Wills, Trusts & Estates Prof Blog

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

Saturday, June 25, 2022

Article: Freedom of Testamentary Disposition

Paul B. Miller recently published an article entitled, Freedom of Testamentary Disposition, Oxford University Press, Philosophical Foundations of the Law of Trusts, Forthcoming. Provided below is an abstract of the Article:

American law is notoriously solicitous of property owners’ testamentary freedom. Interpretive theorists cannot but acknowledge its centrality to enabling law. Yet freedom of testamentary disposition has attracted criticism on normative grounds for centuries. Indeed, it is widely viewed as one of the most tenuous of incidents of private ownership.

This chapter examines leading arguments offered in defense of wide testamentary freedom of the sort found in American trust law. Viewed, as it has been, within conventional frames of the morality of property – its central preoccupations with autonomy, need, scarcity, and equality – testamentary freedom is widely considered morally suspect. And, indeed, as I explain, arguments from property conventions, autonomy, social utility, and obligations of provision each fail to show that laws enabling wide testamentary freedom are morally defensible.

In the chapter I suggest that testamentary freedom can be defended more robustly on the footing of the morality of gift relationships, with particular attention to the value of testamentary benefaction in enabling the expression of moral motivation, the practice of virtue, and realization of goods essential to the flourishing of a testator’s intended beneficiaries. An advantage of this approach is that it recognizes moral complexity, allowing one to appreciate the value of dispositions that track the focal moral and legal sense of benefactions as gifts, while at the same time pinpointing ways in which some dispositions prove morally defective as gifts despite their legal validity (e.g., spiteful or malicious disinheritance, wasteful or harmful inheritance) and accommodating side constraints responsive to concerns surfaced within the morality of property (e.g., regarding the interests of future generations, and the impact of inheritance on distributive justice). 

June 25, 2022 in Articles, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Thursday, June 23, 2022

Article: Would the Securing a Strong Retirement Act Secure More Retirement Equity?

Albert Feuer recently published an article entitled, Would the Securing a Strong Retirement Act Secure More Retirement Equity?, Tax Management Comp Plan Journal, 2022. Provided below is an abstract of the Article:

On March 29, 2022 the House approved H.R. 2954 that is titled the Securing a Strong Retirement Act of 2022 (the SECURE Act 2.0) by a vote of 414-5.

On May 26, 2022, a discussion draft of the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE & SHINE) Act of 2022 was released by the Senate Health, Education, Labor, and Pensions Committee Chair Senator Patty Murray (D-WA), and Ranking Member Senator Richard Burr (R-NC).

The article argues that despite providing tax incentives in excess of more than $70 billion, the bills in concert would intensify rather than diminish retirement benefit disparities, while leaving tens of millions of American families and workers with insufficient savings to retire comfortably. The article analyzes those bills’ provisions and describes:

• those bills’ provisions that would secure more retirement equity and how to improve those provisions,

• those bills’ provisions that would secure less retirement equity, and

• provisions that would secure more retirement equity, if added to the bills would secure more retirement equity.

June 23, 2022 in Articles, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Wednesday, June 22, 2022

Article: Tax incentives for Green Burial

Victoria J. Haneman recently published an article entitled, Tax Incentives for Green Burial, Nevada Law Journal, 2021. Provided below is an abstract of the Article:

Every living being is doomed to decay and die and decay some more. Death is inevitable, and the disposal of our dead is a fundamental global activity with the potential to have significant environmental impact. In the United States, the environmental toxicity of “traditional” modern burial is stark. A cosmeticized body is pumped with three gallons of embalming fluid (containing chemicals such as formaldehyde) that eventually leaches through metal and wood and into the ground. An estimated 5.3 million gallons of embalming chemicals are buried annually in what are essentially luxury landfill-slash-golf-courses, with landscaping and grass to maintain and mow, in coffins that are typically constructed of nonbiodegradable chipboard. And while cremation is a more environmentally friendly alternative, incineration cremation falls short of being labeled “green.” Fire-based cremation utilizes significant resources and energy, attributable to the substantial quantity of fossil fuel required to burn human remains at 1,562° F (850° C) to reduce a corpse to ash. Pollutants are generated in doing so, including an average of 250,000 tons per year of carbon emissions and an estimated 320 to 6,000 pounds of mercury (from incineration of dental fillings) per year.

This tradition-steeped industry has projected domestic annual revenues of $68 billion (by 2023) and, interestingly, the industry has slowly started to “go green.” Changing the way in which one is buried will not solve the problem of climate change, but it does respect the notion that one’s last act on earth should not be to harm it. Industry norms are on the brink of disruption: the alt-death or death positive movement seeks to infuse the human experience back into death; there is capital investment into new innovative death service technologies, e.g. Funeralocity, WeCroak; and green death care tech startups are dramatically broadening available options for reintegrating human remains back into the environment in an eco-friendly manner. Unfortunately, a myriad of market failures and obstacles are impeding that disruption. This Article explores our modern disconnection from death, the transitioning of human remains in an environmentally friendly manner, the importance of pre-need or pre-death planning and prepayment to protect the grieving consumer, and the way in which tax incentives may be utilized to weave these ideas together in a cohesive plan for a green tax credit. A Pigouvian subsidy is proposed in the form of a refundable tax credit for qualified expenditures related to the nonrefundable prepayment of expenses arising from “sustainable disposition or transition of human remains.”

June 22, 2022 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, June 21, 2022

Article: When Beneficiaries Predecease: An Empirical Analysis

Adam J. Hirsch recently published an article entitled, When Beneficiaries Predecease: An Empirical Analysis, Emory Law Journal, 2022. Provided below is an abstract of the Article:

Under current law, bequests to beneficiaries who predecease the testator “lapse” to the beneficiary of the residuary, unless they are preserved for the descendants of predeceased beneficiaries under an “antilapse” statute. The beneficiaries covered by antilapse statutes vary from state to state, but in most states today the statutes apply only to blood relatives of the testator as distant as first cousins. This Article examines the public policy of antilapse statutes, assessing them by undertaking the first-ever survey of popular preferences concerning the matter. Harvesting evidence for five types of beneficiaries, the study finds that the prevailing structure of antilapse statutes is both over- and under-inclusive. On one hand, among beneficiaries who comprise blood relatives, most respondents prefer to create substitute bequests only for descendants of predeceased children. Lawmakers should strike other relatives from the statutes’ coverage. On the other hand, most respondents would create substitute bequests for their descendants if their spouse predeceased them. Lawmakers should extend the range of the statutes accordingly. Finally, the Article advocates enhancing courts’ power to deviate from mechanical rules of lapse in situations where testamentary intent is less predictable.

 

June 21, 2022 in Articles, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Sunday, June 19, 2022

SECURE Act 2.0 Analyzed

Albert Feuer recently posted on SSRN his article entitled Would the Securing a Strong Retirement Act Secure More Retirement Equity? (June 3, 2022) which appears in 50 Tax Mgmt.Comp. Plan. J. No. 6 (2022). Here is the abstract of his article:

On March 29, 2022 the House approved H.R. 2954 that is titled the Securing a Strong Retirement Act of 2022 (the SECURE Act 2.0) by a vote of 414-5.

On May 26, 2022, a discussion draft of the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE & SHINE) Act of 2022 was released by the Senate Health, Education, Labor, and Pensions Committee Chair Senator Patty Murray (D-WA), and Ranking Member Senator Richard Burr (R-NC).

The article argues that despite providing tax incentives in excess of more than $70 billion, the bills in concert would intensify rather than diminish retirement benefit disparities, while leaving tens of millions of American families and workers with insufficient savings to retire comfortably. The article analyzes those bills’ provisions and describes:

• those bills’ provisions that would secure more retirement equity and how to improve those provisions,
• those bills’ provisions that would secure less retirement equity, and
• provisions that would secure more retirement equity, if added to the bills would secure more retirement equity.

June 19, 2022 in Articles, Non-Probate Assets | Permalink | Comments (0)

Tuesday, June 14, 2022

Article: Restraining the Unsupervised Fiduciary

Thomas E. Simmons and Andrew J. Knutson recently published an Article entitled, Restraining the Unsupervised Fiduciary, South Dakota Law Review, 2021. Below is the abstract for the Article:

In 2020, Governor Kristi Noem signed South Dakota's slightly tweaked version of the Uniform Power of Attorney Act (UPOAA) into law. That uniform act-now enacted in a total of twenty-eight states since approved by tile Uniform Law Commissioners in 2006, represents a significant advancement in clarifying and regulating the use of powers of attorney. Given the widespread use of powers ofattorney and their great potential for abuse and misuse, a comprehensive set of rule-both default and mandatory-are warranted. This article summarizes the UPOAA as well as the history ofunifbrm acts which preceded it. The arrangement and structure of the Act and its incorporation ofa statutory power ofattorney form are detailed. Key deviations from the UPOAA approved in South Dakota are summarized. Finally, this article sketches some of most important powers of attorney opinions issued by the South Dakota Supreme Court in the last twentyfive years and considers which aspects of that jurisprudence may have been displaced or supplemented with the new power of attorney act statutes.

 

June 14, 2022 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Monday, June 13, 2022

Article: Revoking Wills

David Horton recently published an Article entitled, Revoking Wills, Notre Dame Law Review, 2022. Below is the abstract for the Article:

No issue in inheritance law has sparked as much debate as the requirements for making a valid will. For centuries, Anglo-American courts have insisted that decedents obey rigid formalities, such as signing or acknowledging their wills before two witnesses. These rituals preserve proof of the testator’s wishes, reinforce the gravity of estate planning, prevent fraud and duress, and distinguish wills from other instruments. But they also have a dark side. In scores of cases, judges have cited minor errors during the execution process to invalidate documents that a decedent intended to be effective. Accordingly, generations of scholars have critiqued will-creation doctrine. Recently, these discussions have intensified, as several jurisdictions have embraced the harmless error rule, which excuses trivial departures from the execution formalities, or adopted statutes that validate electronic wills.

However, the well-canvased topic of creating a will has a little-noticed flip side. Testators do not merely need to follow formalities to make a will; rather, they also must jump through hoops to un-make a will. Since the British Parliament passed the Statute of Frauds in 1677, there have only been two ways to annul a testamentary instrument: by burning, tearing, canceling, or obliterating the document or by signing another will. In sharp contrast to the extensive commentary on executing wills, revocation doctrine has never received sustained attention.

This Article fills that vacuum. First, it reveals that the revocation formalities defeat testamentary intent far more often than is commonly believed. Indeed, testators fail to achieve their goals when they destroy a photocopy, deface the margins of their will, leave the room while a third party revokes the instrument, or express their wishes in a writing that is not a full-fledged will. Thus, even more than the execution formalities, revocation doctrine consists of tripwires and traps for the unwary. Second, the Article demonstrates that the benefits of these merciless rules are minimal. Although some serve the same evidentiary, ritual, protective, and channeling functions as the execution formalities, others further no discernable goal. Third, the Article critiques potential solutions to these problems. It explains that a handful of lawmakers and courts have moved in the right direction by relaxing the revocation formalities, extending harmless error into this sphere, and achieving justice in particular cases through the imposition of a constructive trust. Nevertheless, the Article also contends that these curative measures do not go far enough. Accordingly, the Article proposes a novel path forward: importing the revocation formalities from trust law. In sharp contrast to the straitjacket of wills doctrine, trust law both permits settlors to revoke their trusts by any reasonable means and to create their own private revocatory rules. Thus, extending this lenient approach into the realm of wills would minimize intent-defeating outcomes, dovetail with broader trends in the field, and bring revocation law into the twenty-first century.

June 13, 2022 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, June 12, 2022

Article: Conflicts and Opportunities for Pension Fiduciaries in the ESG Environment

Susan N. Gary recently published an Article entitled, Conflicts and Opportunities for Pension Fiduciaries in the ESG Environment, Oklahoma Law Review, 2022. Below is the abstract for the Article:

Acting as prudent investors, pension managers should consider financially material factors that affect the risk/return profile of funds. Material environmental, social, and governance (ESG) factors may affect financial performance by identifying opportunities and risk, so it would seem prudent to consider those factors when making decisions in the best interests of plan beneficiaries. In June 2020 the Department of Labor (DOL) proposed a rule that appeared to be an attempt to curtail consideration of ESG factors. The proposal was based on a misunderstanding of current investment strategies, and it could have had a detrimental effect on the security of retirement funds. After receiving hundreds of negative comments, the DOL revised the proposal and issued a final rule (the 2020 Rule) which addressed some, but not all, of the concerns. After the change of administrations, the DOL announced that it would not enforce the rule until it reconsidered the guidance. On October 14, 2021, the DOL issued a Proposed Rule, revising the 2020 Rule. The 2021 guidance should help address the confusion over the proper use of financially material ESG information, but uncertainty regarding proper fiduciary behavior of those who manage pensions persists. This article explains why the confusion exists and why pension fiduciaries should consider climate change and other ESG factors in their investment decision-making process.

The article describes the fiduciary duties that apply to those who manage pension funds. The article then discusses the consideration of climate change and other ESG factors in investment decision making and attempts to dispel misunderstandings related to ESG and fiduciary duties. The article reviews DOL guidance from 1994 forward, explains why so many commenters expressed concern over the 2020 proposal, and analyzes the 2021 Proposed Rule. The article argues that a prudent pension manager should invest for the long-term financial benefit of all pension participants and their beneficiaries. To do so, a prudent manager should consider climate change and other ESG factors to address systemic risks to the portfolio and to protect the long-term interests of participants and beneficiaries.

June 12, 2022 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Saturday, June 11, 2022

Article: Enforcing Charitable Trusts: A Study on the. English Necessary Interest Rule

Hui Jing recently published an Article entitled, Enforcing Charitable Trusts: A Study on the English Necessary Interest Rule, Legal Studies 1-18 (published online first), 2022. Below is the abstract for the Article:

In England, Parliament introduced the ‘necessary interest rule’ through the enactment of section 115 of the Charities Act 2011 (England and Wales), allowing ‘any person interested’ in a charitable trust to initiate charity proceedings against defaulting trustees in their administration of charitable assets. Nevertheless, insufficient attention has been paid to this rule despite it being initially enacted in 1853. Parliament has refrained from clearly defining the rule, and the courts have long been grappling with its meaning in determining whether a person is eligible to sue. This paper studies the necessary interest rule by exploring the way in which the courts have interpreted it and the uncertainties surrounding its operation. It is shown that, in the context of charitable trusts, the concern of securing the due administration and execution of the trust lies at the heart of the rule. The final section of this paper discusses the significant theoretical implications of the necessary interest rule. It considers the beneficiary-enforcer debate concerning the conceptual nature of express trusts and highlights the insights that analysis of the rule can provide into this debate.

June 11, 2022 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Thursday, June 9, 2022

Article: Substance Over Form in Transfer Tax Adjudication

Jay A. Soled and Richard Schmalbeck recently published an Article entitled, Substance Over Form in Transfer Tax Adjudication, Loyola of Los Angeles Law Review, 2022. Below is the abstract for the Article:

The elevated exemption level under the federal transfer tax system (now in excess of $23 million for a married couple) has opened up new and abusive tax-avoidance opportunities. In many areas of the tax law, the substance over form doctrine historically has been effective in controlling such abuses; however, for a myriad of reasons, transfer tax jurisprudence has been marred by the reluctance of courts to embrace this doctrine. In this analysis, we urge reconsideration of that posture.

June 9, 2022 in Articles, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)