Wills, Trusts & Estates Prof Blog

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

Tuesday, May 21, 2019

Note on No Good Deed Goes Unpunished: How the New Hampshire Probate Court Has Strengthened the Power of the Attorney General in Charitable Trust Suits

TrustsAngelina M. Spilios, recently published a Note entitled, No Good Deed Goes Unpunished: How the New Hampshire Probate Court Has Strengthened the Power of the Attorney General in Charitable Trust Suits, 17 U.N.H. L. Rev. 379-408 (2019). Provided below is an abstract of the Note.

As Americans increasingly use estate planning tools to provide for their favorite charities, the charitable trust is an important instrument that fits uniquely into general trust law. While charitable trusts are similar to private trusts to a great extent, there are also some critical differences between the two vehicles, especially regarding their enforcement. Specifically, state attorneys general play a special role in the enforcement of charitable trusts. This Note examines this special role of the state attorney general—namely, how trustees interact with the attorney general, arguments for why the role of the attorney general needs to be reformed or eliminated, and arguments in support of letting the attorney general maintain his or her power in these charitable trust cases.

After considering the historical background on charitable trusts, this Note analyzes a recent New Hampshire case, In re Nashua Center for the Arts, as an example of how the New Hampshire Probate Court affirmed the power of the state Attorney General in this charitable trust setting. In that case, several groups of concerned citizens tried to intervene when the trust for Nashua Center for the Arts, part of the Edith Carter estate, announced it would relocate its funds to the Currier Museum of Art in Manchester, New Hampshire. The court denied their motions to intervene because only the state Attorney General has the power to represent them—the parties did not have standing to intervene on their own. The Note then explores other New Hampshire cases, Massachusetts cases, and legal disputes in other states to provide additional perspectives.

This Note concludes that while the court’s decision in In re Nashua Center for the Arts initially seems like a harsh injustice for the nonprofits in Nashua that felt entitled to make use of the funds from Edith Carter’s estate, the court correctly applied the existing law. The outcome of the case should remind nonprofits and citizens in New Hampshire that, while the state has held itself out as one of the most progressive states for trust law, the significant powers held by the state Attorney General will not be limited any time soon.

May 21, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

3 Handwritten Wills Found in Aretha Franklin’s Home

ArethaAretha Franklin died last August of pancreatic cancer at the age of 76, and both her lawyer as well as her family stated that she had no will or any type of estate plan in place. However, months after her death, not one but three handwritten wills have been discovered at her home in suburban Detroit. And they were dated - two are from 2010, found in a locked cabinet, and the last is dated 2014, found in a spiral notebook under the seat cushions of a living room couch.

Her longtime attorney, Bennett, filed the wills on Monday and claimed that he was unsure if they were valid under Michigan law. A hearing has been scheduled for June 12. A statement from the estate said two of Franklin's four sons object to the wills. The statement also expressed that a neutral administrator from the University of Michigan, Sabrina Owens, will continue to serve as the administrator.

Kecalf Franklin has filed a separate petition, claiming that Aretha Franklin wanted him to serve as representative of the estate in the 2014 will. He is objecting to plans to sell a piece of land next to his mother’s Oakland County home for $325,000 to pay off a debt to the Internal Revenue Service. The IRS filed a claim back in December, asserting that the diva's estate owed $6 million in back taxes.

See Ed White, 3 Handwritten Wills Found in Aretha Franklin’s Home, Associated Press, May 20, 2019.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Special thanks to Jim Hartnett, Jr. (Dallas, Texas Probate Attorney) for bringing this article to my attention.

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

May 21, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Intestate Succession, Music, Wills | Permalink | Comments (0)

Monday, May 20, 2019

Whitney Houston’s Estate Plans a Hologram Tour and a New Album

WhitPat Houston, the sister-in-law and former manager as well as executor of the estate of the late singer Whitney Houston,  has finally decided to allow the estate to engage in business endeavors. She has formed quite a list, too: a touring hologram, a possible Broadway musical, branding deals and an album of unreleased tracks. The estate signed a deal last week with Primary Wave Music Publishing, a boutique music and marketing company in New York. According to the agreement, Primary Wave will acquire 50% of the estate’s assets, which include the singer’s royalties from music and film, merchandising, and the rights to her name and likeness.

But it is not all about the Benjamins - it is also about reviving the star's once sparkling reputation. A documentary last year, “Whitney,” which was authorized by the estate, looked unflinchingly at her downfall, including her very public struggle with drugs. “Before she passed, there was so much negativity around the name; it wasn’t about the music anymore,” Pat Houston said. Larry Mestel, Primary Wave’s founder, put it, “Whitney was America’s sweetheart, and the idea now is to remind people that that is what her legacy is.”

Whitney Houston died in 2011 at the age of 48 in Beverly Hills, California. Pat Houston is the sole executor of her estate, whose beneficiaries include Whitney Houston’s mother, the gospel singer Cissy Houston, and her two brothers, Gary and Michael. Houston had 11 Number 1 hit songs and starred in the 1992 blockbuster movie "The Bodyguard."

See Ben Sisario, Whitney Houston’s Estate Plans a Hologram Tour and a New Album, New York Times, May 20, 2019.

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

May 20, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Film, Music | Permalink | Comments (0)

Saturday, May 18, 2019

Article on Tracing Commingled Funds in Asset Forfeiture

CommingledSean Michael Welsh recently published an Article entitled, Tracing Commingled Funds in Asset Forfeiture, 88 Miss. L.J. 179-253 (2019). Provided below is an abstract to the Article.

In order to forfeit the proceeds of some crimes, the Government must prove the property is traceable to the underlying offense. While in most cases this is easily accomplished, courts are divided over whether tracing can occur when illicit funds are commingled with untainted funds. The Second Circuit in Banco Cafetero held that the Government can use accounting methods, including either the "lowest intermediate balance rule," which assumes that the illicit funds remain in the account, despite withdrawals, or the "drugs-in, first-out" rule, which assumes the illicit funds exit the account first through any withdrawal. The Third Circuit in Voigt rejected this approach and held that when funds are commingled, tracing becomes impossible because the Government can seek substitute assets in criminal forfeitures.

Different courts have followed Banco Cafetero and Voigt and developed arguments for and against each approach. This Article finds that neither approach is completely correct and looks to the law of tracing in money laundering and trust law for reasonable principles. This Article recommends that courts adopt the "Single Presumption Method" which states that, while accounting methods are permissible in forfeitures, the Government should be limited to applying a single accounting method when seeking any given asset. This method gives effect to the substitute assets provision in forfeiture, provides for greater certainty when tracing, and respects the risk of uncertainty the Government bears when tracing commingled funds.

May 18, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Friday, May 17, 2019

CLE on Estate Planning: New Laws That Make Old Tools Obsolete

CLEThe National Business Institute is holding a teleconference entitled, Estate Planning: New Laws That Make Old Tools Obsolete, on Friday, June 7, 2019, from 10:00 AM to 11:30 AM Central. Provided below is a description of the event.

Program Description

Stay on the Cutting Edge of Your Practice

This timely update will review the latest changes in the rules and will offer new tools to adapt to the new regulatory environment. Make certain your clients get the most up-to-date representation - register today!

  • Get an incisive summary of the tax changes and their implications for existing planning tools.
  • Learn which deductions remain and how to obtain them.
  • Identify planning approaches that no longer help your clients.
  • Gain practical pointers for fixing old trusts.

Who Should Attend

This legal update is designed for attorneys. It will also benefit accountants and CPAs, trust and tax professionals, and paralegals.

Course Content

  • Leveraging and Reporting the Step Up in Basis (Recent IRS Guidance)
  • QPRT Replacements
  • Obsolete Small-to-Medium Size Estate Tools and How to Update Them
  • The Sky High Estate/Gift/GST Tax Exemption and the New Approaches it Dictates
  • Old Large Estate Techniques That No Longer Work and What to Replace Them With
  • Charitable Giving after TCJA
  • Using the QBI Deduction: New Opportunities
  • Fixing Other Old Trusts
  • What if? . . . How the Potential Clawback of the New Rules Affects Client Advice

May 17, 2019 in Conferences & CLE, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Comment on Illegitimate Succession: Vestigial Discrimination in Wyoming’s Rules of Intestate Descent

WyAllison Strube Learned recently published a Comment entitled, Illegitimate Succession: Vestigial Discrimination in Wyoming’s Rules of Intestate Descent, 19 Wyo. L. Rev. 119-148 (2019). Provided below is an introduction to the Comment.

Although the first child is free, any person who becomes the biological parent of a second nonmarital child within the state of Mississippi is guilty of a misdemeanor punishable by a $250.00 fine and up to ninety days imprisonment. Indeed, until the state amended its “crimes against public morals and decency” in 2004, Mississippi required its state health department to report the names and addresses of every person “listed on birth certificates of illegitimate children” to every district attorney in the state. In Tennessee, county officials may indenture nonmarital children into servitude if it “satisfactorily” appears their mother “disregards their moral and mental culture, and either keeps or lives in a house of ill fame.” So long as it seems it would better the child’s condition, Tennessee counties can “bind out illegitimate children,” as apprentices even if the mother otherwise provides her children with sufficient clothing and food.

Notwithstanding these rather extreme exceptions, modern statutory schemes generally disfavor laws that create legal distinctions based on the marital status of a person’s parents, especially laws that deny rights to nonmarital children or perpetuate the stigma associated with the legal status of “illegitimacy.” This sentiment, however, represents a substantial evolution in social views that effected changes to important areas of law. Although Wyoming law reflects some of the legislative trends related to the rights of nonmarital children, the state’s laws of intestate succession continue to distinguish between marital and nonmarital children. Wyoming Statute § 2-4-102, entitled “Rule of descent; illegitimate person,” provides the “rule of descent of all property, real and personal, of any illegitimate person dying intestate” in Wyoming. Under this provision, nonmarital children are categorically precluded from distributing property to their fathers through intestate succession, even after the father establishes paternity by judicial determination.

Part II of this Comment begins with a brief history of the treatment of nonmarital children in state intestacy laws and in Wyoming’s rules of intestate descent. Part II follows with an overview of United States Supreme Court jurisprudence concerning discrimination against nonmarital children in state inheritance laws. Part II concludes with an examination of how most state legislatures have responded to these Supreme Court decisions by eliminating statutory distinctions between marital and nonmarital children, including the stigmatizing classification of “illegitimacy.” Finally, Part III challenges the propriety of Wyoming Statute § 2-4-102 in light of surrounding provisions, equal protection concerns, and current social models. Although Wyoming has eliminated the legal distinction from most of its statutes, the Wyoming State Legislature finds itself decades behind legislative and societal trends with respect to its laws of intestate succession. Accordingly, Part III argues that Wyoming should repeal § 2-4-102, which continues to label nonmarital children as “illegitimate,” both in title and in substance.

May 17, 2019 in Articles, Estate Administration, Estate Planning - Generally, Intestate Succession | Permalink | Comments (0)

Family Inherits Field of Forgotten Ferraris

FOFA lawyer in Texas that also happened to be a car collector left behind a field of 13 Ferraris and other collectible cars after passing away of a serious illness several years ago. Previously he had put them into a rented warehouse, but after a missed payment due to being ill, the cars were moved to a nearby field. Among the beauties are a Testarossa, a 308 Quattrovalve, three 348s and other models.

Legal red tape caused the cars to remain in the field while the estate was processed, and by the time the vehicles were recovered they were in poor condition. Four of the documented cars - 2 Ferraris and 2 Rolls-Royces - are unaccounted for and are still have not been found.

Were they kept in good condition, the collection would likely have been worth over $1 million, but with the help of the organizer of an annual Ferrari Festival in Houston, Paul Cox, the family has quietly been able to find new homes for most of the cars with people who plan to bring them back to life.

See Gary Gastelu, Family Inherits Field of Forgotten Ferraris, Fox News, May 17, 2019.

May 17, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Humor | Permalink | Comments (0)

Thursday, May 16, 2019

CLE on The LLC Charging Order - The Quiet Shield of LLC Asset Protection

CLEThe National Business Institute is holding a webinar entitled, The LLC Charging Order - The Quiet Shield of LLC Asset Protection, on Tuesday, May 21, 2019, from 1:00 PM - 4:15 PM Central. Provided below is a description of the event.

Program Description

Protect LLC Ownership and Management

Your client's LLC ownership is an asset. Do you know how to protect that asset should your client get sued for something unrelated to the business? Can you safeguard your client's future by putting in place provisions that effectively control management rights? Our experienced faculty will discuss how to properly use LLC charging orders and pick-your-partner provisions so you can protect members' ownership interests. Register today!

  • What is an LLC charging order and what does it do? Find out!
  • Review key charging order provisions and identify if they apply to single-member LLCs.
  • Learn about charging order benefits and protections, like ownership integrity and management control.
  • Identify key charging order limitations.
  • Learn about LLC responses to charging orders.

Who Should Attend

This essential course is designed for attorneys. It may also benefit accountants and presidents/vice presidents.

Course Content

  • What is an LLC Charging Order and What Does it Do?
  • Charging Order Limitations
  • The 3 Types of Charging Order States in Detail
  • Charging Order Benefits
  • Using Charging Order Laws, Rules and Regulations to Your Advantage
  • Charging Order Protection
  • Creditor Responses
  • LLC Responses to Charging Orders

May 16, 2019 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0)

Article on Essay Response to 'Asymmetries in the Generation and Transmission of Wealth'

RainmoneyReid K. Weisbord recently published an Article entitled, Essay Response to 'Asymmetries in the Generation and Transmission of Wealth', Elder Law eJournal (2018). Provided below is an abstract of the Article.

What role should wealth transfer law play in reducing economic inequality? In “Asymmetries in the Generation and Transmission of Wealth,” Professor Felix Chang proposes thoughtful reforms to reduce economic inequality by altering the rules of wealth transmission. The current state of wealth inequality in the U.S. may, indeed, justify regulatory intervention, but this is a complex, subjective question. Consider, for example, a recent social policy experiment in which Yale Law School students self-identified as politically progressive but exhibited self-interested distribution preferences that favored efficiency over equality. Nonetheless, objective economic indicators published by French economist Thomas Piketty show that wealth inequality in the U.S. has, in fact, increased in recent years. That trend lends support for Chang’s normative claim of asymmetry between the regulation of wealth generation and transmission. In response to Chang’s call for redistributive reforms, this Essay proposes repackaging the federal wealth transfer tax structure and applying it to a postmortem system of “means testing” for federal entitlements, such as Social Security and Medicare. This system would recapture federal entitlement benefits from wealthy decedent estates, but to protect the vested interests of aging current beneficiaries, postmortem means testing would have to be phased-in gradually by exempting anyone currently over the age of fifty.

May 16, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Has Granny Signed a Pre-Nup?

PrenupThe number of people getting married aged 65 and over rose by 46% between 2004 and 2004 according to the latest Office for National Statistics marriage data. During that same time period, older divorces were also on the rise. 92% of those that were getting married over the age of 65 had already been married once before, either being widows/widowers or divorcees.

Even so, people are waiting until their thirties to get married for the first time. During that time, even before their first go around, brides and grooms may have already accumulated enough assets to call for a prenuptial agreement to safeguard their possessions. Sarah Balfour, a partner at Irwin Mitchell who spoke at the Later Life Planning Conference in London last month, says she had seen a considerable increase in the demand for prenuptial and occasionally for postnuptial agreements to assign assets after marriage. “One of the largest areas concerns second- or third-generation wealth. Grandparents ask their grandchildren to enter into a pre-nup." In the United Kingdom, prenuptial agreements do not carry statutory weight so it is questionable whether they would survive a divorce.

The Supreme Court in the UK said in a landmark case in 2010 that if the evidence was strong, prenuptial agreements could have decisive or compelling weight. Lawyers and legal scholars perceive the case as test of whether certain prenuptial agreements will stand up in court in England and Wales. But to have any true weight, they must be fair to all parties involved.

See Lindsay Cook, Has Granny Signed a Pre-Nup?, Financial Times, May 15, 2019.

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

May 16, 2019 in Current Affairs, Elder Law, Estate Administration, Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0)