Wills, Trusts & Estates Prof Blog

Inheritance tax debates overlook the psychology of the thing

Inheritance taxes have evolved beyond political associations. Some countries with competitive tax systems, like the United States and Ireland, have high inheritance tax rates, while India, China, and Russia, with diverse political systems, have a zero rate. This shift highlights that so called "death taxes" are no longer tied to political ideology, despite their historical links.

Inheritance and estate taxes are widely considered unfair, with a recent survey ranking them as the most unfair tax. However, very few deaths trigger an inheritance tax. For example, less than 4 percent of deaths in the UK result in an inheritance tax charge. These taxes are often ineffective revenue sources for governments because they are full of exceptions, and the wealthy can usually avoid them. In the UK, these taxes contribute less than 1 percent of tax revenues; in the US, federal estate taxes make up only 0.4 percent of government revenue.

However irrelevant inheritance taxes may be in the economic scheme of things, they excite us due to their close association with two themes that dominate our lives: mortality and family.

For more information see Stuart Kirk “Opinion: Inheritance tax debates overlook the pyscohology of the thing” Financial Times, September 29, 2023.

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

Prof. Lee-ford Tritt named Director of Tax Programs at the University of Florida Levin College of Law

Congratulations  to Lee-ford on his directorship!!

Here is Prof. Tritt's impressive bio from his faculty webpage:

Lee-ford Tritt, NYU School of Law, J.D., LL.M. (taxation), is a law professor at the University of Florida College of Law and the David H. Levin Chair of Law. In addition, Lee-ford is the Director of the Graduate Tax Programs, Director of the Center for Estate Planning, and Director of the Estate Planning Practice Certificate Program. Lee-ford is an Academic Fellow of the American College of Trust and Estate Counsel. In addition, Lee-ford has served in many positions for the ABA RPTE and Tax Sections. He also served as the President of the American Association of Law Schools’ Trusts & Estates Division as well as an advisor for the Committee on an Act on the Recovery of Stolen Cultural and Artistic Property for the National Conference of Commissioners on Uniform State Laws. Before joining UF College of Law in 2005, Lee-ford spent eight years in the New York City trusts and estates departments of Davis, Polk & Wardwell and Milbank, Tweed. Lee-ford’s strong commitment to students and the practice of law has helped earn him Professor of the Year for the academic years 2008/2009; 2009/2010; 2010/2011; 2011/2012, 2012/2013 and 2014/2015. In 2015, Lee-ford was honored with the John Marshall Bar Association’s College of Law Lifetime Achievement Award in Teaching. He has also been recognized as an Outstanding Mentor by BALSA in 2008, 2011, and 2015. In addition, he received the University of Florida’s Presidential Award for Excellence in Education in 2011 and the University’s Impact Award in 2012. Lee-ford has published several books and many academic articles. He is frequently cited as an authority in newspapers, magazines, and academic articles. Lee-ford is a frequent lecturer across the country on various estate planning and tax issues, including presentations for the ABA’s RPTE Law Section’s annual meetings, the ABA’s Tax Section’s annual meetings, the Heckerling Institute on Estate Planning, the Notre Dame Tax and Estate Planning Institute, and Bloomberg BNA Tax & Accounting.

The ACTEC Foundation Announces Mary Moers Wenig 2023 Student Writing Competition Winners

The following is from an ACTEC press release:

Washington, DC, September 26, 2023: John T. Rogers, Jr., President of The ACTEC Foundation, and Elizabeth A. Bawden and Gerry W. Beyer, Co-Chairs of the Legal Education Committee of The American College of Trust and Estate Counsel (ACTEC), are pleased to announce the winners of the 2023 Mary Moers Wenig Student Writing Competition ACTEC's Legal Education Committee focuses on the quality and relevance of trust and estate courses offered in law schools, strategies for incorporating skills training into courses, ideas for mentoring new lawyers in estate planning, the role of adjunct professors, and trust-and-estate-related scholarship, case law, statutory law, and current developments. The committee oversees the Mary Moers Wenig Student Writing Competition and organizes an every-other-year academic symposium on a topic related to estate planning. The panel of ACTEC Fellows who served as judges included Gerry W. Beyer, Karen Elizabeth Boxx, Jeffrey A. Cooper, Skip Fox, Wendy Gerzog, Anne-Marie Rhodes, Barbara A. Sloan, Douglas Stanley, John (Jack) A. Terrill, and Leonard (Lenny) J. Whitman. Three law students’ submissions stood out among the entries received and reviewed by a panel of ACTEC Fellows. Submissions came from students attending the following law schools: Arizona State University Sandra Day O'Connor College of Law Brigham Young University J. Reuben Clark Law School Campbell University Law School Louisiana State University Paul M. Hebert Law Center  Loyola University Chicago School of Law Maurice A. Deane School of Law at Hofstra University Pepperdine Caruso School of Law T. Randolph Harris, who chaired the judging process on behalf of the Legal Education Committee, offers: “As is the case every year, the selected papers were outstanding, and reflected novel approaches to thorny trust & estate issues.”  The ACTEC Foundation supports the annual legal writing competition to encourage law students to create scholarly works in the area of trusts and estates. The first-place winner receives a full-tuition scholarship to the Heckerling Graduate Program in Estate Planning at the University of Miami School of Law for the 2024-2025 or the 2025-2026 academic year, a $5,000 cash award and will have their work published in the ACTEC Law Journal. (Candidates must apply and be admitted as full-time students to qualify for the scholarship.) The second-place winner receives a $3,000 cash award, online publication—featuring their work on ACTEC’s website, and possible publication in the ACTEC Law Journal. Honorable mentions receive a $500 cash award. The 2023 Mary Moers Wenig Student Writing Competition Winners are:FIRST PLACE WINNER: Aaron Anderson for “Resolving Unfairness in a Fair Way: How the Grantor Trust Rules Should be Reformed” Brigham Young University J. Reuben Clark Law School “What an honor it is to be selected as the winner of the 2023 Mary Moers Wenig Student Writing Competition! I am grateful to The ACTEC Foundation for providing this opportunity. I thank Professor Rust Tippett for encouraging me to submit my article. I hope it contributes to the ongoing conversation about reforming the grantor trust rules,” said Anderson. SECOND PLACE WINNER: Ryan D. Tosto for “Unpacking the Digital Vault: Estate Planning Considerations for Non-Fungible Tokens" Arizona State University Sandra Day O'Connor College of Law “I am deeply honored to be awarded second place in the 2023 Mary Moers Wenig Student Writing Competition. My heartfelt thanks go out to the panel of judges and the staff for this recognition, and to the editors of the ACTEC Law Journal for consideration of publication. I hope my paper serves as a valuable resource, shedding light on the issues specifically relevant to NFTs and digital assets in the area of trusts and estates,” said Tosto. HONORABLE MENTION WINNER: Katie Giron for "Frozen Embryo Disposition After Death and Dobbs: Applying Testamentary Guardianship for Embryos in 'Personhood' States" Maurice A. Deane School of Law at Hofstra University “I am grateful to be awarded an honorable mention in the 2023 Mary Moers Wenig Writing Competition. Thank you to the judges, and to the editors of the ACTEC Law Journal for their consideration of my article. I hope my article will spark a conversation about the implications of granting 'personhood' status to cryopreserved embryos in the field of trust and estate law,” said Giron. About The ACTEC Foundation: The ACTEC Foundation is the philanthropic arm of The American College of Trust and Estate Counsel (ACTEC). The Foundation is a nonprofit, 501(c)(3), that promotes scholarship and education for families and professionals and supports students interested in the trust and estate area of the law. Through continued financial support, The ACTEC Foundation offers professional development, scholarships, and education for a number of important efforts, including legal education, educational support, public initiatives, legal publications and the student editorial board for the ACTEC Law Journal. About The American College of Trust and Estate Counsel (ACTEC): Established in 1949, The American College of Trust and Estate Counsel (ACTEC) is a national, nonprofit association of approximately 2,500 lawyers and law professors from throughout the United States and abroad. ACTEC members (Fellows) are peer-elected on the basis of professional reputation and expertise in the preparation of wills and trusts, estate planning, probate, trust administration and related practice areas. The College’s mission includes the improvement and reform of probate, trust and tax laws and procedures and professional practice standards. ACTEC frequently offers technical comments with regard to legislation and regulations but does not take positions on matters of policy or political objectives.

Dianne Feinstein: 'Pioneering' Senator dies aged 90

Dianne Feinstein, the California Senator who served for more than three decades and was the oldest member of Congress, has died at age 90. Her office released a statement that she passed away overnight at her home in Washington, DC.

Feinstein had recently faced questions of alleged cognitive issues and was admitted to the hospital in April after a “minor fall.” The Senator also made headlines recently for mounting family tensions over her late husband’s estate.

Born in 1933, Feinstein grew up in San Francisco and graduated from Stanford University. Her first public role was being elected to the San Francisco County Board of Supervisors in 1969. She later became San Francisco’s first female mayor and was elected to the Senate in 1992. She was the first woman to chair the Senate Intelligence Committee, the first woman to sit on the Senate Judiciary Committee, and the first female chair of the Senate Rules Committee. President Biden released a statement earlier this morning calling Feinstein a “pioneering American,” “a true trailblazer,” and “a cherished friend.”

Feinstein is survived by a daughter, San Francisco County Superior Court Judge Katherine Feinstein.

For more information see Bernd Debusmann Jr “Dianne Feinstein: ‘Pioneering’ Senator dies aged 90” BBC, September 29, 2023.

A Tale of Family Intrigue and Inheritance

Despite Pierre Cardin's extensive accomplishments and brand success, the fashion designer never discussed the future of his company before he died in 2020, leaving the situation uncertain. His failure to plan for his company's future has resulted in a complex legal battle involving 22 of his grandnieces and grandnephews. Cardin has no direct heirs. His longtime partner, André Oliver, passed away in 1993.

On one side of the legal battle is Rodrigo Basilicati-Cardin, a 52-year-old Italian who is the grandson of Cardin's older brother, Erminio. Rodrigo adopted the Cardin name in 2018 and has worked for Cardin for over two decades. He insists that he is the rightful heir. Since 2020, he has held the position of general manager of the holding company Pierre Cardin Evolution and serves as the artistic director of the Pierre Cardin brand. 

Meanwhile, on the other side, 19 cousins from six family branches aim to sell the company and receive financial gains. Among them, four cousins, namely Patricia, Laurence, Régine, and Marie-Christine, the granddaughters of Pierre Cardin's sister, Giovanna Cardin, have taken legal action by filing civil lawsuits and criminal complaints against Rodrigo Basilicati-Cardin. They have accused him of various crimes, including elder abuse and forgery, although Basilicati-Cardin denies these allegations.

For more information see Dana Thomas “A Tale of Family Intrigue and Inheritance” The New York Times, September 25, 2023.

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

Article: Son Preference in Testate Succession: An Empirical Study of Estate Distribution in Wills

Yun-chien Chang (Cornell Law School,) Sieh-Chuen Huang (National Taiwan University- College of Law,) Su-Li Her (Notary Public Office) published an Article, Son Preference in Testate Succession: An Empirical Study of Estate Distribution in Wills, 2023. Provided below is the Abstract:

Despite a plethora of normative discussions on gender equality as well as empirical studies on gender discrimination and gender effects in various settings, there is a paucity of large-scale empirical studies on son preference by ordinary people in asset distribution. Using an idiosyncratic data set on more than 1800 notarized or authenticated wills in Taiwan, this article investigates whether testators show son preference in distributing estates in wills, and if so, what the driving factors are. It finds that son preferences exist in no more than 29% of the studied wills. Moreover, no matter whether son preference is broadly or narrowly defined, and no matter whether the sample is limited to land distribution or not, the pattern is consistent: aboriginal people exhibit less son preference, as they are matrimonial; female testators do not tend to favor sons; in wills distributing more valuable estate and those distributing land, son preference is more pronounced. Notarized wills tend to contain son-preferring provisions, likely because the formal validity of notarized wills is usually upheld if disputes arise, and male-preferring provisions often violate the mandatory share law. Thus, testators, when preparing a will that favors their sons, elect to notarize their wills. Finally, the strategic bequest theory explains the testator decisions in some wills but the altruism theory barely explains the estate distribution in any wills.

How Do You Deal With a Windfall in Your 20s?

Receiving a significant financial windfall is often seen as a life-changing event, but it doesn't guarantee a positive transformation. Some may be able to make big purchases or travel, but it can also overwhelm those who receive it after a loss or need to be more experienced with managing large sums of money. The newfound freedom a windfall brings can also disorientation, particularly for those whose peers are still early in their careers, dealing with student debt, and can't relate to the sudden responsibility of managing a significant sum, often reaching five or six figures.

Gina Knox, who received a large sum of money in her early 20s, now counsels others about managing their money.

"If you don't know what to do with it, it is vitally important to do nothing," she said. "Ask a family member or financial adviser when you have large sums of money you are strategically or emotionally not prepared to deal with. Spend some time imagining what you want your life to be."

For more information see Caitlin Kelly “How Do You Deal With a Windfall in Your 20s?” The New York Times, August 19, 2023.

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

 

Article: Marvin Claims at Death

Professor Patricia Cain has published an article titled Marvin Claims at Death, that analyzes the post-mortem division of assets from unmarried partners. For an additional description, please find the abstract below.

In 1976, the California Supreme Court handed down its decision in Marvin v. Marvin, recognizing the enforcement of contract and equitable claims that could be asserted when an unmarried partnership was dissolved. Most states have followed the basic holding in Marvin, although important differences in state law have developed over time. Recently, the Uniform Law Commission has approved a uniform act dealing with these issues, the Uniform Cohabitants' Economic Remedies Act (UCERA) Much has been written about the rights that unmarried partners can assert against each other. Most of the scholarship has focused on the rights that arise when a partnership dissolves during the lifetime of the partners. This essay will focus, instead, on claims to Marvin rights that are asserted after the death of one partner, typically in probate court. Many of the issue that arise in these cases are similar to the issues that arise in cases involving lifetime dissolutions. But there are some differences. This essay will focus on the difference that can arise in the enforceability of such claims, in the identification of the applicable statute of limitations, and on whether or not the payment of such claims by an estate can be deducted for estate tax purposes.

New Netflix Comedy Showcases Estate Planning Claims

"Fisk" is an Australian comedy series now streaming on Netflix that gained popularity after its release to American markets last month. Netflix has tagged the series as "Family feuds. Money squabbles. Wobbly furniture. A no-nonsense lawyer joins a low-rent wills and probate firm after her marriage and career implode."

The show revolves around Helen Tudor-Fisk, a former contract lawyer in Sydney who moves back to Melbourne following her husband's infidelity, where she lands a job at a suburban estate law agency called Gruber & Gruber. The series explores the quirky dynamics among the characters in this workplace comedy and shines a spotlight on esate planning claims.

FTX Bankruptcy Estate Sues SBF’S Parents Who Are Both Tenured Stanford Law Professors

FTX is currently undergoing bankruptcy proceedings and has taken legal action against the parents of Sam Bankman Fried, who are both Stanford Law professors, suggesting that they had a more extensive involvement in FTX than previously reported by the media. They have been accused of various wrongdoings, including breaches of fiduciary duty, unjust enrichment, aiding and abetting, and fraudulent transfers.

For more information see Jeffrey Skatoff “FTX Bankruptcy Estate Sues SBF’s Parents Who Are Both Tenured Stanford Law Professors” Probate Stars, September 19, 2023.