Wills, Trusts & Estates Prof Blog

Article: Policy over Doctrine: A Brief History of US Trust Law

Lucas Clover Alcolea (University of Otago - Faculty of Law) recently published, Policy over Doctrine: A Brief History of US Trust Law, 2023. Provided below is an Abstract:

US trust law is unique because whereas in English law the settlor drops out of the picture once he has created the trust, in the US the settlor’s intentions remain paramount. This fundamental difference in turn permits the recognition of spendthrift trusts, whereby the beneficial interest cannot be alienated, in the US whereas in England such trusts are generally invalid. Similarly, whereas in English law the beneficiaries of absolute trusts, and on occasion discretionary trusts, can collectively implode the trust by forcing the trustee to convey the trust fund to them via a Saunders v Vautier application, this is generally not possible in the US. It is suggested that this key difference results from the fact that US law is, at heart, policy-based rather than doctrinal whereas the opposite is true for English law.

 

Identity thief claims to be behind Graceland foreclosure attempt: report

A man claiming to be the mastermind behind a scheme to foreclose Elvis Presley's Graceland mansion has revealed his involvement in an interview with The New York Times. The purported fraudster stated that he works with a crew that targets vulnerable individuals to steal properties using falsified documents. The attempt to auction Graceland was allegedly based on a forged loan agreement supposedly taken out by Lisa Marie Presley.

Riley Keough, the granddaughter of Elvis and sole heir to Graceland, challenged the foreclosure in court, asserting that the loan agreement was fraudulent. She obtained an injunction to halt the sale. The company behind the foreclosure attempt, Naussany Investments and Private Lending, claimed Lisa Marie owed them $3.8 million, but withdrew their claims after the court hearing.

The Tennessee Attorney General has launched an investigation into the matter. The alleged identity thief, who communicated with the Times via email, admitted to orchestrating the scam, targeting properties using forged documents. The case remains complex, with questions about the legitimacy of Naussany Investments and the authenticity of the documents used in the foreclosure attempt.

For more information see Michael Dorgan "Identity thief claims to be behind Graceland foreclosure attempt: report", Fox News, May 28, 2024.

NCBE adds limited Trusts & Estates coverage to NextGen Bar Exam

The National Conference of Bar Examiners recently announced:

From July 2026 through at least February 2028, trusts and estates concepts will appear on every NextGen exam in a performance task and may also be included in integrated question sets. During this period, trusts and estates concepts will be tested with the provision of legal resources.

This Life Insurance Lets the Very Wealthy Invest in Private Markets and Defer Taxes

Estate planning has come a long way, adapting to the needs of wealthy individuals who face complex financial challenges. One innovative tool in this area is Private Placement Life Insurance (PPLI). Unlike regular life insurance, PPLI lets wealthy people invest their premiums in options like hedge funds and private equity. This makes PPLI a powerful tool for estate planning, helping to grow and preserve wealth for future generations while reducing taxes.

The biggest advantage of PPLI is its tax benefits. Investments within a PPLI policy grow without being taxed until they are withdrawn. Additionally, the death benefit is usually paid to beneficiaries without any income tax, which can save a lot of money compared to other investments. For the very wealthy, these tax savings can make a big difference, increasing the amount of money passed on to heirs. By using PPLI, individuals can manage their estate’s tax exposure more effectively, ensuring more wealth is preserved.

PPLI also offers asset protection benefits. The assets in a PPLI policy are usually safe from creditors, providing an extra layer of security for the policyholder’s wealth. This is particularly useful for people in high-risk professions or those with significant personal assets. PPLI policies can be customized to meet the specific needs and risk preferences of the policyholder, making them a flexible tool for estate planning. By using PPLI, the wealthy can manage their investments wisely, protect their assets, and optimize their estate plans, ensuring their financial legacy remains strong and secure.

For more information see Andrea Riquier "This Life Insurance Lets the Very Wealthy Invest in Private Markets and Defer Taxes", Barrons.com, May 14, 2024.

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

Valve confirms your Steam account cannot be transferred to anyone after you die

Valve has confirmed that Steam accounts cannot be transferred to another person after the account holder's death. This policy means that the ownership of a Steam account and its associated game library remains non-transferable, even if specified in a will. Users are prohibited from sharing account access, merging contents with another account, or providing another person with their login details according to Steam's Terms of Service​.

This confirmation has sparked discussions among gamers regarding the implications of digital ownership. Many users express frustration, noting that significant investments in game libraries are effectively lost upon death. Some have suggested informal solutions like leaving login credentials to family members, although this technically violates Valve's policies and could result in account deactivation​.

The policy highlights a broader issue in digital asset management, contrasting with some other digital services that offer legacy options. As digital ownership becomes more prevalent, there may be increasing calls for legal and policy changes to address these concerns and provide clearer solutions for digital inheritance​.

For more information see Kishalaya Kundu "Valve confirms your Steam account cannot be transferred to anyone after you die", TechSpot, May 27, 2024.

Article: A Comparative Perspective on the Liability of Heirs

Miloš Vukotić (University of Belgrade Faculty of Law) recently published, A Comparative Perspective on the Liability of Heirs, 2024. Provided below is an Abstract:

Settlement of deceased’s debts is one of the fundamental questions of succession. The liability of heirs for these debts is very difficult to regulate because of the need to balance several conflicting interests: the interests of heirs, the interests of estate creditors and the interests of heirs’ personal creditors. Legal systems may attempt a simple, but rigid approach to heirs’ liability or provide detailed and flexible, but complex rules on different scopes of liability in different situations. This article discusses the main approaches to liability of heirs for estate debts and provides a critical analysis of their advantages and disadvantages. The author concludes that complex and flexible rules on liability of heirs may ultimately lead to more just distribution of estate assets.

Article: Characteristic Uses of Trusts: A Response to Bennett & Hofri

David Frydrych (Monash University - Faculty of Law) recently published, Characteristic Uses of Trusts: A Response to Bennett & Hofri, 2024. Provided below is an Abstract:

In a recent article (OJLS 2021), Mark Bennett and Adam Hofri claim that the ‘characteristic use’ of trusts is to subvert other areas of law. This is mistaken. For one thing, their theory is sometimes really concerned with those other areas of law, e.g., tax. Further, their approach mystifies by framing matters as a conflict between trusts versus property, tax, etc., when determining a system’s real stance instead requires seeing how all relevant legal rules and norms operate in the aggregate. Their theory sometimes also treats different jurisdictions’ laws as if they serve a single legal system, which ignores the reality of jurisdictional competition. This article additionally scrutinises some methodological bases for ‘normative’ theorisation about private law, and then assesses Bennett and Hofri’s arguments about whether the impugned trust laws and practices are justifiable.

Article: Trusts Jurisdiction Clauses: An Analysis

Ying Khai Liew (University of Melbourne - Melbourne Law School), and Richard Garnett (University of Melbourne - Melbourne Law School) recently published, Trusts Jurisdiction Clauses: An Analysis, 2024. Provided below is an Abstract:

While jurisdiction clauses, or choice of court agreements, are increasingly utilised in trust deeds, the common law rules which apply to these clauses are far from clear. In comparison to the contractual context, the use of jurisdiction clauses in the trusts context is relatively more recent, and the relevant authorities are sparse. This situation is a source of concern, since the present state of the law detracts from the very reason for which a jurisdiction clause is frequently used in modern trusts practice, namely, the attainment of certainty. Therefore, it is important that this area of law is properly analysed, and its principles carefully stated. This article begins first by discussing the contractual position, since the rules which apply in that context are often adopted, adapted, or taken as a point of comparison in trusts cases. It then discusses the three relevant questions which arises in relation to jurisdiction clauses in the trusts context, namely the existence, scope, and enforceability of a jurisdiction clause. The final section concludes the article.

Steve Wozniak: When I die, these are the moments I want to remember—they don't involve co-founding Apple

Steve Wozniak won't measure his happiness by Apple's market cap or his net worth at the end of his life. Instead, he values the laughter and memories shared with loved ones. During a commencement speech at the University of Colorado Boulder, he urged graduates to prioritize joy over accomplishments.

Wozniak shared an anecdote about ex-Viacom CEO Sumner Redstone, highlighting the futility of wealth and power. He concluded, "I want to die remembering my pranks, fun, and jokes. Life is about happiness, not accomplishment."

He offered a simple happiness formula: "H equals S minus F" (happiness equals smiles minus frowns), noting his smiles come from family, music, and comedy. Despite being expelled from the same university in 1969 for hacking, Wozniak later co-founded Apple with Steve Jobs.

Wozniak advised finding joy in life by being aware of and pursuing what makes you happy. Harvard professor Arthur C. Brooks calls the pursuit of happiness the "arrival fallacy," emphasizing that happiness is a direction, not a destination.

Wozniak concluded by encouraging graduates to stay honest, keep smiling, and pay their successes forward.

For more information see Ashton Jackson "Steve Wozniak: When I die, these are the moments I want to remember—they don't involve co-founding Apple", CNBC, May 18, 2024. 

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

Elvis’ granddaughter fights Graceland foreclosure sale and alleges fraud

Danielle Riley Keough, granddaughter of Elvis, is the current owner of Graceland, the singer's famous Memphis home. Keough was able to get a restraining order against the sale of the home before the court rules on her application for an injunction. Keough is suing Nusanny Investments & Private Lending LLC to stop a foreclosure sale of Graceland alleging fraud and saying the company behind the sale does not exist and has no rights to the property. 

The company has presented documents appearing to show that Lisa Marie Presley, Keough's late mother, had borrowed $3.8 million from Nausanny Investments and gave the deed of trust encumbering Graceland as security. Keough and Elvis Presley Enterprises insist these documents are false and Lisa Marie never borrowed money nor gave the deed of trust to the company. Elvis Presley Enterprises says the counter lawsuit has been filed to stop the fraud. 

For more information see Raja Razek "Elvis’ granddaughter fights Graceland foreclosure sale and alleges fraud", CNN, May 21, 2024. 

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