Wills, Trusts & Estates Prof Blog

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

Wednesday, August 26, 2020

South Dakota Supreme Court: Partition Upheld Where Deed Severs Joint Tenancy Of Husband And Wife

JtIn Moeckly v. Hanson, the South Dakota Supreme Court upheld a partition judgment against a surviving spouse where a corrective deed executed by the couple failed to contain express language of joint tenancy and thus created a tenancy in common. 

Sharon and Bennett Hanson were married in December 1994. "On the day they married they entered into an antenuptial contract, which stated: In the event of death of either party, any property, real or personal, jointly held by the parties acquired either prior to marriage or thereafter, shall be that of the survivor."

In 1996, the couple purchased real property in South Dakota, as "joint tenants with right of survivorship and not as tenants in common". This was the lot 13 property. 

In 2006, the couple bought another property in which the deed did not contain any joint tenancy language. 

In April 2007, Thompson, a South Dakota attorney, drafted a warranty deed for Hanson and Sharon that conveyed one of the plots to themselves. This deed also did not contain any language that it would be held as joint tenants. 

Sharon passed away in February 2017. 

Sharon's son and granddaughter were appointed as personal representatives of Sharon's estate in Iowa. Sharon's will stated, "I give, devise and bequeath my one-half interest in and to my current residence which is located at 32193 Ponderosa Drive, Burbank South Dakota, to my children, . . . in equal shares, share and share alike, they to have and to hold the same absolutely and forever in fee."

The personal representatives brought a partition action to have the Lot 13 Property sold and the proceeds split evenly between the estate and Hanson. After a partition hearing, the South Dakota circuit court held that the corrective deed terminated the joint tenancy and created a tenancy in common.

Because the partition was "impractical" there circuit court ordered the property sold and the proceeds divided between the one-half interests held by Hanson and Sharon's estate. 

See South Dakota Supreme Court: Partition Upheld Where Deed Severs Joint Tenancy Of Husband And Wife, Probate Stars, August 12, 2020.

August 26, 2020 in Estate Planning - Generally, New Cases | Permalink | Comments (0)

Dolly Parton Backs Black Lives Matter: “Do We Think Our Little White Asses Are the Only Ones That Matter?”

DollyDolly Parton had a lot to say about the Black Lives Matter Movement, in which she spoke "candidly about her own mortality." 

In a new Billboard cover story, the country legend expressed her support for Black Lives Matter and spoke on the recent "uprisings against police brutality and white supremacy." She also spoke on her "own mortality and the importance of drawing up a will."

The 74-year-old legend spoke about being completely on board with the protests that have followed George Floyd's murder at the hands of Minneapolis police. “And of course, Black lives matter. Do we think our little white asses are the only ones that matter? No!” The Queen of Nashville has officially spoken.

Although she was clearly ahead of her time — The Dixie Chicks only changed their name this past June — Parton admitted that she was guilty of “innocent ignorance” back then.

Dolly Parton spoke eloquently on the name change, stating: 

“When they said ‘Dixie’ was an offensive word, I thought, ‘Well, I don’t want to offend anybody. This is a business. We’ll just call it The Stampede.’ As soon as you realize that [something] is a problem, you should fix it. Don’t be a dumbass. That’s where my heart is. I would never dream of hurting anybody on purpose.”

Further, given the progressing age of Dolly Parton, she stated that she wants to get her estate and her will in order in case tragedy strikes—mostly to ease the burden on her family. She stated, "I do not want to leave that mess to somebody else."

Dolly Parton, reminding us why we should all aspire to be more like Dolly Parton. 

See Eli Enis, Dolly Parton Backs Black Lives Matter: “Do We Think Our Little White Asses Are the Only Ones That Matter?”, Consequence of Sound, August 13, 2020. 

Special thanks to Deborah Matthews (Virginia Estate Planning Attorney) for bringing this article to my attention.

August 26, 2020 in Current Events, Estate Planning - Generally, Wills | Permalink | Comments (0)

Tuesday, August 25, 2020

Record Low Interest Rates Let You Have Your Cake and Eat It Too – Life Insurance, Investments & Intra-family Loans

GiftAs of now, the lifetime estate tax exemption amount is $11,580,000, which is set to sunset in 2025. This means that the amount will revert back to $5,000,000 per person, adjusted for inflation, in 2026. That being said, many clients are attempting to take advantage of the larger amounts before it is gone. The difference between the two amounts is $6,580,000 and you do not have to be a mathematician to see that the difference is vast. 

The problem is, in the current economic environment, many people are unable to make outright gifts, but are still wanting to transfer some of their wealth. "Some have already utilized their estate tax exemption amount, but wish they could somehow transfer more wealth without incurring a gift tax." Others are worried about transferring funds before the economy "sorts itself out". 

The IRS has released record low Applicable Federal Rates (AFR). For August 2020 the rates are: 

  • Short term loans must bear interest of at least 0.17%
  • Midterm loans must bear interest of at least 0.41%
  • Long term loans must bear interest of at least 1.12%.

The low rates are making it possible for families that want to transfer wealth without making gifts or utilizing their estate exemption amount. 

One way to do this is to set up an irrevocable life insurance trust to own a life insurance policy on your life. You can then lend the trust sufficient funds to purchase the policy plus additional funds for the trust to invest. "The trust signs a promissory note to the clients, promising to pay back the loan, with the long term AFR interest rate." " The promissory note is an interest only note with a balloon payment of the full principal due at the end of the term. The trust then invests the borrowed funds into a brokerage account."

See Rebecca MacGregor, Record Low Interest Rates Let You Have Your Cake and Eat It Too – Life Insurance, Investments & Intra-family Loans , Bowditch Estate and Tax Planning Blog, August 12, 2020.

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

August 25, 2020 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Man has lifelike wax sculpture made of his dead wife for housewarming

KarnatakaA man recently revealed a lifelike wax sculpture of his dead wife to friends and family at a party. The wax sculpture of his wife was allegedly made for housewarming. 

Srinivasa Gupta, 57, had a businessman in India make the sculpture to ensure that his wife's memory would be kept alive forever. Gupta unveiled the sculpture of his deceased wife MAdhavi at his new bungalow in Koppal, a district in the Indian state of Karnataka. 

"The home was built specifically in Madhavi's honor. Before her death in a car crash three years ago, she had reportedly always dreamed of having a bungalow."

About a year after Madhavi's death, Gupta decided to have the bungalow built in her memory. Gupta reportedly talked with 25 architects before deciding to hire Mahesh Rangannadavaru. 

Gupta stated that he does not regret the gesture, in fact, it is exactly what he wanted and his wife looks so real!

See Ann W. Schmidt, Man has lifelike wax sculpture made of his dead wife for housewarming, Fox News, August 12, 2020.

August 25, 2020 in Current Events, Estate Planning - Generally, Humor | Permalink | Comments (0)

Monday, August 24, 2020

Wills Made on Video Calls Will Soon Be Possible - But Beware the Pitfalls

WillThe UK Government has announced that it will revise the Wills Act 1837. This update comes in the wake of the COVID-19 pandemic that has struck the world. This change is very important because, making a will has never been more important. In making your will, you should be very careful and seek expert advice to ensure your will is not invalidated. 

The U.S. Government has already enacted emergency legislation to make to easier for wills to be made while also social distancing. 

Prior to the revision, you would have needed the witnesses to your will to be physically present with you when you sign and the risk of not doing so would be to make an invalid will. However, following the revision, tis requirement will be lifted and live video calling will suffice for the witness requirement. This way, you cam keep yourself safe while also preparing for the future. 

If you will be taking advantage of this new method of making a will, you should take a look at the possible pitfalls that are listed below. 

  • Your witnesses must watch you sign your Will via a real-time video call, not by pre-recorded video.

  • Likewise, you must watch your witnesses sign your Will in a real-time video call.

  • Current government guidance specifies that, to maintain a clear line of sight, you should hold the first page of the Will up to the camera for your witnesses to see and then turn to the signature page, ensuring they can see you sign in the correct place. So, camera angles will need to be set up carefully and checked throughout the signing process.

  • There can only be one Will document. So, once you have signed your Will with your witnesses watching, there will be an inevitable delay in its completion, whilst it is posted or delivered to both your witnesses for them to sign (again by live video link).

  • Your Will is not valid until everyone has signed, resulting in an incomplete Will during this lag time. This could present difficulties if, for example, you change your mind or lose capacity between signing the Will yourself and your witnesses signing. The Government's guidance states that the witnesses should ideally sign within 24 hours. A longer period of time may be unavoidable, but the guidance notes that the longer the process takes, the greater the potential for problems to arise.

  • As the Will document will need to be sent between you and your witnesses and back again, there is also a risk of its being lost or damaged if you are posting it.

  • The whole process should be recorded if possible. There will be a minimum of two separate video recordings - one for you to sign the Will and the second for your two witnesses to sign, if they are together in the same room when they do so. If they are not, there will need to be three separate video recordings to complete the Will signing procedure.

  • Electronic signatures are not permitted, the signatures must be made by hand in pen on the one original document.

The Amendment will take effect in September 2020, but will apply to all wills made after January 31, 2020, which was the first date that COVID cases were recorded in England and Wales. 

See Rachael Armstrong, Wills Made on Video Calls Will Soon Be Possible - But Beware the Pitfalls, VWV (U.K.), July 27, 2020.

Special thanks to Adam J. Hirsch (Professor of Law at the University of San Diego School of Law) for bringing this article to my attention.

August 24, 2020 in Current Affairs, Current Events, Elder Law, Estate Planning - Generally, Wills | Permalink | Comments (0)

Estate and Gift Planning with Low Interest Rates - Making the Best of a Bad Situation

GiftDue to the pandemic, the "August 2020 applicable federal rates and section 7520 rate are at historical lows, creating opportunities for interest sensitive estate and gift tax planning."

Interest sensitive planning is dependent ton the applicable federal rate and the section 7520 rate. Below are the relevant Internal Revenue Code sections and Treasury rulings concerting the applicable federal rates:

  1. Section 1274(d)(1)(A) provides that the applicable federal rate is:

In the case of a debt           

instrument with a term of:               

The Applicable 

Federal Rate is:                          



Not over 3 years

The Federal short term rate

Over 3 years but not over 9 years

The Federal mid-term rate

Over 9 years

The Federal long-term rate 

2. Section 7520(a) provides the general rule that the value of any annuity, any interest for life or a term of years, or any remainder or reversionary interest shall be determined—

(1) under tables prescribed by the Secretary, and

(2) by using an interest rate (rounded to the nearest 2/10 ths of 1 percent) equal to 120 percent of the Federal midterm rate in effect under section 1274(d)(1)f or the month in which the valuation date falls.

3. Section 7872 provides rules for treatment of loans with below market interest rates, and provides that in the case of a term loan, a below market loan is any loan if the amount loaned exceeds the present vale of all payments due under the loan,

- the present value of any payment is determined as of the date of the loan by using a discount rate equal to the applicable federal rate, and

- the applicable federal rate in the case of a term loan shall be the applicable Federal rate in effect under section 1274(d) as of the date on which the loan was made, compounded semiannually.

  1. Revenue Rulings: The applicable federal rates and the section 7520 rate are published monthly by the IRS in a revenue ruling, issued approximately 2 weeks prior to the end of the previous month for which the rate is being published. The AFR’s are published under Table 1, and the section 7520 rate is published under Table 5.

The August 2020 rates, published in Rev. Rul. 2020-15, 2019-32 I.R.B. __  (Aug. 3, 2020), are:

Short-term AFR: 0.17%

Mid-Term AFR: 0.41%

Long-Term AFR: 1.12%

Section 7520 rate: 0.4%

See Christopher T. Rogers, Estate and Gift Planning with Low Interest Rates - Making the Best of a Bad Situation, Mitchell Williams Law, August 10, 2020.

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

August 24, 2020 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Sunday, August 23, 2020

What You Should Know About Writing a Will

Estate 5.32.45 PMAugust is national make a will month, which means now is the perfect time for you to take the necessary steps to draft your will. The American College of Trust and Estate Counsel recently developed a new webpage with tips and information about wills and what steps you should take to prepare your own. 

On the webpage you can learn about:

  • What a will is and why you need one 
  • The essential documents needed to get your affairs in order
  • How to choose your executor and trustee 
  • 5 reasons to update your estate plan
  • Digital asset management in life and death 

The webpage is a great resource to learn more about estate planning and the proper steps and documents that are necessary to ensure you have a solid plan for your family in the event of your death. 

See actec.org

August 23, 2020 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Saturday, August 22, 2020

Article on Judgment-Proofing Voluntary Sector Organisations from Liability in Tort

Phillip Morgan recently published an article entitled,  Judgment-Proofing Voluntary Sector Organisations from Liability in Tort, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Tort

Voluntary sector organisations (VSOs) may use ordinary principles of law to protect themselves from tort liabilities by rendering themselves judgment-proof. There are two viable judgment-proofing systems available to VSOs: (1) charitable purpose trusts, and (2) group structures. Whilst these systems are not fool-proof, they offer significant protection from tort liabilities. However, judgment-proofing may come at a high price to the voluntary sector.

August 22, 2020 in Articles | Permalink | Comments (0)

Article on Bartlett Duty and 'Anti-Bartlett' Clauses: Resolving Controversies

Ivan Cheuk Him Sin recently published an article entitled, Bartlett Duty and 'Anti-Bartlett' Clauses: Resolving Controversies, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Trustee

Discusses the Hong Kong Court of Final Appeal decision: Zhang Hong Li v DBS Bank (Hong Kong) Ltd [2019] HKEC 2792.

August 22, 2020 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, August 21, 2020

When a spouse passes away

SpouseLosing a loved one is one of the hardest and devastating thing that we go through. Not only is the grieving process tough, but you typically do not have much time to grieve before you have to tackle the tasks of preparing for memorial services and taking the proper legal and financial steps following the death. 

Discussed below are five key steps that you can take to move forward financially after losing your spouse. Having a list of tasks can make the process a bit easier on you as you can separate what needs to be taken care of immediately from the things that can wait. 

  1. Don't feel as if you need to do everything all by yourself
  2. Don't think you have to do everything at once
  3. Enlist the expertise of your professional advisors
  4. Understand that life will be different 
  5. Be prepared for a lot of paperwork

See Nickolas Strain, When a spouse passes away, Investment News, August 11, 2020.

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

August 21, 2020 in Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)