Wills, Trusts & Estates Prof Blog

Directions to Trust Directors of Directed Trusts

Directed trusts have been gaining popularity in recent years as many states allow someone other than the trustee the power over some aspect of a trust’s administration. The Uniform Law Commission introduced the Uniform Directed Trust Act (UDTA) to provide clear guidelines that allow a settlor to structure a directed trust for any situation while preserving safeguards for beneficiaries.

The increasing number of variables that go into estate planning mean directed trusts are more important than ever. Understanding the governing law and situs for a directed trust and how they vary by jurisdictions is paramount.

For more Information:

See Michael A. Sneeringer and Jordan D. Veurink, “Directions to Trust Directors of Directed Trusts”, ABA Probate & Property Magazine, May/June 2022.

 

Article: Increase Your Toolbox: Lesser-Known Sanctions in Probate and Trust Litigation

Jani Mauer recently published an article entitled, Increase Your Toolbox: Lesser-Known Sanctions in Probate and Trust Litigation, Quinnipiac Probate Law Journal, 2022. Provided below is an abstract of the Article:

You represent a petitioner seeking appointment as a personal representative or a court appointed personal representative. An Objection to the Petition for Administration or a Petition to Revoke Probate is filed. Your client insists that the assertions of the opposing party are false, unfounded, or otherwise lack merit. Or perhaps you represent an interested party who is horrified that a certain will or codicil is offered for or admitted to probate or is appalled by the actions or inactions of a personal representative. Disputes may arise in estate administration about a creditor's rights, a beneficiary's rights, or other matters.

Similarly, unjustified litigation may be filed against the trustee of a trust, or defenses lacking merit may be asserted in litigation instituted by a trustee. Irrespective of the identity of your client, he or she will typically not want to bear the ultimate burden of legal fees. Where the client is the personal representative, he will likely oppose the estate being diminished by payment of legal fees. Even if the personal representative is not a beneficiary of the estate, his fiduciary obligations require him to preserve the estate assets for the beneficiaries, causing resistance to paying attorney's fees. Similarly, a trustee owes a duty to beneficiaries to preserve trust assets and to protect them from depletion by unnecessary litigation. Clients seek a remedy either to prevent the adverse party's perceived wrongful conduct, or to recover legal fees and expenses caused by that conduct in estate and trust administration and litigation. Volumes have been written about payment or recovery of legal fees in the probate or trust context under Florida Statutes sections 732.2145(2)(b), 733.106, 733.609, 733.612(19), 733.3101(3), 733.6171, 733.6175, 736.0206, and 736.1004 to 736.1007. The statutes expressly authorizing liability, payment, or imposition of fees are thus not addressed in this Article. In some cases, it may be appropriate to seek imposition of fees on the wrongdoer under Florida Statutes section 57.105 or to pursue other remedies.

Part I of this Article explores when attorney's fees and costs are likely to be awarded under Florida Statutes section 57.105 in trust and estate administration and litigation; what actions counsel might take in handling estate disputes to protect both counsel and the client from liability under Florida Statutes section 57.105; and actions recommended or required if sanctions are sought to be imposed under that statute. Legal fees may be recoverable in probate under statutes other than Florida Statutes section 57.105, or under common law, or other rules.1 Accordingly, this Article also considers coordination of a request for an attorney's fee award under section 57.105 and other laws. Part II of this Article addresses the inequitable conduct doctrine as an alternative to Florida Statutes section 57.105 to recover legal fees and costs as a sanction. Part III of this Article examines the vexatious litigant in the probate and trust context.

Article: EU Private International Law in Family and Succession Matters: The Hungarian Judicial Practice

Csongor István Nagy recently published an article entitled, EU Private International Law in Family and Succession Matters: The Hungarian Judicial Practice, Pécs Journal of International and European Law, 2021. Provided below is an abstract of the article:

This article is based on the Hungarian strand of the multiyear CEPIL project (“Cross-Border Litigation in Central-Europe: EU Private International Law before National Courts”) carried out with the generous support of the European Commission Directorate General Justice and Consumers. One of the leading considerations behind the CEPIL project was that the value of private international law (PIL) unification can be preserved only if EU private international law (EU PIL) instruments are applied correctly and uniformly, hence, the European endeavors in the field should not and cannot stop at statutory unification but need to embrace the judicial practice and make sure that besides the vertical communication between the CJEU and national courts, there is also a horizontal communication between national courts, authorities and the legal community in general. The purpose of this publication is to contribute to this horizontal communication between Member State courts by providing an analytical insight into the Hungarian case-law on EU PIL instruments in family and succession matters.

Federal agency asks 100-year-old Florida woman to prove she’s alive after checks stop.

For over 20 years, Betty Ashley has received payments from the annuity of her late husband who served as a U.S. Postmaster. Without warning, the payments stopped.

When Ashley, who will be 101 next month, looked into the missing payments the U.S. Office of Personnel Management (OPM) asked for proof of life. The request was puzzling as Ashley walked the Gasparilla 5k in her 90s and served as Grand Marshal this year. But according to Ashley’s daughter, a representative from OPM responded with “She’s 100 years old. Why would we think she is still alive?”

Ashley sent in a picture of herself with the current newspaper, however, that has not been enough to unlock payments.

For more Information:

See Walt Buteau, “Federal agency asks 100-year-old Florida woman to prove she’s alive after checks stop," Everything Lubbock, May 27, 2022.

Don’t Want to Leave Money to Your Kids? You’ll Probably Change Your Mind.

Some parents fear leaving too much money behind for their children, citing concerns of ruining their desire for a productive life or that they may utilize funds inappropriately. However, there are certain controls that can be put into place to assuage fears of misuse.

Trusts are a useful tool where parents can use a trustee so that their children don’t have full access to all of the funds at once. There are options to designate that funds be used for education, living expenses, or starting a business instead of being an open pot of money. Ultimately, communication is key to avoid conflict and parents need to understand that overtime, situations may change and leaving behind flexibility for their children can be useful.

For more Information:

See David Handler, J.D., Howard Sharfman, “Don’t Want to Leave Money to Your Kids? You’ll Probably Change Your Mind,” Kiplinger, May 26, 2022.

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

Article: Was It Wise to Try to Implement Trust Law Reforms Through the Uniform Prudent Management of Institutional Funds Act?

C. Boone Schwartzel authored an article entitled, Was It Wise to Try to Implement Trust Law Reforms Through the Uniform Prudent Management of Institutional Funds Act?, Estate Planning & Community Property Law Journal, 2022. Provided below is an abstract of the Article:

This article explores two main topics. First, it generally discusses the Uniform Prudent Management of Institutional Funds Act’s new definitions and expanded scope, and then examines whether under the Act, as a matter of law, restrictions imposed in a gift instrument between a “donor” institution and a second, affiliated institution it controls must be respected and enforced (and the fund assets treated as “donor restricted”) even though generally accepted accounting principles may take a different view.

Second, the article examines UPMIFA’s new statutory remedies that empower courts and charitable institutions to modify much more easily a donor’s outdated or “wasteful” restrictions. UPMIFA’s remedies are loosely patterned after controversial reforms of trust law’s equitable deviation and cy pres doctrines, as promulgated in the Uniform Trust Code and the Restatement (Third) of Trusts, that loosen their historical ties to the donor’s original charitable intent and virtually eliminate cy pres’ “general charitable intent” requirement. There are important public policy issues and constitutional law questions concerning the wisdom and validity of these reformed trust law remedies, and especially as implemented in UPMIFA.

 

 

Article: The Slayer Rule: An Empirical Examination

Fredrick E. Vars authored an article entitled, The Slayer Rule: An Empirical Examination, ACTEC Law Journal, Forthcoming Spring 2023. Provided below is an abstract of the Article:

Elmer Palmer murdered his grandfather. The undisputed motive was money. The grandfather’s will included a large gift to Elmer, which the grandfather was poised to eliminate. Elmer acted first. Under the law at the time, Elmer would inherit despite having intentionally killed his grandfather: the existing will controlled. Unfortunately for Elmer, the New York Court of Appeals announced a new equitable principle: Murderers cannot inherit from their victims. Since this famous decision in 1889, some version of the “slayer rule” has been adopted by nearly every state and lauded by nearly every commentator. Still, important questions about the proper scope of the slayer rule remain unanswered. Case law and scholarship identify multiple rationales for the slayer rule, which push in different directions in difficult applications.

This study is the first to empirically test key assumptions underlying the slayer rule. Over a thousand survey respondents answered the question “What’s fair?” or “What would the decedent want?” in twelve different scenarios. Some of the most significant conclusions are that the slayer rule should not apply to assisted suicide, killings in self-defense, or killings due to mental illness. On the other hand, the slayer rule should be expanded beyond murder in some circumstances, such as elder abuse and neglect. And the slayer rule should be converted from a mandatory rule into a default rule, which testators could opt out of in their wills. Carefully probing what people think about the slayer rule illuminates its many aspects and points toward needed reforms.

The celebrity love affair with NFTs may be just beginning -- even amid flops and doubts

Celebrities, sports stars, and even sports teams have taken to promoting cryptocurrency or non-fungible token partnerships. With big names like Madonna, Snoop Dogg, and Paris Hilton, these partnerships have drawn criticism for falling flat with fanbases as this exclusive market is largely available only to the wealthy.

Benjamin Behrooz focuses on NFT partnerships at Branding Los Angeles, a company he founded. He recognizes the awkward stage that the crypto space is seeing now, but predicts that it won’t be long before major retailers accept cryptocurrency payments. In the meantime, as crypto continues to grow, we will see stars of all types enter this space with the hopes of leading their fanbase “into the future.”

For more Information:

See AJ Willingham, “The celebrity love affair with NFTs may be just beginning -- even amid flops and doubts," CNN Entertainment, May 19, 2022.

Article: Negotiating New Curves Along Chancery Lane: Four More Questions on Fiduciaries

Weiming Tan recently published an article entitled, Negotiating New Curves Along Chancery Lane: Four More Questions on Fiduciaries, Trust Law International, 2021. Provided below is the abstract:

This article explores four essential questions that have emerged from recent case law governing fiduciaries. The questions raised form a composite inquiry into fiduciary regulation. Firstly, is there a shift in the fiduciary paradigm? The courts have shown an eagerness to test the boundaries of the fiduciary status, both in expanding and withdrawing the status for different appointments. Secondly, is there an expansion of fiduciary duties beyond the “no-conflict” and “no-profit” duties? Thirdly, what is the “irreducible core” – if any – of fiduciary obligations? This article contends that fiduciary duties can be classified into “selflessness oriented” and “competence oriented” duties, with the former constituting the “irreducible core”. Lastly, what are the exceptions to the “non-intervention” principle? The courts normally accord a wide margin of appreciation to a fiduciary’s exercise of discretion. Besides the “breach of fiduciary duty” exception, this article suggests that equity can draw inspiration from administrative law in the regulation of public officials.

How to set up Legacy Contacts for your Online Accounts: Make sure family can access important data or photos after you’re gone

What happens to our online accounts after we die? Tech companies are addressing just this by adding features known as legacy contacts. Before utilizing legacy settings on your various accounts, it is important to consider who you trust and want to be in charge of your digital legacy, in addition to other factors like what data you want to give them access to. 

There is no industry standard on how to approach legacy contacts and each company has taken a slightly different approach. For more information and how-to guides:

See Heather Kelly, “How to set up Legacy Contacts for your Online Accounts”, The Washington Post, May 20, 2022.

Special thanks to Naomi Cahn (Justice Anthony M. Kennedy Distinguished Professor of Law, University of Virginia School of Law) for bringing this article to my attention.