Wills, Trusts & Estates Prof Blog

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

Monday, January 21, 2019

Article on Disposition of Digital Assets in Georgia

UgaClint A. Guillebeau published a Note entitled, Disposition of Digital Assets in Georgia, 25 J. Intell. Prop. L. 29-40 (2017). Provided below is an introduction of the Note.

Estate planning law tells us that following an individual’s death, the disposition of that individual’s tangible property, such as a car or a house, whether he died intestate or with a thorough estate plan, will pass on to his or her heirs. Probate and estate issues are governed by state law and Georgia’s laws are codified in the Georgia Code in Section 53 where the disposition of tangible property can be found. What is lacking in Georgia’s wills, trust, and estate laws is what happens to other forms of property such as digital assets. With the ever-increasing reliance and usage of the internet this issue needs to be addressed. Currently, there is no federal law with regard to the disposition of digital assets, and state law that has thus far been adopted is scarce. However, in 2015 the Uniform Law Commission (ULC) drafted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) with a twofold purpose expressed in a prefatory note. 

First, it gives fiduciaries the legal authority to manage digital assets and electronic communications in the same way they manage tangible assets and financial accounts, to the extent possible. Second, it gives custodians of digital assets and electronic communications legal authority to deal with fiduciaries of their users, while respecting the user’s reasonable expectation of privacy for personal communications.

This Note will support the position that states, and Georgia in particular, should adopt a version of RUFADAA but should first strongly consider and redraft some of the language. This Note will advocate in part on the potential adoption of federal law requiring users to sign an online tool before gaining access to a website. Further, this Note proposes a reorganization of the three tier distribution system of digital assets found in the Revised Uniform Fiduciary Access to Digital Assets Act which would allow estate planning documents, if drafted later in time, to trump the online tools articulated designations.

Part II of this Note will provide the background needed for a thorough understanding of the problem. This section will provide the definition and examples of digital assets, provide the history of how digital assets have been handled over the years, as well as provide an understanding of current federal and state law regarding this issue. This section will also analyze how Georgia in particular has dealt with digital assets. Part III will outline important aspects of RUFADAA and analyze the benefits as well as potential consequences of a strict adoption of RUFADAA. Part IV will advocate for Georgia to adopt RUFADAA but with a few changes to better handle possible issues. Part V will be a conclusion summarizing this Note. 

January 21, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Technology, Wills | Permalink | Comments (0)

Sunday, January 20, 2019

Matters of Style: Spouse’s Elective Share Suit Dismissed for Naming the Wrong Party

WillNaming the correct party to a suit is one of the most elementary and necessary aspects to any litigation, and though it may appear to be a simple mistake, it can cause the entire case to come crashing down. 

In the appellate level court of Virginia, a wife that had been excluded from her husband's will found this out the hard way. After realizing the circumstance's of her late husband's will after it had been entered into probate, she filed a suit in circuit court seeking to claim her statutory elective share of his augmented estate. When a spouse is written out of a decedent spouse's will, some state's have statutes providing that the surviving spouse is entitled to a certain portion of the estate. The procedures to do so are very precise.

The wife was styled and brought against the Estate itself and did not include the administratrix, the fiduciary appointed to administer the Estate - but the wife did serve the administratrix. The Administratrix later made a motion to dismiss the lawsuit on the grounds that it was filed against the wrong party, and also as the statute of limitations had passed, not allow the wife to file a new suit against the administratrix. Wife argued the amending the complaint was more equitable remedy. The trial court ruled that naming the estate as the party was a nullifying offense, and the complaint could not be amended as there was no other party named. The appellate court affirmed the decision, as litigants have a duty to investigate the proper parties to sue or be sued, and all parties must be living.

See Brett Herbert, Matters of Style: Spouse’s Elective Share Suit Dismissed for Naming the Wrong Party, Estate Conflicts, January 14, 2019.

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

January 20, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Malpractice, New Cases, Wills | Permalink | Comments (0)

Saturday, January 19, 2019

The £40m Freddie Mercury Prize

FreddieThe former fiancé of Freddie Mercury, Mary Austin, inherited 50% of the Queen front man when he passed away from AIDS in 1991, increasing to 75% when his parents passed away. The other 25% went to Mercury's sister. Austin also inherited his 28-room mansion in west London and his enviable art and Louis XV furniture collections. Though the pair never married due to Mercury coming out as gay, the two remained extremely close for the rest of his life.

Future earnings of Queen are split four ways between the Freddie Mercury estate and his three surviving bandmates – guitarist Brian May, drummer Roger Taylor and bassist John Deacon. Therefore Austin, 67, will receive roughly 19% of the profits of the recent Bohemian Rhapsody movie, or £40 million. She did not participate in the production of the movie and appears to have no dealings with the remaining members of the band.

A film insider said "This film was created and managed by Queen, which means they can protect their share. I would expect the studio to get around 50 per cent and the rest to go to the surviving Queen members and the Freddie Mercury estate."

See Arthur Martin & Adam Luck, The £40m Freddie Mercury Prize, Daily Mail, January 11, 2019.

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

January 19, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Film, Wills | Permalink | Comments (0)

Friday, January 18, 2019

Article on Is the Trustee-Beneficiary Relationship Necessarily Fiduciary

Trusts2Tobias Barkley published an Article entitled, Is the Trustee-Beneficiary Relationship Necessarily Fiduciary, Wills, Trusts, & Estates Law eJournal (2014). Provided below is an abstract of the Article.

This paper is about the relationship between trust law and the concept of a fiduciary. The traditional position on this relationship is that express trustees are necessarily fiduciaries. However, developments in trust drafting practice and their implicit acceptance by the courts have put the relationship between fiduciary and trustee under strain, with the result that there appears to be a divergence between the fundamental obligations of a trustee and the fundamental obligations of a fiduciary.

January 18, 2019 in Articles, Estate Administration, Estate Planning - Generally, Professional Responsibility, Travel, Trusts | Permalink | Comments (0)

Thursday, January 17, 2019

You Must Plan for Your Clients' Extramarital Affairs

SecretRelationships that occur outside of the marriage happen enough that advisors should be aware of the situations arising from them even though not every client will need that particular advice. The extramarital relationship can have particular repercussions if the married person is affluent. The relationship can be short flings or long-term affairs, and the longer the affair the more likely the "stranger to the marriage" may feel entitled to certain assets or a certain percentage of the person's estate.

The conversation to convince the client to be honest about the affair may be awkward, but it could be pivotal to be forward thinking and cover all aspects of the client's testamentary desires. Clarity about the financial aspects of the relationship supported by legal documentation and legal structures can be very beneficial. An irrevocable trust with the paramour designated as the beneficiary can be effective to make sure they are provided for after the client's death while also guaranteeing that a jilted spouse or disenchanted descendants cannot alter it.

What about a rejected lover? "Hell hath no wrath like a woman scorned." The entanglement of embarrassment and revenge may add a certain spice to Hollywood movies but it does not do any favors for clients. Astute wealth planning and carefully worded nondisclosure agreements with substantial legal penalties can be effective in these unfortunate situations.

See Russ Alan Prince, Russ Prince: Yes, Advisors, You Must Plan for Your Clients' Extramarital Affairs, Financial Advisor Magazine, January 10, 2019.

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

January 17, 2019 in Estate Administration, Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

CLE on The Probate Process From Start to Finish

CLEThe National Business Institute is holding a conference entitled, The Probate Process From Start to Finish, on Tuesday, March 26, 2019 at the Embassy Suites by Hilton in Portland, Maine. Provided below is a description of the event.

Program Description
Your Fundamental Guide to Probate
So your client wants you to handle a probate case - do you know where to start? Do you know the proper procedures to use, as well as the law? At this seminar, our experienced faculty will give you detailed, step-by-step information to confidently and ably navigate the system. Gain the confidence you need to reach a favorable outcome for your client when litigating in probate court. Enroll today!
Get a step-by-step walkthrough of a probate case complete with practice tips from seasoned practitioners.
Implement a complete estate timetable in order to know what needs to be done - and when.
Effectively guide the executor and the administrator through their various duties.
Avoid problems arising from creditors' claims and insolvency with our powerful strategies.
Know the secrets to confidently handling a spouse's elective share.
Forestall disagreements between beneficiaries: adhere to the guidelines of precedence in case of intestacy.
Get results for your client! Explore successful strategies for litigating in probate court.
Follow thorough closing procedures so accounting is complete before distribution takes place.

Who Should Attend
This basic level seminar will provide those who have limited probate experience with tips on successfully handling a probate case. This comprehensive seminar will benefit:
Attorneys
Paralegals
Accountants
Tax preparers
Trust officers
Financial planners
Estate planners

Course Content
Taking the First Step: Filing an Estate in Probate Court
Understanding the Role of the Personal Representative in Probate
Managing the Inventory
Administering the Estate Effectively
Maintaining an Ethical Balance in Probate Practice
Determining if Spouse's Elective Share is a Reasonable Option
Uncovering the Laws of Intestacy and How They May Apply
Litigating the Case in Probate Court
Putting the Case to Rest: Closing the Estate

January 17, 2019 in Conferences & CLE, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Wills | Permalink | Comments (0)

Wednesday, January 16, 2019

Mandatory Restricted Depository Arrangements in Probate Questioned [Florida]

CourtFlorida statute dictates that when there is just cause a court can authorize that all of the assets of an estate be placed within a restricted depository account, which will only allow withdrawals with a court order. This protection against frivolous and unauthorized spending by the managing person or officer. Under Fla. Stats. §69.031(1), the appropriate reason would be "because the size of the bond required of the officer is burdensome or other cause." It is the word "other cause" that sent a recent case to the appellate level.

A number of counties opted to impose the restricted depository account on all estate cases within their jurisdiction in a form of blanket policy. It was not dependent on the financial restrictions or abilities of the guardian, executor, trustee, or other form of officer. The Fourth Court of Appeals ruled against the policy of mandatory restricted depository accounts, but did hold that the restricted depository order under appeal would stand as the facts of the case constituted it being appropriate.

If the court's opinion becomes final, there is a question of what counties that require a mandatory restricted depository account will do to be in compliance. Especially for the counties outside of the jurisdiction of the Fourth Court of Appeals.

See Charles Rubin, Mandatory Restricted Depository Arrangements in Probate Questioned [Florida], Rubin on Tax, January 9, 2019.

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

January 16, 2019 in Current Events, Estate Administration, Guardianship, New Cases | Permalink | Comments (0)

Article on More Moves in Constructive Trusts and Estoppel

Trusts2Martin Dixon recently published an Article entitled, More Moves in Constructive Trusts and Estoppel, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

Analyses the law of constructive trusts and its connection to statutory formalities, including the Pallant v Morgan equity.

January 16, 2019 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Tuesday, January 15, 2019

9 Ways to Gift Your Assets to Charity

Charity1Donating to charity can be done for a multitude of reasons: giving back to society, tax saving, creating or extending a family legacy, or standing behind a specific cause or foundation. Whatever the purpose behind the giving, it is important to understand the various ways you can give to maximize impact while reaping the applicable benefits.

Here are a number of avenues to donate your assets to charity.

  1. Outright Gifts of Cash, Securities and Real Estate
    • This is the easiest way, and the majority of charities accept this method.
  2. Giving Tangibles
    • Art and other collectibles are governed by different rules, and many charities may not be equipped to accept the gifts. If the organization is able to accept the gifts, the associated income tax deduction also depends on other factors.
  3. Charitable Gift Annuity
    • This arrangement is part charitable gift, part purchase of an annuity contract with a term equal to the life of the donor.
  4. Donor-Advised Funds
    • DAFs are accounts set up within a charitable organization, and the donor contributes personal assets to the account where the contribution can be invested and grow tax-free until a grant is made to a qualified charity.
  5. Retained Life Estate
    • The donor can gift a home, farm, or other form of property to a charitable organization but retain a life estate. When the donor dies, the property passes to the charity.
  6. Family Foundations
    • Foundations require significant administrative oversight, and the average person may not be able to create one. For those clients than can create a foundation, they can maintain complete control and pass that control on to others.
  7. Charitable Remainder Trust
    • This is an irrevocable trust where the grantor or other non-charity receives a certain stream of income during the term of the trust, then the remainder passes to a charitable organization when the trust ceases to exist.
  8. Charitable Lead Trust
    • This is an irrevocable trust where a charity or charities receive a certain amount during the term of the trust, then the remainder passes to the donor's heirs and the culmination of the trust.
  9. Charitable LLC
    • This is a new method, and is governed by applicable state corporate law. The LLC is not tax-exempt, but the income tax liability as well as deductions and losses are passed through.

See Catherine Schnaubelt , 9 Ways to Gift Your Assets to Charity, Forbes, January 9, 2019.

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

January 15, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Gift Tax, Income Tax, Trusts | Permalink | Comments (1)

Spinning Straw into Gold: Modifying Irrevocable Trusts

TrustsIrrevocable trusts have been part of estate planning for years. They have been used for a variety of purposes, such as to remove assets from a person's estate in order to reduce taxes, to protect assets from creditors, and to provide management of assets for beneficiaries. Historically, these trusts could run for perhaps 100 years or so, but often terminated much earlier than that. More recently, many states have eliminated or modified their laws so as to allow trusts to run forever, or at least for periods that are, for all practical purposes, forever. In addition, creditor protection has become much more important to some persons given the litigious nature of our society. The larger generation-skipping tax exemption has also fueled an increased interest in keeping assets in trust to avoid future taxes. Thus, there are now many more trusts that will run for very long periods than used to be the case.

Many clients wish to have the benefits of an irrevocable trust but do not like the idea that the trust is actually irrevocable. Estate planners have also sought ways to modify trusts that are irrevocable as a result of changed circumstances or because the planner's client is the beneficiary who objects to the terms of the trust. In response to this, state laws have been evolving over time to permit changes to what were once instruments that could not be modified. These changes raise several issues, both legal and otherwise.

For fiduciaries, this brave new world can be a minefield, exposing the fiduciary to possible litigation for making, or perhaps for not making, a change that state law now permits.

See Sarah Change & Scott Bieber, Spinning Straw into Gold: Modifying Irrevocable Trusts, ThompsonCoburn.com, January 8, 2019.

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

January 15, 2019 in Articles, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation, Trusts | Permalink | Comments (0)