all of the money from bonuses and rentals would be expended for trust purposes. The fourth and final step is to determine which principle would most fully effectuate the terms and purpose of the public trust. The Article argues that the charitable trust law principle is more likely to further Section 27 than private trust law because of its public purposes. As more public trust cases to protect natural resources are litigated and decided, this Article offers an approach to the incorporation of traditional trust law that can enhance the effectiveness of the public trust.