Wills, Trusts & Estates Prof Blog

In Isolating Times, Can Robo-Pets Provide Comfort?

Due to the pandemic, many seniors have been cut off from their friends and family, and have been forced into isolation—alone. 

Charlene Spangler, who lives in a dementia care facility in California, told her daughter that she wanted a dog for her 92nd birthday. At one time she had a family dog named "Wolfgang" but because of her dementia, had a hard time recalling his death.

Charlene's daughter, Linda, used to visit her every other day in which she would push her around in a wheelchair to watch the ducks and pet dogs. 

Unfortunately, due to the pandemic, most of the activities that Charlene used to enjoy have been stripped away. Charlene and Linda are forced to communicate through video calls. 

Linda knew that she could not get her mother a dog, but she thought of an alternative. Linda had heard about robotic pets and decided to look them up. 

Linda decided to get her mom a fluffy robotic puppy, who Charlene named Dumbo. 

Apparently, COVID-19 has created a pique in interest of these robotic animals. Public money is even being used to purchase them. These robotic pets are not cheap, but due to the FDA referring to these robots as "biofeedback devices", Medicare will cover the expenses of the robot. 

Studies have shown that these fluffy robotic pets have decreased stress, anxiety, feelings of loneliness, depression, and more.

See Paula Span, In Isolating Times, Can Robo-Pets Provide Comfort?, N.Y. Times, September 27, 2020. 

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

Electronic-Will Legislation: The Uniform Act versus Australian and Canadian Alternatives

The Uniform Electronic Wills Act (Uniform Act), promulgated in 2019, allows created wills to be formalized on computers and other portable devices, leaving the wills to be completely electronic and never on paper. Also, testators are allowed to execute a will by signing it electronically and witnesses can be either physical or virtual. 

This new era of signing and executing wills makes storage and filing much simpler since the wills can be stored as a file. As of now, no state has adopted the Uniform Act, but Arizona, Florida, Indiana, and Nevada have enacted non-uniform legislation authorizing electronic wills. 

Although this new technology may certainly make things a bit easier, there are a few downfalls. For one, under the Uniform Act, all a testator and witness must do is sign type their names, making it akin to online transactions. This could raise contractual issues in the future, since e-signatures are and mutual agreement have often been food for the belly of litigation. Also, this will make it much harder for witnesses and testators to recognize the documents in the future. Fraud and forgery will pose a much greater risk in this form of formalizing wills. 

People may also be more encouraged to perform DIY wills instead of reaching out for help. 

Essentially, the main worry is that the many safeguards that are in place due to the requirement to execute wills in person will be removed in in the electronic era of wills.

Despite the potential downfalls, there are also many upsides to executing wills electronically, especially for those affected by COVID-19. They are easier and allow those that cannot leave home a means to execute important estate planning documents. 

It will be interesting to see if and when states will adopt the Uniform Act. 

See Adam J. Hirsch and Julia C. Kelety, Electronic-Will Legislation: The Uniform Act versus Australian and Canadian Alternatives, American Bar Association: Probate and Property, September/October 2020. 

 

The ACTEC Foundation Announces 2020-2022 Class of Dennis I. Belcher Young Leaders

The following is from an ACTEC Foundation press release:

Washington, DC, September 30, 2020: Jeffrey C. Thede, President, The ACTEC Foundation and Terrence M. Franklin, Chair, ACTEC Diversity, Equity & Inclusivity Committee are pleased to announce the sixth class of Dennis I. Belcher ACTEC Young Leaders.

The Dennis I. Belcher Young Leaders Program was designed to foster scholarship and education in trust and estate matters, promote diversity and inclusivity and encourage the development of potential ACTEC Fellows. Initiated in collaboration with the American Bar Association Real Property, Trust and Estate Law Section (RPTE) Fellows program, it provides successful graduates of the two-year RPTE program an opportunity to extend their participation in RPTE leadership activities through the financial support of The ACTEC Foundation. In March 2018, the program was named after Dennis I. Belcher, ACTEC President 2009-2010, a leader of the College and mentor to many young trust and estate lawyers.

New ACTEC Young Leader, Emily Plocki of Venable LLP in Washington, DC said, “I am honored to be a participant in the Dennis I. Belcher Young Leaders Program and look forward to expanding my involvement in the ABA RPTE Section and broadening my knowledge of ACTEC and The ACTEC Foundation. I am excited to attend and learn from regional ACTEC events, which will be extremely beneficial in my growth as an estate planning attorney.”  

The Dennis I. Belcher Young Leaders Program provides lawyers with an in-depth introduction to ACTEC and its role in the trust and estate community and encourages active engagement in responsibilities that support future eligibility for nomination as an ACTEC Fellow. Young leaders are offered tuition-free attendance at the ACTEC-ALI/CLE webinars, financial support to attend ABA/RPTE Section Meetings and are invited to attend regional and state ACTEC events.

The ACTEC Foundation 2020-2022 class of Dennis I. Belcher Young Leaders are:

Jessica Coutré of Freeborn in Chicago, IL

Jessica Coutré received her JD from Chicago-Kent College of Law where she was on the Dean’s Honor List and received the CALI Excellence for the Future Award in Federal Transfer Tax. As an attorney in the Corporate Practice Group at Freeborn, she concentrates her practice in estate planning, trust and estate administration and controversy and related gift, estate and generation-skipping transfer tax issues for high and ultra-high net worth individuals, their families and their businesses. Jessica advises clients on the structuring and implementation of advanced estate planning strategies, supplemental needs trusts for disabled loved ones, pre- and post-nuptial agreements and charitable planning through the creation of private foundations, public charities and charitable trusts.  

Jessica Diaz of Sherman & Howard in Denver, CO

Jessica Diaz received her JD from the University of Chicago Law School and is a Member in Sherman & Howard’s Estate and Tax Planning Group where she focuses her practice on sophisticated estate, tax and business succession planning. She works with clients to address a variety of planning needs and designs creative solutions that integrate each client’s family values and dynamics with sophisticated wealth transfer strategies. Jessica’s practice also includes business, marital and charitable planning; estate and trust administration; advising trustees, personal representatives and beneficiaries; and probate litigation.

Jacob Geierman of Georgetown University Law Center in Washington, DC

Jacob L. Geiermann is a student at the Georgetown University Law Center where he is obtaining his LL.M. in Taxation with a Certificate in Estate Planning. Jacob is a graduate of the University of North Dakota where he received his JD in 2013 and degree in Accountancy in 2009. Since law school, Jacob maintained an active trusts and estates practice in North Dakota and Minnesota, working closely with a long-time ACTEC Fellow. Jacob has extensive experience in providing legal counsel in the areas of estate planning, tax planning and compliance and trust and estate administration.

Emily Plocki of Venable LLP in Washington, DC

Emily Plocki received her JD, cum laude, from the University of Toledo College of Law and her LL.M. (with distinction) in Taxation, Certificate in Estate Planning from Georgetown University Law Center. Emily assists high-net-worth individuals, multigenerational families and owners of family corporations, both domestically and internationally, with tax planning and wealth preservation. Emily handles a variety of matters, including estate, gift and generation-skipping transfer tax planning; trust and estate administration; planned charitable giving; and business succession strategies.

Renee Salley of The Salley Law Firm in Marietta, GA

Renee E. Salley earned her JD from Georgia State University College of Law where she was an Outstanding Tax Student Award recipient awarded by the State Bar of Georgia. She is an estate planning attorney who also serves clients in the areas of business planning as well as estate and trust administration at The Salley Firm, LLC located in the metro-Atlanta area. Prior to starting her own firm, Renee spent several years as an associate with deAndrade Mangieri, LLC, focusing on individual, family, and multi-generational estate tax planning, business succession planning, trust and probate administration and small business legal support. Currently serving as a Real Property, Trusts, & Estates Fellow with the American Bar Association, Renee is a member of the State Bar of Georgia as well as the Alabama State Bar.

Celebrity Estate Planning: Misfires of the Rich and Famous III

We tend to look at celebrities like they are supernatural, even immortal, which is probably why we are often shocked and confused when one of our favorite celebrities pass on. The truth is, like us, celebrities are normal people and like us, they often neglect estate planning. This is the truth despite the amount of attorneys and other representatives they have on their team. 

Discussed below are a couple of celebrity stories that will hopefully teach you a useful lesson on the importance of estate planning and the risks of avoiding the issue. 

Johnny Hallyday

You may know Hallyday as the "French Elvis." Hallyday died of lung cancer in December of 2017 at the age of 74. At the time of his death, Hallyday was married to his fourth wife when he passed and had adopted children as well as natural born children. 

Hallyday died with estate planning documents that had been executed in California that left his estate to Laeticia, his fourth wife and their two children upon her death. Hallyday's natural born children opposed this estate plan in French court arguing that French law should apply to Hallyday's estate. In 2019, a French court agreed with Hallyday's natural born children, finding that forced heirship applied. 

The lesson from this story is to make sure that your client knows exactly what they want and the emotional and financial battles that can result from certain estate planning decisions. 

In a like Hallyday's where the client may be able to choose their domicile, you will want to make sure you are clear as to which law will govern the estate. 

Stan Lee

Stan Lee is one of the creative minds behind Marvel. Lee died at the age of 95 in November of 2018. Despite his fame and contribution to the world, Lee was also subject to "predators who seek to take advantage of the elderly." Lee's estate was estimated at $80 million when he died. He was only survived by a daughter. 

After Lee's wife passed on, Lee was left without stable care and security. This lead to a battle between Lee's daughter and other people that had snaked their way into Lee's life. Lee realized that he had multiple people trying to manipulate him and steal his money and was forced to send out a "cry for help" in an affidavit. Luckily, one of these aforementioned snakes was arrested following an investigation by the Los Angeles Police. 

Lee had to spend his last months on this Earth protecting himself from elder abuse. If someone would do that to Stan Lee, you can bet your bottom dollar that they would do it to you too.

 

There are many, many more celebrity stories that shed light on the importance of estate planning and the risks associated with failing to do so. For more, 

See Jessica Galligan Goldsmith et al., Celebrity Estate Planning: Misfires of the Rich and Famous III, American Bar Association: Probate and Property, September/October 2020. 

Making Lemonade out of Lemons: Estate Planning Opportunities in a Low Interest Rate Environment

We have been thrust into an environment that is unpredictable and what many are referring to as "uncertain times." Due to the stress that has come with these "uncertain times" many people are not thinking about and are quite possibly even avoiding gifting programs. However, the current depressed financial markets and historically low interest rates have presented "a unique opportunity for families to pass a significant amount of wealth to younger generations with minimal transfer tax exposure."

There are multiple estate planning techniques that provide a great potential for upside "when implemented during a state of declining financial markets combined with the historically low interest rates. A few of these techniques are:

• Grantor Retained Annuity Trusts
• Sales to a Grantor Trust
• Intrafamily Loans
• Charitable Lead Trusts
• Generation-Skipping Transfer Tax Planning

Before you begin planning your gifting strategy, it is important to remember that each individual has a combined federal estate and gift tax exemption of $11.58 million. Which means, each married couple has $23.16 million. This exemption will remain in place in 2025, barring any unforeseen reduction due to the 2020 elections or other factors. 

Now is a perfect time to take advantage of the "rare opportunity to make some lemonade out of lemons."

See Anna Katherine Moody & Emily A. Plocki, Making Lemonade out of Lemons: Estate Planning Opportunities in a Low Interest Rate Environment, American Bar Association: Probate & Property, September/October 2020. 

 

Oregon woman disputes Wells Fargo claim she’s dead: ‘It’s not funny’

Judy Cashner, a retired secretary, was unable to access her income because her bank had her listed as deceased. 

At first, Judy admitted that she was a bit amused when her estate received a letter from Wells Fargo claiming she was dead.

However, when Judy and her husband were unable to finance their home due to the bank's mistake, "the laughs ended."

Judy later found out that Wells Fargo shared this incorrect information to three credit-reporting agencies. Judy stated, "At first I thought they'd just cancel the credit card and it was kind of funny. But not it's not funny."

Judy also stated that "mysterious non estate charges began appearing on her credit card bill. 

Unfortunately for Wells Fargo, this only adds to the list of negative headlines that they have made in recent years. 

See Dom Calicchio, Oregon woman disputes Wells Fargo claim she’s dead: ‘It’s not funny’, Fox News, September 26, 2020. 

Are you prepared to die? I am, and that’s the right way to live.

Of the near 202,000 Americans who have died unexpectedly from COVID-19 in the past 7 months, most of them were likely not planning for a sudden death. According to caring.com, "fewer than half of those 55 and older had completed estate-planning documents. The number 1 reason being they "haven't gotten around to it." 

However, the concerns surrounding COVID-19 has lead to a "boom" in estate planning. Estate planning checklists have begun to appear online to provide guidance on planning for life before and after death.

If there is one thing to take away from the risks of the Coronavirus, it is the importance of estate planning. Procrastination poses a risk that will go unnoticed for years if not checked. Keeping your will and living will updated is necessary in order to be prepared to die. 

Being prepared to die and being ready to go are not the same thing, of course. However, you can never be ready to go if you are not prepared to die; through end-of-life planning, you can get there. 

See Steven Petrow, Are you prepared to die? I am, and that’s the right way to live., Washington Post, September 26, 2020. 

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

Article on Preparation of Wills in Times of COVID-19 Pandemic – Selected Observations

Mariusz Zalucki recently published an article entitled, Preparation of Wills in Times of COVID-19 Pandemic – Selected Observations, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. 

Pandemic time is a situation of increased human deaths, which cannot be left without the influence and interest of the law of succession. Some legislators have prepared and enacted appropriate facilities for the use of formal instruments for disposing of property upon death specifically for the pandemic period. The author looks at these solutions and wonders whether it is appropriate to deformalize the law of succession for the period after the pandemic, while presenting the statutory solutions of selected states.

Article on ESG Investing: Theory, Evidence, and Fiduciary Principles

Max M. Schanzenbach and Robert Sitkoff recently published an article entitled, ESG Investing: Theory, Evidence, and Fiduciary Principles, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. 

Trustees and other investment fiduciaries of pensions, charities, and personal trusts, and those who advise them, face increasing pressure to rely on ESG factors in the investment management of tens of trillions of dollars of other people’s money. At the same time, however, confusion abounds about the intersection of fiduciary principles and ESG investing. This article cuts through that confusion to provide guidance about when and how ESG investing by trustees and investment fiduciaries is permissible. We make four interrelated points:

(1) we provide a clarifying taxonomy on the meaning of ESG investing, differentiating between risk-return ESG (i.e., using ESG factors to improve risk-adjusted returns) and collateral benefits ESG (i.e., using ESG factors for third-party effects);

(2) we discuss the subjectivity inherent to identifying and applying ESG factors, which complicates assessment of ESG investing strategies;

(3) we summarize the current theory and evidence on whether ESG investing can improve risk-adjusted returns, finding the results to be mixed and contextual; and

(4) we show that American trust fiduciary law generally prohibits collateral benefits ESG, but risk-return ESG can be permissible if supported by a reasoned and documented analysis that is updated periodically.

Article on Inheritance Crimes

David Horton and Reid K. Weisbord recently published an article entitled, Inheritance Crimes, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. 

The civil justice system has struggled to resolve disputes over end-of-life transfers. The two most common grounds for challenging the validity of a gift, will, or trust—mental incapacity and undue influence—are vague, hinge on the state of mind of a dead person, and allow factfinders to substitute their own norms and preferences for the donor’s intent. In addition, the slayer doctrine—which prohibits a killer from inheriting from her victim—has generated decades of constitutional challenges.

But recently, these controversial rules have migrated into an area where the stakes are significantly higher: the criminal justice system. For example, states have criminalized financial exploitation of an elder, which includes obtaining assets through undue influence. Likewise, prosecutors are bringing theft charges against people who accept transfers from mentally diminished owners. Finally, legislatures are experimenting with abuser statutes that extend the slayer doctrine by barring anyone from receiving property from the estate of a senior citizen whom they mistreated.

The Article evaluates the benefits and costs of this trend. It explains that these new sanctions deter elder abuse: wrongdoing that is rampant, pernicious, and underreported. Nevertheless, the Article also exposes the dangers of criminalizing this unique area of law. First, criminal undue influence and the abuser doctrine may be unconstitutional in some situations. Second, inheritance crimes suffer from the flaws that make probate litigation so unreliable. Third, because inheritance law and criminal law are so different, jurisdictions have not yet figured out how to gracefully merge them. Finally, the Article builds on these insights to argue that states should abolish criminal undue influence, harmonize civil and criminal rules, and create exceptions to abuser laws.