Wills, Trusts & Estates Prof Blog

Matthew Perry's Will Explained As Bank Account Total Raises Eyebrows

Recent documents have shown Friends star Matthew Perry had a little over $1.5 million in his personal bank account at the time of his death. This shocked some people because the actor was reportedly worth $120 million. At the height of Friends success, he was earning $1 million per episode, and after, about $20 million a year in royalties. 

Jonathan Forster, a probate law expert explained that this is not uncommon and most of Perry's assets are likely in a trust. Forster said the reason why we use trusts as opposed to wills is that trusts also avoid probate, and probate is a court-supervised transfer of assets, and probate is public.

"When we're typically doing an estate plan with a will and a trust, the will simply leaves assets to the trust," Forster said, which explained why there were no properties in Perry's name. "You would fund [the trust] during your lifetime. The will would be kind of like a catch-all, where if there are any assets owned by the person when they pass away, the will is directed to transfer those assets into the trust."

One of the trustees listed on Perry's trust, Lisa Ferguson, is named on the title of his Pacific Palisades home where he died in October 2023. Ferguson was Perry's business manager and she was named as one of several people in the actor's will. Others named in the will were his parents, siblings, his ex-girlfriend, and close friend.

For more information see Shannon Power "Matthew Perry's Will Explained As Bank Account Total Raises Eyebrows", Newsweek, July 4, 2024.

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

Grief, Then Paperwork: The Messy, Thankless Job of an Estate Executor

Managing the estate of a deceased relative is a challenging and time-consuming task that can strain relationships. The executor, usually named in the will, must handle assets, debts, taxes, and distribution to heirs. This role often comes unexpectedly and is burdensome.

Greg Kern, for example, spent over 200 hours managing his father-in-law’s $430,000 estate, causing family tensions. Many underestimate the time and cost involved, often requiring legal assistance, which can be expensive and lengthy. Without a will, complications and delays are common. Executors are sometimes unwilling or surprised by their appointment. Estate lawyers advise choosing capable and willing executors, considering impartial third parties to avoid family conflicts. Kern’s experience involved significant paperwork and family disagreements, particularly regarding the sale of a house. He faced challenges closing financial accounts and dealing with legal requirements, such as obtaining special certifications.

In cases without a will, the process can be more complex. Pat Kayajanian’s estate, managed by her stepdaughter, faced delays and legal hurdles due to the lack of a will and stepfamily status. Similarly, Violet Shockley's executor struggled to locate all heirs.

Issues also arise when minors inherit. Texas law requires court-appointed attorneys to assess the suitability of the surviving spouse as an administrator, adding months to the process. Charlotte Sanders, whose husband died without a will, faced delays accessing funds and had to navigate court requirements to protect her children’s interests.

Managing an estate is often a thankless, complicated job requiring significant effort and legal navigation.

For more information see Ashlea Ebeling "Grief, Then Paperwork: The Messy, Thankless Job of an Estate Executor", The Wall Street Journal, June 29, 2024.

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

Warren Buffett Gives Us a Preview of His Will

In an interview with The Wall Street Journal, Buffett—the chairman and chief executive of Berkshire Hathaway—said that after his death nearly all of his remaining wealth will go to a new charitable trust overseen by his daughter and two sons. The legendary investor also made clear his giving to the Bill & Melinda Gates Foundation, to which he has donated billions, will come to an end. 

His three children must decide unanimously which philanthropic purposes the money then goes to serve. Buffett, who is 93 years old, said he hasn’t laid out marching orders for Susie, Howie and Peter Buffett. But he shared his personal perspective about giving. Buffet instructed his children to "help the people that haven't been as lucky as we have been" and has done so already through the Gates Foundation, as well as 4 other foundations connected to his family. 

Buffett served as a trustee of the Gates Foundation until 2021; he resigned less than two months after the couple announced their plans to divorce. Melinda French Gates recently resigned from the foundation, with her last day earlier this month. Buffett declined to say how long his estate plan had been in place. He described its contours in a November press release about supplemental gifts of Berkshire shares to the four family foundations. 

For more information see Karen Langley "Warren Buffett Gives Us a Preview of His Will", The Wall Street Journal, June 28, 2024.

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

Retirees’ Life Savings Can Vanish in Continuing Care Bankruptcies

Continuing care retirement communities (CCRCs) promise lifetime housing and care for seniors, often requiring substantial upfront deposits with the assurance of refunds if the resident moves or passes away. However, your life savings are at risk when CCRCs file for bankruptcy. Since March 2020, at least 14 such facilities in the U.S. have declared bankruptcy, jeopardizing the financial security of their residents. This trend highlights a significant, often overlooked, risk for seniors who rely on these communities for their long-term care needs.

The financial instability of CCRCs stems from various factors, including mismanagement and market pressures. For example, residents of Henry Ford Village, a CCRC in Michigan, faced the potential loss of their deposits when the facility declared bankruptcy in 2020. These financial collapses can devastate retirees, many of whom have invested their entire life savings into securing a place in these communities, believing it would be their last move.

The impact of CCRC bankruptcies extends beyond financial losses. Residents and their families face significant emotional and logistical challenges, including the stress of finding new accommodations and care. The complex nature of bankruptcy proceedings often leaves them uncertain about the recovery of their funds. As the prevalence of these bankruptcies grows, it underscores the need for better regulation and oversight to protect the financial and personal well-being of the aging population​.

For more information see Akiko Matsuda "Retirees’ Life Savings Can Vanish in Continuing Care Bankruptcies",  The Wall Street Journal, June 13, 2024. 

Managing an Inheritance: When 'Mom's Money' Becomes Yours

Millennials are set to inherit a substantial amount of wealth over the next two decades, as the silent generation and baby boomers transfer their assets. This shift, amounting to an estimated $90 trillion, could significantly impact millennials' financial futures. However, many millennials might not receive as much as they anticipate. A disconnect exists between millennials' expectations and the actual amounts boomers plan to leave, often due to high healthcare costs that diminish potential inheritances​.

The influx of wealth can create both opportunities and challenges for millennials. Financial advisers note that many young inheritors are unprepared to manage large sums of money, leading to potential stress and financial mismanagement. Guidelines for managing inheritances typically recommend spending a small portion on personal enjoyment, donating to charity, and prioritizing significant financial goals such as debt repayment or home purchases​​.

Despite the potential for increased wealth, millennials face unique economic pressures, including student debt and an inaccessible housing market. The financial confidence among this generation remains low, partly due to economic instability witnessed during their formative years. This cautious approach could either hinder their financial growth or safeguard against reckless spending, depending on individual perspectives and preparedness​.

For more information see "Managing an Inheritance: When 'Mom's Money' Becomes Yours", The New York Times, June 8, 2024. 

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

Tony Bennett's daughters sue their siblings, alleging they're mishandling the singer's family trust

Tony Bennett's family is entangled in a legal battle over control of his estate following the singer's death in July 2023. His widow, Susan Benedetto, who was married to Bennett for over 15 years, is facing a lawsuit from Bennett's two sons, Danny and Dae Bennett. The sons allege that Susan exerted undue influence over their father, particularly after he was diagnosed with Alzheimer's disease in 2016, to gain control over his affairs. They claim she manipulated him into making changes to his will and other estate planning documents, thereby securing a significant portion of his assets for herself.

The lawsuit filed by Danny and Dae Bennett asserts that Susan's influence intensified as their father's health deteriorated. They argue that Susan isolated Tony from his family and friends, restricting their access to him, and undermining his mental competence to manage his own affairs. The sons are seeking to have the changes made to the estate plan revoked, arguing that Tony was not in a sound state of mind when these decisions were made. They are also requesting an accounting of the assets and income generated from Tony's music and business ventures.

Susan Benedetto, on the other hand, has denied these allegations, stating that she acted in accordance with Tony's wishes and always prioritized his well-being. She emphasized that Tony's love for music remained strong until the end, as evidenced by his final performances and recordings. The dispute has highlighted the complexities and emotional turmoil often associated with estate management, particularly when it involves a high-profile figure like Tony Bennett, whose legacy and significant assets are at stake​

For more information see Edward Segarra "Tony Bennett's daughters sue their siblings, alleging they're mishandling the singer's family trust," USA Today, June 13, 2024.

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

Widow, 96, preparing to celebrate her birthday was killed in alleged murder-for-hire plot at her home

In 2022,  96-year-old widow  Violet Evelyn Alberts was tragically killed at her Montecito, California home in an alleged murder-for-hire plot, revealing a complex scheme of financial exploitation. 

Authorities discovered Alberts dead in her bed on May 27, 2022, with evidence of a broken window suggesting forced entry. A subsequent investigation by the Santa Barbara County Sheriff's Office unveiled a scheme where Alberts was deceived into signing over her valuable home by a woman named Pauline Macareno, who took advantage of Alberts' vulnerability and financial needs. 

Macareno, along with accomplices, engaged in financial elder abuse, including forging documents and establishing fraudulent entities to gain control of Alberts' assets. Macareno has been convicted and sentenced to six years in state prison for fraud. Three other individuals, Harry Basmadjian, Henry Rostomyan, and Ricardo MartinDelCampo, were arrested in connection to the case, facing charges ranging from murder to conspiracy and solicitation of murder. 

For more information see Minyvonne Burke “Widow, 96, preparing to celebrate her birthday was killed in alleged murder-for-hire plot at her home”, Aol., March 9, 2024.

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

Formal Opinion 506, Responsibilities Regarding Nonlawyer Assistants

The American Bar Association Standing Committee on Ethics and Professional Responsibility recently published Formal Opinion 506, Responsibilities Regarding Nonlawyer Assistants on June 7, 2023.  Provided below is an introduction the opinion:

Nonlawyers provide tremendous client and lawyer support for law firms. This Formal Opinion addresses a lawyer’s ethical obligations when the lawyer delegates to a nonlawyer specific prospective client-intake tasks. Lawyers may train and supervise nonlawyers to assist with initial client intake tasks if the lawyers have met their obligations for management and supervision of the nonlawyers pursuant to ABA Model Rule of Professional Conduct 5.3 and prospective clients are given the opportunity to consult with the lawyers to discuss the matter.

Article: Creditors’ Rights in Property Subject to a Beneficiary’s Right of Withdrawal

S. Alan Medlin (David W. Robinson Professor of Law at the University of South Carolina School of Law) and F. Ladson Boyle (Charles E. Simons, Jr. Distinguished Professor Emeritus of Federal Law at the University of South Carolina School of Law) recently published an article entitled, Creditor’s Rights in Property Subject to a Beneficiary’s Right of Withdrawal, ABA Real Property, Trust and Estate Law Journal, 2022. Provided below is an abstract of the Article:

Estate plans often give trust beneficiaries powers of withdrawal for both tax and nontax reasons. For tax reasons, these powers of withdrawal are typically limited, such as a “five or five power” or a so-called Crummey power commonly pegged to the annual gift tax exclusion amount. A central issue with limited powers of with-drawal is the right of a beneficiary’s creditor to reach trust property subject to the beneficiary’s power to withdraw. Recent uniform statutes, such as the Uniform Trust Code and the Uniform Power of Appointment Act, as well as the Restatement (Third) of Trusts, provide guidance. This Article discusses the typical reasons for creating powers of withdrawal and the historical and recent treatment of the rights of creditors of trust beneficiaries with powers of withdrawal, along with some planning considerations.

Article: Texas Estate Planning Judicial Update: Summer 2022 Edition

Gerry W. Beyer (Governor Preston E. Smith Regents Professor of Law at Texas Tech University School of Law) recently published an article entitled, Texas Estate Planning Judicial Update: Summer 2022 Edition. Provided below is an abstract of the Article:

This article discusses recent judicial developments (first half of 2022) relating to the Texas law of intestacy, wills, estate administration, trusts, and other estate planning matters. The discussion of each case concludes with a moral, i.e., the important lesson to be learned from the case. By recognizing situations that have led to time consuming and costly litigation in the past, estate planners can reduce the likelihood of the same situations arising with their clients.