Wills, Trusts & Estates Prof Blog

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

Wednesday, April 14, 2021

Odds of Dying

AccidentIt is normal for us to fear things—like death. These fears can help us respond more quickly to dangerous situations, or avoid them entirely. The worry and fear associated with these dangerous situations allow us to assess risk. 

However, it is important that we do not overestimate, or underestimate these risks. Quite frankly, there are a lot of ways to die, so accurately assessing the risks of danger and the possibility of death could prove to be difficult. 

One way to start is to know the odds, which will help you identify the ways—and your chances—to beat them. 

One interesting fact is that your odds of dying from an accidental opioid overdose is greater than your odds of dying in a motor-vehicle crash. 

The National Safety Council recently published a brief that contains helpful statistics, and even an informational video that provide information on the lifetime odds of death for selected causes. 

See Odds of Dying, The National Safety Council: Injury Facts, last visited April, 14, 2021. 

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

April 14, 2021 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Client Alert: Are Changes Afoot for Estate and Gift Taxes?

Wealth taxUnder the current administration and "composition of Congress," changes to estate and gift taxes are likely. Senator Bernie Sanders recently proposed tax reform legislation that would "make major changes to the current estate and gift tax rules." 

If the legislation were adopted, there would be a reduction to the estate tax lifetime exemption. Under the proposed legislation, the current exemption ($11.7 million per taxpayer) would drop to $3.5 million, which would not be adjusted for inflation. Further, the gift tax lifetime exemption would be reduced to $1 million. 

Also, "gifts to irrevocable trusts and certain family entities, and gifts of assets subject to prohibitions on sale and those that cannot immediately be liquidated will be subject to a limit of $30,000 per donor annually." 

The rate of the estate tax which would change to a progressive rate and increase from 40 percent to 45 percent for taxable estates between $3.5 million and $10 million, "50 percent for estates between $10 million and $50 million, 55 percent for estates between $50 million and $1 billion, and 65 percent for estates over $1 billion." 

If adopted, the new legislation would affect the usefulness of grantor trusts, GRATs, and family entity discounts. 

The proposed legislation would also greatly affect trusts that are considered to be owned by a grantor for income tax purposes, which would be subject to federal estate tax upon the death of the grantor. Further, distributions from grantor trusts would be considered gifts from the grantor. 

Assuming that the proposed legislation, which would take effect in January 2022, would not be retroactive, taxpayers should consider taking advantage of the current laws so that they do not miss out on them if the proposal passes. 

See Carol A. Sobczak, Client Alert: Are Changes Afoot for Estate and Gift Taxes?, Shumaker, April 9, 2021. 

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

April 14, 2021 in Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, New Legislation | Permalink | Comments (0)

Tuesday, April 13, 2021

Pennsylvania Supreme Court: Trust Beneficiaries Can Examine Trustee’s Attorney’s Billing Records If Trust Is Paying Fees

Estate planningIn In Re Estate of McAleer, the Pennsylvania Supreme Court granted review to determine "whether the attorney–client privilege and the work product doctrine may be invoked by a trustee to prevent disclosure to a beneficiary of communications between the trustee and counsel pertaining to attorney fees expended from the trust corpus." 

The Court says no, if the trust is paying for the trustee's attorney's fees. 

William McAleer ("Trustee") is the sole trustee of a revocable trust that was created by his father, who is now deceased. The Trust was created for the benefit of the Trustee and his two stepbrothers. 

In 2014, the Trustee filed a first and partial accounting of the Trust. The Trustee retained two separate law firms to respond to his stepbrother's objections to the accounting. The probate court dismissed the objections following an evidentiary hearing. 

The Trustee's filings in Pennsylvania court indicated that about $124,000 had been expended from the trust for attorney's fees and costs through December 2015. Trustee's stepbrothers filed a petition for special relief to "determine the reasonableness of those expenses." 

In April 2016, Trustee filed a second and final accounting, which were also objected to by his stepbrothers. Trustee argued that he was never under any obligation to provide his stepbrothers with copies of legal invoices because they were protected by attorney–client privilege. 

The Pennsylvania court ordered the Trustee to forward unreacted attorney's fee billing invoices to his stepbrothers within 30 days. Trustee disclosed the trustee invoices but filed an interlocutory appeal in regard to the attorney invoices. 

The court explained that a party seeking to assert privilege must first set forth facts to establish that the privilege has been properly invoked.

The court concluded that the Trustee failed to present facts establishing the privilege. 

The Pennsylvania Supreme Court stated in its decision that the attorney–client privilege is not absolute. Further, when the interests protected by the privilege "conflict with weightier obligations, the former must yield to the latter." The Court asserted that this case was one in which this conflicting duty was present. 

Ultimately, the Court held that the fiduciary duty to furnish trust-related information to beneficiaries outweighed the asserted attorney–client privilege. 

See Pennsylvania Supreme Court: Trust Beneficiaries Can Examine Trustee’s Attorney’s Billing Records If Trust Is Paying Fees, Probate Stars, April 13, 2021. 

April 13, 2021 in Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Article: Regulating Egoism in Perpetuity

John Picton recently published an article entitled, Regulating Egoism in Perpetuity, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

While ordinary trusts are time-limited, the charitable foundation lasts forever. It is, in consequence, a perpetual legal vehicle through which a donor might seek to egoistically project her character and values into the future after her death. Unfortunately, that self-serving drive leads to bad charity, causing waste, as it crowds out higher social utility – or altruistic – uses of capital. Through attention to the concept of egoism, as it has developed in contemporary donative economics (‘egoistic theory’),this chapter explores the nature of the motivation to create perpetual foundations, and, flowing from that theorisation, it then critically develops a policy justification for the protection of the donor’s plans (plan-protection), alongside development of a legal-conceptual method for the utility-orientated reform of foundations.

April 13, 2021 in Articles, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Monday, April 12, 2021

Land Rover 'gun bus' to carry Prince Philip's casket to funeral

GunbusPrince Philip, who passed away on April 9 at the age of 99, apparently had less than traditional plans for the transportation of his casket.

According to Buckingham Palace, Prince Philip's casket will be carried through the grounds of Windsor Castle to his funeral in a custom Land Rover Defender 130. 

The Land Rover was built by Foley Specialist Vehicles for the Duke of Edinburgh in 2016 and is referred to as the Land Rover 'gun bus.' The Duke of Edinburgh helped design the vehicle that belonged to Prince Philip. 

The rover was built to "carry hunting parties around the grounds of one of the royal family's Sandringham House Estate." 

The Land Rover has been "further modified" for funeral use, which Prince Philip assisted with himself. 

Although caskets bearing members of the royal family have traditionally been transported by horse-drawn gun carriages, Prince Philip seemly wished to take a different route, which makes since as he and Queen Elizabeth were often seen taking their strolls in Land Rovers. 

See Gary Gastelu, Land Rover 'gun bus' to carry Prince Philip's casket to funeral, Fox News, April 12, 2021. 

April 12, 2021 in Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Article: To Good Purpose: Non-Charitable Purpose Trusts for the Specific Purpose of Holding Shares in Perpetuity in Singapore

Terence Yeo and Victoria Liu recently published an article entitled, To Good Purpose: Non-Charitable Purpose Trusts for the Specific Purpose of Holding Shares in Perpetuity in Singapore, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

This article considers the issue of whether Singapore should amend its trust laws to allow for non-charitable purpose trusts (NCPTs) for the specific purpose of holding company shares in perpetuity. The authors argue that such trusts should be allowed for two reasons. First, NCPTs in general should not be regarded as repugnant to the trust concept. Secondly, the practical advantages of allowing non-charitable trusts in a limited fashion outweigh the disadvantages. The article concludes by proposing possible reforms to the Singapore trust legislation.

April 12, 2021 in Articles, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Sunday, April 11, 2021

Article: Trust Law Theory in Japan - Controversy as to Fundamental Construction of Trust

Hiroyuki Watanabe recently published an article entitled,  Trust Law Theory in Japan - Controversy as to Fundamental Construction of Trust, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article. Estate planning

This paper describes the history of the academic theories on Trusts in Japan, focusing on how the theories have understood the fundamental construction of Trust.

Ever since the enactment of the former Trust Act, the characteristics and essential elements of the act of creating a trust have been discussed by academic society. In the background to this unsettled debate may be the peculiar nature (or heterogeneity) of trust law in terms of the Japanese legal framework. As is already well known, most of the provisions of the Civil Code, which is the basic law of the Japanese private law system, trace their roots back to civil law jurisdictions such as Germany and France. On the other hand, the legislative history of trust law directly originated in the use system under the common law tradition. Thus, the Japanese trust system is sometimes viewed as a "heterogeneous mechanism just like oil floating on water," and in the history of interpretation of trust law, discussion about systematic consistency and integrity within the entire legal system, in other words, how the legal interpretation theory can mitigate the heterogeneity between the Civil Code provisions and trust system, has been considered as a very important issue. The provision of the definition of trusts, in particular, has been the key subject of this contentious debate.

In this paper, I first discuss (1) " Theory of right in Personam " as the "Generally Accepted Theory " of Japanese trust law, and then (2) Shinomiya’s Theory," which develops his own "Substantial Legal Entity Theory". Then, while summarizing (3) "Development of Discussions after the Shinomiya’s Theory", I will finally describe some (4) Personal View.

April 11, 2021 in Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Saturday, April 10, 2021

Article: Limitation Periods and Constructive Trusts in Malaysia

Ying Khai Liew recently published an article entitled, Limitation Periods and Constructive Trusts in Malaysia, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article. Estate planning

Malaysia, as a former British colony, has inherited much of its trusts law from the English. One notoriously difficult area of law is constructive trusts. Precisely when and why constructive trusts arise are fundamental but imperfectly understood matters. This is unfortunate, because the lack of understanding might, in practice, be critically relevant for the determination of liability. To illustrate, consider the ongoing infamous ‘1MDB’ saga. 1MDB was a government-run strategic development company (allegedly) utilized by the former Prime Minister of Malaysia, Najib Razak, and many others (including his aide, Jho Low) to siphon money to their personal and company accounts. The key events of the highly complex fraudulent scheme took place over a six-year period, leaving behind a long money trail which crossed multiple jurisdictional borders and involved numerous shell companies, international banks, investment companies, and even Hollywood celebrities. While the Malaysian government has focused its efforts on the criminal liability of those allegedly involved, little attention has thus far been paid to the potential private law liabilities, either of those directly breaching trusts or fiduciary duties, or those receiving proceeds of those breaches. These claims would likely be pursued as a matter of course, for example by the liquidators or new directors of 1MDB. At that stage the law of constructive trusts would be crucial for the determination of liability.

One of the first practical hurdles would be the question of limitation: are the constructive trust claims time-barred? As with the law of constructive trusts, the law of limitation in Malaysia is closely modelled on English law. Here, again, the interactions between Malaysian and English law throw up interest but difficult issues of law. This article considers those interactions in the particular context of the applicable limitation periods to constructive trusts claims in Malaysia, to evaluate and assess how English jurisprudence and local developments have shaped the law.

April 10, 2021 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Thursday, April 8, 2021

Article: The Commodification of Public Land Records

Reid K. Weisbord and Stewart E. Sterk recently published an article entitled, The Commodification of Public Land Records, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article. Estate planning

The United States deed recording system alters the “first in time, first in right” doctrine to enable good faith purchasers to record their deeds to protect themselves against prior unrecorded conveyances, and to provide constructive notice of their interests to potential subsequent purchasers. Constructive notice, however, works only when land records are available for public inspection, a practice that had long proved uncontroversial. For centuries, deed archives were almost exclusively patronized by land-transacting parties because the difficulty and cost of title examination deterred nearly everyone else.

The modern information economy, however, propelled this staid corner of property law into a computer age in which land records are electronically maintained and instantaneously accessible over the internet. That development transformed public land records into a marketable commodity independent of the deed recording system’s notice-giving function. In response to booming demand for big data, content extracted from public land records (name, home address, marital status, among other personal information) is now actively traded on the internet and routinely purchased by commercial firms for targeted marketing and customer prospecting. Data from public land records are now more accessible than ever before, representing a win for transparency, but, as tragically illustrated by the recent high-profile attack against a federal judge, an erosion of privacy that can dangerously equip wrongdoers with on-demand entrée to personal information.

This Article provides the first scholarly account of the deed recording system’s transformation from a notice-giving mechanism of property law to a primary supplier of commodified data for sale in the modern information economy. The Article surveys the traditional functions of deed recording, describes the recent migration of deeds from paper to electronic form as the predicate for commodification, and considers the implications of electronic disclosure for privacy, transparency, and the regulation of anonymous entity ownership. The Article concludes by appraising the efficacy of recent privacy reforms under consideration by Congress and state legislatures, and by outlining voluntary precautions that homeowners can implement under existing law.

April 8, 2021 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, April 7, 2021

Billionaire’s Sudden Death Starts Biggest Wealth Transfer of Czech Republic

KellnerPetr Kellner, who was the Czech Republic's richest man at the time of his death, was killed in a helicopter crash last month. Kellner's death "set in motion the biggest wealth transfer of the post-Soviet Union bloc." 

Kellner was among five people killed in the helicopter crash that went down near Anchorage, Alaska. 

Kellner's fortune is valued at $15.7 billion by the Bloomberg Billionaires Index. Kellner's surviving wife and children stand to inherit his fortune, but the "succession arrangements are unclear." 

According to Petr Kincl, an associate partner at PWC Legal, "[a]s organized as Petr Kellner had to be, I’m sure he took care of everything to make the process as simple as possible.” Fortunately, Kellner's company, PPF Group of NV, will be able to carry on without his leadership. 

See Alexander Sazonov, Lenka Ponikelsa, and Krystof Chamonikolas, Billionaire’s Sudden Death Starts Biggest Wealth Transfer of Czech Republic, Bloomberg News, April 2, 2021. 

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

April 7, 2021 in Estate Administration, Estate Planning - Generally | Permalink | Comments (0)