Wills, Trusts & Estates Prof Blog

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

Sunday, January 21, 2024

Article: Citizenship and Solicitude: How to Overrule Employment Division v. Smith and Washington v. Davis

Christopher R. Green (University of Mississippi School of Law) recently published, Citizenship and Solicitude: How to Overrule Employment Division v. Smith and Washington v. Davis, Harvard Journal of Law and Public Policy, Forthcoming. Provided below is an Abstract:

This article looks to the original meaning of the Fourteenth Amendment’s provisions on equal citizenship to defend an approach to the free exercise of religion distinct both from Employment Division v. Smith and the Sherbert/Yoder regime it replaced. Members of all religious groups are equally citizens: in the first Justice Harlan’s words, a “component part of the people for whose welfare and happiness government is ordained.” Such citizens are entitled to equal solicitude from their states regarding even indirect costs of that state’s laws. Like trustees, states must affirmatively promote the interests of their citizens, not merely avoid targeting them for ill treatment. The same goes for burdens on different racial groups. Contrary to Smith, therefore, the Fourteenth Amendment requires more than a no-religious-targeting rule. And contrary to Washington v. Davis, it requires more than a no-racial-targeting rule.

The Court was right in both Smith and Washington, however, that strict scrutiny for any law causing significant impacts on racial or religious groups would threaten chaos. A refusal to countenance any impact on religious practices, no matter how harmful, would allow religious citizens to be a law unto themselves. A refusal to countenance any disparate impact on racial groups would require racially-discriminatory quotas that would themselves undermine equal citizenship. The Fourteenth Amendment requires a more nuanced assessment of the arbitrariness of the distinctions in state law and the costs they impose than a one-size-fits-all “compelling state interest” framework can supply. Instead of focusing solely on explicit or purposeful classifications, the Court should focus directly on the existence of adequate explanations for policies causing particular harms, the way it assesses “arbitrary and capricious” agency action in cases like Citizens to Preserve Overton Park v. Volpe and Motor Vehicle Manufacturers v. State Farm. The trigger for such an inquiry would not be the nature of the classification at issue, but simply the existence of the impact on particular citizens’ interests, economic interests included. The Fourteenth Amendment requires states to offer an adequate explanation why other citizens’ interests matter more than the ones suffering the burden, and would require states to present their actual reasons for decisions, rather than hiding behind post-hoc judicial rationalizations as approved in Williamson v. Lee Optical. Such an approach fits how the law of trusts has long dealt with multiple beneficiaries.

January 21, 2024 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Saturday, January 20, 2024

For older women with money, it’s yes to love but ‘I don’t’ to marriage

Estate planningThere is a growing trend among older women, particularly those with financial independence, to choose not to marry. Despite maintaining romantic relationships, many women, including widows, divorcées, and professionals with substantial wealth, are unwilling to merge their assets through marriage legally. Approximately one-third of the 22 million U.S. households with a net worth of $1 million or more are led by women, often achieving this milestone by age 58. The shift is attributed to these women being the first generation to accumulate significant wealth in 401(k) plans. They question the necessity of giving up financial autonomy in the name of marriage. 

For example, a 65-year-old doctor named Christen, who is financially independent. Despite being in a committed relationship for over a decade, she and her partner choose not to marry, citing reasons such as tax implications, maintaining separate homes, and preserving their respective inheritances for their children.

Financial considerations, including Social Security benefits, retirement benefits, alimony payments, and health insurance coverage, play a crucial role in the decision-making process. Often seeking advice from financial advisers, older women grapple with societal expectations and the pros and cons of marriage regarding their money. Some opt for legal alternatives to address financial questions, while others may marry for religious, moral, or ethical reasons, exploring ways to protect their assets through trusts. The author acknowledges that love-driven decisions may overlook critical financial aspects, prompting some individuals to reconsider the traditional institution of marriage.

For more information, see Roxanne Roberts “For older women with money, it’s yes to love but ‘I don’t’ to marriage”, The Washington Post, January 16, 2024.

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

January 20, 2024 in Estate Planning - Generally | Permalink | Comments (0)

Friday, January 19, 2024

Probate lawyer says he's out of money and trying to withdraw from cases of 800-plus clients

Estate planningProbate lawyer Dennis Szafran in Tampa, Florida, closed his law firm abruptly and informed Judge Sherwood Coleman that he had been diligently trying to file withdrawal motions for over 800 clients. 

Szafran claimed no funds or assets in his name, firm name, or trust account. Some clients allege not receiving refunds after the firm closure, with the Florida Bar investigating the matter. The Hillsborough County Sheriff's Office has also initiated an investigation. Judge Coleman emphasized Szafran's continued accountability for his responsibilities despite the firm's closure. Szafran declined to comment to news outlets and has not responded to inquiries from the ABA Journal.

For more information, see Debra Cassens Weiss "Probate Lawyer says he's out of money and trying to withdraw from cases", ABA Journal, January 17, 2024.

January 19, 2024 in Estate Planning - Generally | Permalink | Comments (0)

Thursday, January 18, 2024

Pennsylvania Appellate Court Issues Important Win For Parents Using Assisted Reproduction

ChildrenIn a landmark December 11, 2023 ruling, the Superior Court of Pennsylvania overturned a prior decision in Junior v. Glover, favoring the nonbiological parent, Nicole Junior. The case involved a same-sex couple who utilized assisted reproduction to conceive a child. Despite the couple's joint efforts and various agreements to secure parental rights, they separated before the child's birth, triggering a legal dispute. The initial three-judge panel had denied parental recognition to Junior, citing the absence of an enforceable agreement. However, the court, led by Judge J. Bowes, identified an enforceable oral contract between the parties, supporting Junior's claim as a legal parent.

The court explored multiple parentage theories, including the marital presumption, intent-based parentage, and parentage by estoppel. Despite the couple's short marriage and ongoing divorce proceedings, the court did not apply the marital presumption in Junior's favor. However, it endorsed the doctrine of "intent-based parentage," a legal theory recognizing parentage based on the parties' intentions in assisted reproduction cases. The decision faced objections from a concurring judge who argued against the appellate court introducing new legal doctrines.

While supporters hailed the ruling, an appeal to Pennsylvania's highest court was filed by Glover. The outcome of the appeal could further solidify the recognition of parentage by intent in assisted reproduction cases, providing crucial protections for same-sex couples and individuals using fertility treatments. The case underscores the significance of legal precautions for same-sex couples and parents navigating assisted reproduction methods to ensure the recognition of their parental rights.

For more information see Ellen Trachman “Pennsylvania Appellate Court Issues Important Win For Parents Using Assisted Reproduction”, Above the Law, January 17, 2024.

January 18, 2024 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, January 17, 2024

The Charitable Trust Doctrine: Application to Unrestricted Gifts

Richard A. Newman (ArentFox Schiff) recently published, The Charitable Trust Doctrine: Application to Unrestricted Gifts, ABA Probate & Property Magazine, January/February 2023. Provided below is an Abstract:

At common law, assets held by charitable nonprofit organizations are generally understood to be held by such organizations in trust for public benefit. See A. Curreri, Charitable Trusts Definitions and History--Purpose--Beneficiaries--Cy Pres Doctrine, 9 St. John’s L. Rev. 114 (Dec. 1934). This principle, called the “Charitable Trust Doctrine,” is mirrored in the Internal Revenue Code’s prohibition on organizations recognized as public charities for tax purposes from using more than an insubstantial portion of their assets for private benefit. I.R.C. § 1.501(c)(3)-1(c)(i). Although this principle is broadly recognized throughout the United States (see Harold L. Kaplan, Patrick S. Coffey & Rosemary G. Feit, The Charitable Trust Doctrine: Lessons and Aftermath of Banner Health, 23 Am. Bankr. Inst. J., no. 4, May 2004, at 28), the extent of its reach in shielding assets from the claims of creditors is unclear.

Two areas associated with the application of the Charitable Trust Doctrine in particular remain unclear: First, does the Charitable Trust Doctrine shield only assets that are restricted (expressly by the donor or by implication) to a narrow or specific charitable purpose of a charitable nonprofit corporation or does it shield unrestricted assets as well; and second, if such shield is narrowly applied to only “restricted” assets, how is such shield to be applied to an asset that derives from both restricted gifts and unrestricted gifts?

In this article, we outline the Charitable Trust Doctrine generally and provide examples of how it raises concerns in certain real-world settings. We then survey case law attempting to apply the Charitable Trust Doctrine in both bankruptcy and nonbankruptcy settings. Finally, we survey case law attempting to apply the Charitable Trust Doctrine to assets that derive from both restricted and unrestricted sources and suggest some (tentative) conclusions and suggestions for practitioners.

January 17, 2024 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, January 16, 2024

Solving Generation-Skipping Transfer Tax Problems: Five Practical Remedies to Resolve Exemption Allocation Issues

Carol Warley, Abbie M. B. Everist, Amber Waldman, and Rachel Ruffalo (Washington National Tax) recently published, Solving Generation-Skipping Transfer Tax Problems: Five Practical Remedies to Resolve Exemption Allocation Issues, ABA Probate & Property Magazine, January/February 2023. Provided below is an Abstract:

The intricacies of estate planning often bring to light a range of complex tax considerations, including the generation-skipping transfer tax (GSTT). Understanding the implications associated with the imposition of the GSTT is crucial when reviewing an estate plan, as it can significantly affect the distribution of wealth and the preservation of family assets.

The allocation of a transferor’s generation-skipping tax (GST) exemption protects transfers from the GSTT. The inclusion ratio of a trust, calculated under IRC § 2642(a), determines the portion of the trust assets that is subject to GSTT. The 40 percent flat GSTT is imposed on three triggering events: (1) a direct skip with no remaining GST exemption available under section 2612(c), (2) a taxable distribution from a trust with an inclusion ratio other than 0.000 under section 2612(b), and (3) a taxable termination of a trust with an inclusion ratio other than 0.000 under section 2612(a).

Below, we delve into five common GST exemption allocation problems that may arise when reviewing the GST status of a trust. We then provide suggested remedies to mitigate potential unintended consequences.

January 16, 2024 in Articles, Estate Planning - Generally, Generation-Skipping Transfer Tax | Permalink | Comments (0)

Monday, January 15, 2024

Prince’s Heirs Go to Court in Latest Round of Infighting Over Estate

PrinceIn the latest legal battle over Prince's estate, four of the artist's heirs are facing a lawsuit from two former business associates, L. Londell McMillan and Charles Spicer. The lawsuit, filed in Delaware court, revolves around control of Prince Legacy LLC, one of the holding companies managing Prince's $156 million estate. 

The plaintiffs allege that the family members are attempting to exclude them in violation of a prior agreement, posing a threat to the preservation of Prince's legacy. The defendants, including Prince's half-sisters and niece, are accused of lacking business and management experience, potentially causing harm to the company's goodwill and revenue streams.

 The legal disputes over Prince's estate have been ongoing since his death in 2016, further complicated by the absence of a will.

For more information see Jem Aswad “Prince’s Heirs Go to Court in Latest Round of Infighting Over Estate”, Variety, January 11, 2024.

January 15, 2024 in Estate Planning - Generally | Permalink | Comments (0)

Call for Papers: Constitutional Issues in the Trusts and Estates Field

The American College of Trust and Estate Counsel (ACTEC) announces a Call for Papers with a focus on constitutional issues in the trusts and estates field over the past 50 years, since the founding of the ACTEC Law Journal. This special issue of the ACTEC Law Journal will be devoted to considering how state and federal constitutions affect trust and estates scholarship and practice. 

Submissions might respond to past or pending Supreme Court cases, might predict the future impact of constitutional issues, and might consider state-focused topics. For example, in the federal constitutional context, Moore v U.S. is currently pending in the Supreme Court.  The decision – which will likely decide whether the Sixteenth Amendment imposes a realization requirement -- could have a significant impact on the constitutionality of a wealth tax, a mark-to-market regime, or perhaps a gain-at-death tax.  Another case to be decided this term that could be resolved on constitutional grounds and that could have an extraordinary impact on tax practice is Loper Bright Enterprises v. Raimondo (raising the question whether Chevron deference should be eliminated). Other recent Supreme Court cases raising constitutional issues of interest to the trust-and-estate community include North Carolina Dept. v Kimberly Rice Kaestner 1992 Trust, 139 S. Ct. 2213 (2019) (due process limitations on the state taxation of trusts located in another state), and Sveen v Melin, 138 S. Ct. 1815 (2018) (constitutionality of retroactive application of divorce-revocation statute). 

This issue will be comprised of multiple shorter articles (2500-5000 words).

Procedure for Submissions

Authors wishing to contribute to this special volume should email a brief proposal with estimated word count to: Professor David Horton, Editor, ACTEC Law Journal, at [email protected]. Please include “ACTEC Theme Volume” in the subject line of your e-mail.

Deadline to Submit Proposals: Wednesday, March 20, 2024

Selected articles will be published in the ACTEC Law Journal, Volume 50, Issue 1, with an anticipated publication date of December 2024. Final articles will be due by August 1, 2024.

January 15, 2024 in Scholarship | Permalink | Comments (0)

Sunday, January 14, 2024

Advance Directives: Drafting and Implementation

Allison R. Clapp (Stewart, Plant & Blumenthal) and Ashley F. Lanzel (Children’s National Hospital) recently published, Advance Directives: Drafting and Implementation, ABA Probate & Property Magazine, January/February 2023. Provided below is an Abstract:

An advance directive is a legal document that enables an adult client to (1) name one or more individuals as the client’s agent(s) or attorney(s)-in-fact to make health care decisions on the client’s behalf and (2) specify the client’s wishes with respect to his health care in certain circumstances.

Advance directives present a unique set of challenges for a lawyer who is experienced in drafting legal documents and advising about legal matters but who may have little knowledge or experience regarding medical issues. Because of the dual nature of this document as both a legal document and a medical document, the authors have joined together to combine their respective legal and medical knowledge to provide practical advice regarding how best to address clients’ interests in this important arena. This article will provide specific drafting tips for lawyers as well as recommended steps the client should take after signing an advance directive.

January 14, 2024 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Saturday, January 13, 2024

An Income Gap Is Jeopardizing Retirement for Millions of Americans

Estate planningThe New York Times columnist Paula Span recently addressed the challenges many middle-class Americans face, particularly older individuals with lower incomes. Drawing on research from the journal Health Affairs, Span highlighted a growing income gap among Americans nearing retirement. 

The study identified two middle-class tiers: an upper tier with an average of over $90,000 in annual resources and a lower tier averaging less than $32,000 annually. Over the past two decades, the lower tier has faced financial decline, experiencing a 5% drop in homeownership and a 31% decline in the upper middle class. 

Earnings for the working population rose by 27% in the upper tier but fell by 5% in the lower tier, adjusted for inflation. These financial setbacks threaten retirement security, with health and life expectancy implications. Lower-middle-class seniors are less likely to have employer-provided health insurance and report more chronic health conditions. The article highlighted the struggles of individuals like Monique Louvigny, a 64-year-old event coordinator who faced job loss at 57 and now navigates freelance work while carefully managing expenses to avoid sliding into poverty.

For more information see Soumya Karlamangla “An Income Gap Is Jeopardizing Retirement for Millions of Americans”, The New York Times, January 12, 2024.

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

January 13, 2024 in Estate Planning - Generally | Permalink | Comments (0)