Wills, Trusts & Estates Prof Blog

Article: Trustee Decision-making in the Australian Superannuation Context

Tobias Barkely recently published an article entitled, Trustee Decision-making in the Australian Superannuation Context, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

The Australian compulsory superannuation system contains $AUD 3 trillion in funds, which is a substantial share of the personal wealth held in Australia. This means decisions made by superannuation trustees are important for everyone in Australia, both as beneficiaries and as participants in the Australian economy. The regulation of trustee decision-making, like the superannuation system as a whole, is founded on the equitable principles of trust law, but with an extensive overlay of legislative and regulatory intervention. Examining the regulation of decision-making in this context provides important insights into foundational trust law principles as well as a major component of wealth management in Australia.

Ring v. Harmon (2021)

In Ring v. Harmon, the Court of Appeal in California considered "an alleged loan scheme to drain equity out of a house held in a probate estate." 

When Awana Ring was 80 years old, she lost her daughter Vickie Atiyeh. Vickie left Awana a house when she passed away. According to Awana, her son and grandson developed a scheme to "swipe much of the equity in the house—an inside job without outside help. "

Awana's son Scott and grandson Zachary collaborated with a loan broker to pushed Away to be appointed as personal representative of Vickie's estate, and then baited Away into taking out a predatory loan at a rate of 10.99 percent. "Scott and Zachary took the loan proceeds for themselves while the loan broker received fees and an income stream on the loan." 

Although the San Bernardino County Superior Court found that Awana only had claims as a personal representative of Vickie's estate, since it was in that capacity that she received the loan. However, the Court of Appeal found that Awana's "dual position" as both personal representative and beneficiary was a "special circumstance that justified allowing her to sue based on her beneficial interest in the estate." 

See Ring v. Harmon (2021) (Cal.App.5th). 

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

CLE: Estate Planning With Specialty Assets: Carried Interest, SPACS, and QOZ Funds

On Thursday, January 20, 2022 at from 12:00–1:30 PM Eastern, The American Law Institute (ALI) and The American College of Trust and Estate Counsel (ACTEC) are cosponsoring a CLE entitled, Estate Planning With Specialty Assets: Carried Interest, SPACS, and QOZ Funds. 

Below is more information on the CLE: 

Why You Should Attend

Wealth transfer structures can be complicated and have many moving parts. In recent years, new investment opportunities have emerged with the promise and potential for explosive growth and significant tax benefits. Such specialty assets, including interests in special purpose acquisition companies (SPACs), qualified opportunity zone (QOZ) funds, and private investment funds, are increasingly on clients’ radars as good vehicles for wealth transfer. While these assets can provide unique opportunities for leverage, they also come with nuanced pitfalls and risks within the realms of estate, gift, and income taxation. Join us for this 90 minute webcast to learn how seemingly small variations in different structures can result in quite different solutions. Gain a better understanding of the facts and circumstances of the various options and learn ways to create customized plan structures for each of your clients. 

What You Will Learn

The faculty, all Fellows of The American College of Trust and Estate Counsel and highly-experienced estate and tax planning practitioners, will take a deep dive into the lightly chartered waters of estate planning with specialty assets. They will particularly focus on: 

Carried interests in private investment funds

Various categories of interests in SPACs

Interests in QOZ funds

Preferred partnership structures

 Questions submitted during the program will be answered live by the faculty. All registrants will receive a set of downloadable course materials to accompany the program. 

Who Should Attend

Estate planners and other related professionals, particularly those with wealthy clients, will benefit from this CLE on estate planning with specialty assets offered by ALI CLE and ACTEC. 

Register two or more and SAVE! Register as a group for this program and save up to 35% (click here for more details). Click "Register as a Group" to register at these savings. (Offer valid on new registrations in the same delivery format only; discounts may not be combined.)

 

How a cryptocurrency fortune crippled a deceased billionaire’s estate

When billionaire banking heir Matthew Mellon died suddenly in 2018, he was reportedly worth almost $200 million.

Despite the billionaire tagline, Mellon's estate struggled to pay off his taxes and satisfy Mellon's debts. The struggle was due to the fact that a large portion of Mellon's assets—more than $193 million—were tied up in a cryptocurrency known as XRP. Mellon had never shared his keys with anyone, and because of that, most assumed that the XRP was lost forever. 

Although a large percentage of Mellon's estate was tied up into one asset—XRP—the case was still complicated. Mellon's estate had a hard time confronting the problems of the estate based on the slew of tax bills and a secretive agreement Mellon made while he was alive. Since Cryptocurrency has only become more common in recent years, Mellon's XRP has had a crippling effect on his estate. 

See Grace Ferguson, How a cryptocurrency fortune crippled a deceased billionaire’s estate, Daily Dot, December 23, 2021. 

Article: The Irreducible Core of Trustee Duties in East Asian Trusts

Joyman Lee recently published an article entitled, The Irreducible Core of Trustee Duties in East Asian Trusts, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

This article examines the idea of the “irreducible core” of trustee duties in relation to East Asian trusts. Although the Japanese Trust Act of 2006 has designated many duties as non-core, the extent of reduction is far from certain. This is because regulatory law continues to apply, as well as the court’s policy interest in giving effect to the trust only where this is intended by the parties. The New Zealand Trust Act of 2019, which highlights the centrality of good faith rather than self-denial, clearly identifies the duties which stand at the core of the Japanese and Chinese trusts.

Article: On Time, (In)equality, and Death

Fred O. Smith recently published an article entitled, On Time, (In)equality, and Death, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

In recent years, American institutions have inadvertently encountered the bodies of former slaves with increasing frequency. Pledges of respect are common features of these discoveries, accompanied by cultural debates about what “respect” means. Often embedded in these debates is an intuition that there is something special about respecting the dead bodies, burial sites, and images of victims of mass, systemic horrors. This Article employs legal doctrine, philosophical insights, and American history to both interrogate and anchor this intuition.

Law can inform these debates because we regularly turn to legal settings to resolve disputes about the dead. Yet the passage of time, systemic dehumanization, and changing egalitarian norms all complicate efforts to apply traditional legal considerations to disputes about victims of subordination. While, for example, courts usually consult decedents’ expressed intentions to resolve disputes, how do we divine the wishes of people who died centuries ago, under a legal system designed to negate and dishonor their intentions? How do we honor relationships like kinship for people who were routinely and forcibly separated from their kin? And how do we assess the motives or culpability of institutions that, in prior generations, were complicit in profound horrors, but now pledge honor and respect?

This Article offers a theory of time and equality to help guide cultural and legal debates about the treatment of dead victims of mass horror. On this account, we can become complicit in past, systemic subordination by dishonoring the memories of victims. Systemic neglect and exploitation of a group’s bodies and images can diminish the role of that group in shaping our national memory. And if it is wrong to deny a person the ability to leave a legacy on account of race under contemporary egalitarian norms, then we ought not engage in posthumous acts against the enslaved and other systemically debased persons that perpetually rob them of such a legacy.

Zappos Founder Tony Hsieh’s Friends, Family Feud Over His $500 Million Estate

It has been one year since the tragic death of Zappos found Tony Hsieh. Hsieh, who was known for being generous with his time and money, died with  Yet, Hsieh's assets are still tied up in court due to a feud between his friends and family. Some of the financial claims are based on deals scribbled on sticky notes. 

Tony Hsieh was known for "promoting happiness in the workplace and a fun-loving approach to making profits" died without a will. In the year of his death, Hsieh struggled with alcohol and drug use as well as mental-health issues. 

During this time, he spent most of his time in his mansion in Park City, Utah, along with an "entourage of people." The Park City mansion is where the walls were "covered with thousands of sticky notes detailing everything from life mantras to financial deals." 

The fact that Hsieh died intestate and with thousands of sticky notes with messages without context has made the court battle over his estate particularly difficult. Hsieh's family and friends are arguing over "who had Mr. Hsieh's best interest at heart, and who was out to use him for his wealth and connections." 

See Katherine Sayre, Zappos Founder Tony Hsieh’s Friends, Family Feud Over His $500 Million Estate, The Wall Street Journal, December 19, 2021. 

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

Article: Nova Scotia (Attorney General) v. Lawen Estate: Case Comment

Jane Thomson recently published an article entitled, Nova Scotia (Attorney General) v. Lawen Estate: Case Comment, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

Case comment on Nova Scotia (Attorney General) v. Lawen Estate in which the Nova Scotia Court of Appeal overturned an application judge's finding that testamentary freedom was a right protected under s.7 of the Charter of Rights and Freedoms. Additionally, the Court casts doubt on whether anyone involved in the administration of an estate, or a beneficiary of one, could bring a Charter challenge to legislation interfering with testamentary autonomy, based on public interest standing.

This is a pre-copy edited, post-peer reviewed version of the contribution accepted for publication in Estates, Trusts & Pensions Journal. Reproduced by permission of Thomson Reuters Canada Limited.

 

Article: Non-Fungible Tokens: What Every Estate Planner Needs to Know

Gerry W. Beyer recently published an article entitled,  Non-Fungible Tokens: What Every Estate Planner Needs to Know, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

Your client may own non-fungible tokens (NFTs) and ask you for estate planning advice. Would you be caught off-guard and give your client the classic “deer in the headlights” look? Obviously, that would not be prudent. To make sure this doesn’t happen to you, this article uses a FAQ approach to provide you with the background and information you need so that you will understand NFTs and how to give your client sage advice on how to handle them during the client’s lifetime and upon death.

Article: Death of the Breadwinner and the Continuation of the Duty of Spousal Support: Discrepancies and Inequalities for Different Categories of Surviving Partners

Elsje Bonthuys recently published an article entitled, Death of the Breadwinner and the Continuation of the Duty of Spousal Support: Discrepancies and Inequalities for Different Categories of Surviving Partners, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

This note considers the extension of the duty of spousal support after the death of the breadwinner by comparing the rights of different categories of surviving maintenance claimants, who tend to be mostly women: widows of the deceased, unmarried intimate partners of the deceased and ex-wives and partners of the deceased. Financial support can be provided from the deceased estate in the form of a right to share in the joint matrimonial estate, a right to intestate succession, a right to claim from the estate in terms of the Maintenance of Surviving Spouses Act and a right to claim for loss of support from third parties who caused the death of the breadwinner. In comparing different categories of women, it emerges that the law disproportionately benefits widows over other partners, while the rights of ex-spouses are gradually reduced by the jurisprudence. There is also a discrepancy between rights to claim against deceased estates, which favour widows, on the one hand, and rights to claim against third parties, which are available to a far larger group of surviving maintenance claimants, on the other hand. The note analyses the gendered causes and consequences of these differences.