Wills, Trusts & Estates Prof Blog

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

Saturday, April 30, 2022

Betty White’s Longtime L.A. Home Lists for $10.755 Million, as Her Carmel House Closes for Well Over Ask

Betty whiteFour months after the death of Betty White, her estate sold one of her California homes for $10.775 million, well over its $7.95 million asking price. The three story home in Carmel has ocean view and sits on a 0.3 acre lot. Ms. White and her husband, the late Allen Ludden, purchased the land in 1978 for $170,000 according to property records. They finished building the home in 1981.

The estate is also listing her primary residence, a five-bedroom home in the Brentwood area of Lost Angeles. 

For more information, see Sarah Painter, Betty White’s Longtime L.A. Home Lists for $10.755 Million, as Her Carmel House Closes for Well Over Ask”, Wall Street Journal, April 26, 2022.

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

April 30, 2022 in Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Friday, April 29, 2022

Cher's $1 Million Royalty War With Sonny Bono’s Widow Tested in Court

Cher

Earlier this week, Cher’s lawsuit against Mary Bono for unpaid royalties had its first major court hearing. Cher claims that the Bono Collection Trust is attempting to terminate her 50% share of the composition and recording royalties she was awarding in her 1978 divorce from Sonny Bono. 

According to Bono’s widow, that 50% stake expired with the rights flowing back to Sonny’s heirs. “Sonny could grant Cher his then-current rights, including a 50% royalty interest in his copyrights. Sonny could not however, have signed away his heirs’ future rights of termination.” Bono contends that the federal Copyright Act allows her to terminate the right to royalties that Sonny signed over to Cher during their divorce settlement.

U.S. District Judge John A. Kronstadt gave both sides two weeks to file further arguments ahead of his ruling.

For more information:

See Nancy Dillon, "Cher's $1 Million Royalty War With Sonny Bono's Widow Tested in Court", Rolling Stone, April 25, 2022.

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

April 29, 2022 in Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Thursday, April 21, 2022

Death by Deduction: Section 2058 and the Decline of State Death Taxes

Jeffrey A. Cooper recently published an article entitled, Death by Deduction: Section 2058 and the Decline of State Death Taxes, Wills, Trusts, & Estates Law ejournal (2022). Provided below is the abstract to the Article: Estate planning

This article illustrates how, and seeks to explain why, the deduction for state estate taxes (Internal Revenue Code Section 2058) seems to have had no meaningful effect on state tax policy.

Since the deduction for state estate taxes reduces the amount of federal estate taxes paid, the net effect is to shift to the federal government some of the cost of these state death taxes. Prevailing theories of tax policy suggest that state governments will structure their tax systems to maximize this type of available deduction. But theory has not borne out in practice. To the contrary, most states have responded to enactment of Section 2058 not by restructuring their existing state estate taxes to maximize this federal deduction but rather by entirely abandoning state estate taxes. While a remaining group continue to impose those taxes, they have failed to structure those taxes in a manner that would optimize the deduction. In short, the 2058 deduction seems to have had extremely little, or perhaps entirely no, effect on state estate tax policy.

This article explores state responses to Section 2058, yielding important lessons about the operation of state legislatures, the political climate surrounding progressive taxation, and the interplay of federal and state taxes.

April 21, 2022 in Articles, Estate Administration, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Tuesday, April 19, 2022

Article: Uncertainty About the Condonation of Formally Non-Compliant Wills, and the Rectification of Cross-Signed Mirror Wills: Is an Act-Based Model the Solution?

James Faber recently published an article entitled, Uncertainty About the Condonation of Formally Non-Compliant Wills, and the Rectification of Cross-Signed Mirror Wills: Is an Act-Based Model the Solution?, Wills, Trusts, & Estates Law ejournal (2022). Provided below is the abstract to the Article: Estate planning

A recent contribution proposed a processual act-based approach to conceptualising wills in South African law. This approach regards a will as the product of a will-making process in which various parties perform specific acts with specific associated forms of intention in order to establish a will. The act-based model also paves the way for the introduction of an intent doctrine in South African law. This article tests the functioning of the proposed act-based model by applying it to two scenarios: the condonation of formally non-compliant wills in terms of section 2(3) of the Wills Act and the rectification of cross-signed mirror wills in terms of the common law. Both scenarios continue to be plagued by uncertainty as a direct consequence of the lack of a proper definition, explanation and contextualisation of testator's intention in South African law. Regarding condonation, it is found that, because the courts are often left guessing or speculating as to testator's intention, they inevitably overemphasise other aspects such as the form of the document to establish intention for the purposes of condonation in terms of section 2(3). An act-based model could ensure that the decision to condone or not to condone relies solely on whether the document embodies the act of testation. If the act of testation is found to be present (no matter in which shape or form, or by whom it was drafted), the document embodying such an act should be condoned. In terms of rectification, in turn, the act-based model highlights the important distinction between content and formality – the act of testation as opposed to compliance with the statutory formality requirements through the execution of a will. It appears that rectification is appropriate only where an error has caused a discrepancy between the testator's true intention and the intention as expressed in the act of testation contained in the will. Rectification seems less appropriate when dealing with cross-signed wills, which are the result of a flawed execution process. Instead, condonation is much better suited for correcting the formal non-compliance of cross-signed wills.

April 19, 2022 in Articles, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (1)

Sunday, April 17, 2022

Britney Spears asks judge to deny mom's request for over $660K in legal fees

SpearsBritney Spears has asked a judge to deny her mother's request for the singer to pay over $660,000 in legal fees.

Lynne Spears' filed a petition in November to request legal fees, in which she claimed that she hired a team "to assist Britney to break the restriction imposed by the conservatorship." 

Britney Spears' attorney Matthew Rosengart filed an objection to the petition for payment on April 5, arguing that "Lynne is a third party to the conservatorship and that there's no authority that says a third party can obtain funds from a conservatee's estate to pay for attorneys hired by that third party.

Rosengart also mentioned that Britney Spears has paid over $1 million over the last decade for Lynne to live in a "large, expensive house" and also argued that Britney pays for Lynne's "utilities, telephone services, insurance, property taxes, landscaping, pool work, pest control, repairs, and maintenance, totaling $1.7 million. . ." 

A ruling has not yet been made. 

See Melissa Roberto, Britney Spears asks judge to deny mom's request for over $660K in legal fees, Fox Business, April 8, 2022. 

April 17, 2022 in Estate Administration, Estate Planning - Generally, Guardianship | Permalink | Comments (0)

Saturday, April 16, 2022

Florida Appeals Court Says No Fees and Costs Reimbursement To Personal Representative From Sale Of Homestead Property

Estate planningIn Lanford v. Phemister, the Florida Fifth District Court of Appeals "reversed a probate court's order permitting the personal representative fees and costs to be paid from proceeds of the sale of protected homestead property. . ." 

When Mary Lee Dillard ("Decedent") died in 2016, she left some personal property to her sister, but left the majority of her assets, including homestead real property to a testamentary trust. Decedent's sister, Billie Jo Schell was the primary beneficiary of the testamentary trust while the Kirk Family Charitable Trust was the contingent remainder beneficiary. 

Robin Phemister was appointed the personal representative of Decedent's estate as well as the trustee of the testamentary trust created in Decedent's will. 

The Florida probate court determined that "Decedent's home constituted exempt homestead property, and that constitutional homestead protections inured to Phemister, as testamentary trustee, for Schell's benefit." The Florida Probate court then authorized Phemister, as trustee, to sell the homestead property, and the property was eventually sold. 

Schell died in 2018 and the residuary of the Decedent's estate passed to the Kirk Trust. J. Scott Lanford was the trustee of the Kirk Trust. 

Phemister petitioned the court to disburse the proceeds from the homestead property's sale to pay for her fees. Lanford objected, arguing that the homestead sale proceeds could not be used to pay Phemister. The Florida probate court eventually awarded reimbursement of Phemister's costs and attorney's fees and Lanford appealed. 

The Florida Fifth District Court of Appeals reversed the decision following the well-established law that constitutionally protected homestead property is not subject to the expenses of estate administration. 

See Florida Appeals Court Says No Fees and Costs Reimbursement To Personal Representative From Sale Of Homestead PropertyProbate Stars, April 11, 2022. 

April 16, 2022 in Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Thursday, April 14, 2022

Nearly 70% of millionaires are worried about leaving ‘too much’ money to their kids, survey finds

RichWealthy celebrities and entrepreneurs like Daniel Craig, Warren Buffet, and Kevin O'Leary are just a few of many that have expressed concern for leaving too much money to their children. 

Results from a survey conducted by The Motley Fool, which asked 2,000 individuals with a net worth over $1 million about their attitudes toward inheritances, showed that one of the top concerns of high net worth individuals was "the possibility of leaving too much money for their heirs, something 67% of respondents mentioned." 

Many of the respondents were concerned about "the effects of leaving too much money to their heirs, including that the wealth would be 'used irresponsibly' or that it 'would cause beneficiaries to be lazy.'"

According to Jack Caporal, Motley Fool research analyst,

[w]hat's clear is that high net worth individuals are concerned about the effects of leaving too large an inheritance. . .They are aware of and actively considering leaving inheritances with conditions that incentivize their heirs to pick up on values that they think are important, such as hard work, doing well in school, and finding a good career track.

The survey showed that 85% of high net worth individuals who had to meet certain conditions to receive their own inheritance agree that it is possible to leave too much money to an heir. 

Despite the concerns of the high net worth individuals that responded to the survey, about 34% of them stated that they planned to leave over 50% of their assets to their heirs. 

See Nicolas Vega,  Nearly 70% of millionaires are worried about leaving ‘too much’ money to their kids, survey finds, CNBC, September 19, 2021. 

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

April 14, 2022 in Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, April 13, 2022

Article: Rebutting the Presumption of Intentional Revocation of a Will by Destruction: An Examination of Electronically Signed and Remotely Witnessed Wills

Christie Gardiner and Lee Aitken recently published an article entitled, Rebutting the Presumption of Intentional Revocation of a Will by Destruction: An Examination of Electronically Signed and Remotely Witnessed Wills, Wills, Trusts, & Estates Law ejournal (2022). Provided below is the abstract to the Article: Wills

The introduction of electronic execution and remote witnessing and attestation of Wills by New South Wales, Victoria and Queensland in response to COVID-19 invites examination of a wide range of foreseeable probate issues. While wet ink Wills ordinarily result in a single static physical document, a Will executed under the interim measures may result in the production of a range of physical, digital or hybrid records. In this article we discuss whether and how this disrupts the common law presumption of intentional revocation of a Will by destruction when the original Will is last traced to the testator’s possession but cannot be found on their death. We argue that the nature of electronic Wills can pose challenges for rebutting the presumption of destruction. These challenges include poor access to digital records, uncertainty as to which record is the original file and which the copy, and the risks associated with ambiguous document storage practices. However, we also suggest that electronic Wills can provide a level of assurance that can overcome some of these challenges, where at least a copy of the Will is available. Electronic signatures may even serve to displace the need for traditional witnessing requirements, potentially broadening access to Will-making in the community.

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

Sunday, April 10, 2022

Taking the Sting Out of “Death Taxes”

Since September 2021, there has been a lot of talk about the Build Back Better Act, which included some major tax increases. However, it is most likely that the Build Back Better Act will not come to fruition. 

Although the Act is likely dead, the contents of the Act may be an indicator of what type of things Congress is likely to focus on in regard to taxes. An example of one of these areas are "death taxes." "Death tax" is a form of transfer tax and is formally refereed to as estate tax. 

There are three types of transfer taxes: 

  1. The gift tax, which applies to gifts made during a life;
  2. The estate tax, which imposes a tax on the gross estate prior to any bequests being made; and
  3. The generation skipping transfer tax, which applies to gifts or bequests that are received by a person who is more than one generation removed from you (for example, a gift an individual makes to their grandchild).

 

Much of the conversation is surrounded around gift tax and estate tax. Congress sets a dollar cap "for gifts that a person can make during life or bequests after death before a transfer tax will apply. . ." This cap is referred to as the "exemption amount." A lot of the talk around the Build Back Better Act was focused on the potential change of this "exemption amount." 

Given the potential impact a change in the exemption amount can be, it is important to plan for the uncertainty. 

For more information: 

See Dylan H. Metzner, Taking the Sting Out of “Death Taxes”, Jones & Keller, April 1, 2022. 

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

April 10, 2022 in Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Thursday, April 7, 2022

Article: The Beneficiary’s Ownership Rights in The Trust Res in A Liberal Property Regime

Hanoch Dagan and Irit Samet recently published an article entitled, The Beneficiary’s Ownership Rights in The Trust Res in A Liberal Property Regime, Wills, Trusts, & Estates Law journal (2022). Estate planning

Provided below is the abstract to the Article: 

This article argues that a liberal theory of property rights can help us resolve a century old debate about a foundational aspect of the trust, namely, the nature of the beneficiary’s interest. According to orthodoxy, the beneficiary has a (weak form) of proprietary right to the trust res. But proponents of this view found it hard to defend it from attacks by Maitland and his successors who argue that central aspects of the beneficiary’s right, like deferral to bona fides purchaser for value, or the lack of right of standing to sue tortfeasors, imply that the beneficiary’s rights should be classified as a personal right against the trustee. The reason for their failure, we argue, is the misguided picture of property rights, as essentially the right to exclude, which they share with proponents of the obligation theory. For liberal property theory, by contrast, divided ownership, of the kind exemplified by the trust, takes pride of place. Thus, when read through the right lens, orthodoxy is best placed to account for all aspects of the beneficiary’s right, including the shielding rule, which the obligation theory finds impossible to explain on a conceptual or normative levels.

April 7, 2022 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)