Wills, Trusts & Estates Prof Blog

Richard Simmons' family hits back after longtime housekeeper files to be reinstated as co-trustee of estate

Richard Simmons' family has expressed strong disapproval of Teresa Reveles, his longtime housekeeper, for filing a petition to be reinstated as co-trustee of his estate. Reveles, who worked for Simmons for 36 years, claims she was pressured into signing documents that removed her as co-trustee shortly after Simmons passed away. The family, however, has described her actions as motivated by "greed" and believes Simmons would be "heartbroken" by her alleged betrayal of their decades-long friendship.

The family’s spokesperson emphasized that Simmons took great care of Reveles and ensured she was provided for in his will, even though she chose to decline her role as co-trustee. They accuse her of acting against the best interests of the estate and tarnishing Simmons' legacy. Furthermore, they claim Reveles is staying in Simmons’ house despite owning her own residence and has attempted to charge the estate for her living expenses. They also noted concerns over a documentary Reveles allegedly pitched to Netflix, which the family believes could harm Simmons’ legacy.

In her petition, Reveles argues that Simmons’ brother and sister-in-law pressured her into signing away her role as co-trustee while she was emotionally distraught following Simmons' death. She claims she feared losing her inheritance if she did not comply. The family maintains these allegations are false and views her legal actions as a waste of the estate's assets. They are confident the court will reject Reveles' petition once the full facts are presented.

For more information see Lauryn Overhultz "Richard Simmons' family hits back after longtime housekeeper files to be reinstated as co-trustee of estate" Fox News, September 26, 2024. 

Article: Reimagining Marital Property at Death

Ram Rivlin (Hebrew University of Jerusalem - Faculty of Law) and Shahar Lifshitz (Bar-Ilan University - Faculty of Law) recently published,  Reimagining Marital Property at Death, 2024. Provided below is an Abstract:

This paper argues that death should not automatically terminate the marital partnership, and it suggests a novel and comprehensive model for the regulation of marital property upon death. According to the conventional view, the idea of marital partnership implies an equal division of the marital assets upon dissolution. Thus, in the event of death, just as in the event of divorce, the marital partnership comes to an end, and half of the marital property must be allocated to the surviving spouse, while the other half is distributed to the deceased's heirs. Contrary to this conventional view, this paper develops a new theory based on what we term the "surviving partnership." According to this approach, the economic partnership survives the death of one spouse. We justify our theory by focusing on the interests and desires of the spouses as individuals, as well as on the continuity of the familial unit. Our theory has three main legal implications. First, we argue that as a default rule, upon the death of one spouse, the entire marital property should be left in the hands of the survivor, as a matter of family law rather than succession law. For that reason, the law should distinguish between the decedent's portion of the marital property and her separate property. Second, we hold that the norms of will-making, which we view as an expression of the couple's freedom to define death as an event that does indeed terminate the partnership, should be subject to special requirements to ensure fairness and reciprocity between the partners. Therefore, termination of the partnership through a will should either operate reciprocally, regardless of which partner predeceases the other, or require notice to the non-testator spouse to ensure fairness. Third, our view has implications for how the surviving spouse should handle the marital property after her spouse's death, as well as for the norms that will apply to the disposition of the marital property upon her own, subsequent death. We offer a close analysis of current legal norms, demonstrating how the surviving partnership model sheds new light on, and offers amendments and improvements to, hidden aspects of marital property law, succession law, and property law. We conclude by demonstrating how the surviving partnership model is better equipped to deal with contemporary reality characterized by diverse family patterns.

Broke heiress can't access $12 million fortune because she refuses her dad's only condition to get a job

Clare Brown, a 26-year-old from Australia, is unable to access her $12 million inheritance due to a stipulation in her father's will requiring her to get a job. Despite encouragement from her family, Clare has refused, citing her attention deficit disorder as making it difficult for her to work.

Her father's trust was designed to ensure she contributes to society, but Clare instead lives on welfare and considers herself a "broke millionaire." Her family is frustrated by her refusal to meet the trust's condition and follow through with the job requirement.

Clare has taken legal action, suing the trust in an attempt to gain access to her inheritance. The situation highlights ongoing tensions between Clare and her family, as they disagree on the value of the trust’s conditions.

For more information see Sunayna Kanjilal "Broke heiress can't access $12 million fortune because she refuses her dad's only condition to get a job" Market Realist, September 21, 2024. 

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.  

BC Supreme Court orders will variation due to gender bias

The Supreme Court of British Columbia varied a will to address the gender-based discrimination that influenced the distribution of an estate, most of which went to the son, to increase the daughter’s share in the estate. The testator in this case had two children, a daughter and a son. Her 2018 will bequeathed the majority of the estate, including the family home, to the son. The will left the daughter half of a rental property at East 18th Avenue, Vancouver. The testator passed away in February 2021.

The daughter sought the variation of her mother’s will under § 60 of B.C.’s Wills, Estates and Succession Act, 2009, which allowed courts to intervene when a will failed to make an adequate provision for a deceased person’s children. The daughter argued that the total value of the gifts that her brother received – including the family home and the proceeds from the sale of two other properties – amounted to over $2.9 million or 82.6 percent of their mother’s estate.

In comparison, the daughter’s total inheritance of $170,000 allegedly failed to provide adequate and just support for her. She claimed that the unequal treatment reflected their mother’s gender-based preference for sons, which was a product of traditional Chinese values. The son acknowledged that he received a greater share of the estate but disputed the values that his sister assigned to his gifts. He denied any discriminatory treatment. He argued that his mother’s inter vivos gifts were meant to recognize his efforts in managing her rental properties and finances.

In Lam v Law Estate, 2024 BCSC 1561, the British Columbia Supreme Court varied the will to increase the daughter’s interest in the estate by awarding her 85 percent of the East 18th Avenue property. The court did not completely disinherit her brother. The court accepted that he was a devoted son who had provided significant assistance to the mother over the years.

The court concluded that bias influenced both the mother’s inter vivos gifts and her will’s terms, which resulted in an unequal distribution of her estate and significant disparity between her children’s inheritances. The court held that the mother’s bias did not meet contemporary standards of fairness. The court noted that testimony provided by the daughter and by other witnesses supported the view that the mother had a strong bias toward the son.

The court also found that the son excluded the daughter from handling his mother’s finances even though his sister had offered to assist. The evidence showed that the son benefited substantially from this arrangement, particularly through the sale of two properties from which he received a large portion of the net proceeds, the court said.

For more information see Bernise Carolino "BC Supreme Court orders will variation due to gender bias" Canadian Lawyer, September 10, 2024. 

Special thanks to Deborah Gordon (Thomas R. Kline School of Law) for bringing this article to my attention.

Special needs trusts bring peace of mind to aging parents of children with disabilities

Linda Tung, 75, has been planning for her daughter Rachel’s future for decades. Rachel, 36, has cerebral palsy and relies on public benefits, which could be jeopardized if she were to inherit assets outright. To prevent this, the family set up a SNT in 1997, which ensures Rachel will inherit her share of their home without losing access to crucial benefits.

The need for SNTs is growing as life expectancy for individuals with disabilities has increased, while the public support system has not kept up. Many parents, like Tung, face the dual challenge of aging while ensuring their disabled children are cared for when they are gone. Special needs trusts are designed to protect a beneficiary’s assets while maintaining their eligibility for government programs such as Supplemental Security Income and Medicaid, which have strict resource limits.

Attorneys specializing in disability planning stress the importance of selecting the right trustee to manage the trust. Some families choose professional fiduciaries, while others appoint a family member. However, this can create tension, as the trustee must manage finances, and conflicts over money are common. Pooled trusts, managed by nonprofit organizations, are becoming a popular option, offering lower costs and a team of professionals to handle trust management and care coordination.

Additionally, ABLE accounts, introduced in 2014, allow individuals with disabilities to save up to $100,000 without affecting their public benefits. These accounts provide more flexibility for everyday expenses and can be combined with SNTs to maximize financial security. For families like the Tungs, setting up these plans is crucial to ensuring their children’s well-being and independence in the future, long after they are gone.

For more information see Hannah Frances Johansson, "Special needs trusts bring peace of mind to aging parents of children with disabilities," CNN.com, September 13, 2024. 

Special thanks to Naomi Cahn (University of Virginia School of Law) for bringing this article to my attention.

Article: Assessing the Conceptual and Empirical Evidence for Inclusion of an Heirs' Property Variable in the Social Vulnerability Index

Christopher Emrich (University of Central Florida), Herbert Longenecker (University of Central Florida), G. Rebecca Dobbs (Government of the United States of America - Oak Ridge National Laboratory) and Cassie Gaither (affiliation not provided to SSRN) recently published, Assessing the Conceptual and Empirical Evidence for Inclusion of an Heirs' Property Variable in the Social Vulnerability Index, 2024. Provided below is an Abstract:

Heirs' property owners – those without clear title to home and property – face many barriers to recovery from disasters and are more vulnerable to adverse disaster outcomes. Following major disasters, property owners must prove ownership/residency to receive disaster recovery assistance from federal programs and often must present clear title to access rebuilding loans/grants. Leading social vulnerability measures include socio-economic indicators (age, race, income levels, etc.) for estimating population sensitivity to adverse impacts/outcomes, but do not currently include measures of heirs’ properties. This study employs both theoretical and empirical assessments aimed at identifying the utility of including an heirs' property measure into the social vulnerability index (SoVI) through a 13 southern US state census tract level case study. Findings reveal that including heirs' property in SoVI is both conceptually justified and supported by empirical evidence. Beyond increasing our understanding of social vulnerability, this analysis identifies a new approach to future variable additions.

Article: Eighty-five Thirteen and All That

Russ Willis (The Greystocke Project) recently published, Eighty-five Thirteen and All That, 2024. Provided below is an Abstract:

Last March, IRS dropped a long-anticipated revenue ruling ostensibly negating a questionable argument that had been promoted for quite a few years by some tax planning lawyers, that the income tax basis of assets held in an "intentionally defective grantor trust" should be adjusted to fair market value at the settlor's death despite the fact they are not includivle in her gross estate for estate tax purposes.

Unfortunately, Rev. Rul. 2023-2, 2023-16 I.R.B. 658 (04/17/23), is expressly limited by conditions that largely swallow the rule. And it leaves intact another revenue ruling, Rev. Rul. 85-13, 1985-1 C.B. 184, that is the actual source of the problem.

Article: The Development of "Elder Law" In the United States

Nancy J. Knauer (Temple University - James E. Beasley School of Law) recently published, The Development of "Elder Law" In the United States, 2024. Provided below is an Abstract:

This Chapter explores the factors that gave rise to the practice area of "elder law", as well as the ongoing academic critique of this relatively new field. "Elder law" is one of the fastest growing areas of specialized legal practice in the US. It first emerged in the US as a distinct field of legal practice in the late 1970s and early 1980s. By the mid 1990s, many law schools routinely offered courses on "Elder Law" and the American Bar Association (ABA) had recognized "Elder Law" as one of only eighteen board-certified specialties. "Elder law" is unique among legal specialties because it not defined by reference to a specific type of law, but rather by the identity of its client base, namely older adults. This intentional bundling of legal services for older people reflects the complex and fragmented nature of US ageing policy, especially with regard to health care financing. However, commentators have cautioned that this identity-based approach to the provision of legal services carries the potential for stigma and stereotyping.

The billion-dollar battle of the Murdoch empire comes down to Reno courtroom

Since Monday, billionaire Rupert Murdoch, 93, and his team of lawyers have been in probate court, fighting over the fate of his media empire, including Fox News, The Wall Street Journal and The New York Post.

Murdoch wants son Lachlan Murdoch, who currently runs the vast collection of publishing and television companies, to have full control after his death. But to do that, Murdoch has to break an irrevocable trust set up during his second divorce. The way the trust stands now, operational control will be shared equally among Murdoch's four oldest children. James, Elisabeth and Prudence Murdoch are arguing against their father's desire to change the trust.

According to the Times, Murdoch "is arguing in court that only by empowering Lachlan to run the company without interference from his more politically moderate siblings can he preserve its conservative editorial bent, and thus protect its commercial value for all his heirs."

The Times reported that the Nevada probate commissioner found "Murdoch could amend the trust if he is able to show he is acting in good faith and for the sole benefit of his heirs."

When Murdoch dies, according to his irrevocable trust, his voting shares of FOX and News Corp. are set to go equally to his four oldest children. Murdoch wants it to go to son Lachlan, who runs FOX and is the chair of News Corp. Murdoch set up the trust during a previous divorce. Irrevocable trusts are usually set up for tax reasons and can't be changed without permission from beneficiaries or a court order.

Both sides are in front of Probate Commissioner Edward Gorman Jr. He was appointed as the commissioner in 2019. According to the county's website, he came to Nevada in 2009 for the abundant outdoor and community activities. He was an attorney and did estate planning, probate and business matters. He has been on the board of the Reno Host Lions club Charity and the Reno Jazz Orchestra. Gorman ruled earlier this year that if Murdoch can prove changing the trust is being done for the benefit of his heirs, he can change it, according to the New York Times. He also ruled against multiple petitions to the court for media access.

For more information see Siobhan McAndrew "The billion-dollar battle of the Murdoch empire comes down to Reno courtroom," Reno Gazette Journal, September 18, 2024. 

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

Heirs’ partition action not barred: Dog’s longevity leads to property dispute

The Rappahannock County Circuit Court ruled that a property settlement agreement (PSA) allowing a man to live on property during his dog's life did not prevent his heirs from seeking to partition the property after the dog outlived him. The PSA had minimal instructions for the scenario where the man died before the dog, which occurred.

The man's ex-wife opposed the partition and filed a plea in bar, arguing the PSA prevented the heirs' action. Judge James P. Fisher disagreed, stating that the PSA did not bar partition and that the heirs' claim was compatible with the parties' original intent to eventually divide the property. Fisher found insufficient evidence to enforce the PSA as a restrictive covenant or equitable servitude, concluding that the PSA's terms were too vague to bar partition.

Fisher emphasized that while the PSA allowed the ex-wife temporary rights to the property, the intention was always for the land to be divided between the parties or their heirs. The plea in bar was overruled, allowing the partition case to proceed.

For more information see Nick Hurston "Heirs’ partition action not barred: Dog’s longevity leads to property dispute," Virginia Lawyers Weekly, September 16, 2024. 

Special thanks to Deborah Matthews (Virginia Estate Planning Attorney) for bringing this article to my attention.