Wills, Trusts & Estates Prof Blog

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

Tuesday, April 23, 2019

Record Rise in Decision-Making Powers Given to Friends and Family [UK]

PoaA Lasting Power of Attorney (LPA) is a legal document that allows a person to appoint another individual to make legal and health-related decisions on their behalf, in cases of lost mental capacity. The number of new LPAs in the United Kingdom have tripled over the last five years, from 273,600 in 2013 to 800,400 in 2018, according to a law firm by the name of Wilsons.

People may be living longer, but the chance that their quality of life may deteriorate also increases, raising the numbers likely to lose their decision-making capacity during their lifetime. The Office for National Statistics projects that 14.3 million people will be aged 65 and over in the United Kingdom in 2026, well above the 11.3 million that were in that age bracket in 2016.

Alison Morris, a partner at Wilsons, says that people should be thinking about making an LPA early on. "LPAs act as an insurance policy because it is not just the elderly who lose decision-making capacity. It can happen to anyone at any age.” But some lawyers are concerned that they can put people at risk of exploitation by those that they trusted the most. Court actions against people with LPAs for vulnerable people rose by 71% last year, according to data released in December by Nockolds, a law firm. These numbers show that the Office of the Public Guardian made 465 applications to the Court of Protection to censure or remove “deputies” in 2017-18, up from 272 in the previous year.

See Lucy Warwick-Ching, Record Rise in Decision-Making Powers Given to Friends and Family, Financial Times, April 19, 2019.

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

April 23, 2019 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0)

Monday, April 22, 2019

Article on Less Trust Means More Trusts

TrustestateBridget J. Crawford recently published an Article entitled, Less Trust Means More Trusts, Tax Law: Tax Law & Policy eJournal (2019). Provided below is an abstract of the Article.

The word “trust” has multiple meanings. In everyday speech, it refers to a feeling of confidence associated with integrity, such as trusting that a friend will keep a secret. In the financial context, some law students, lawyers and lucky individuals also understand that a trust is a near-magical device that splits legal and equitable title. A trustee holds formal legal title to property for the benefit of a beneficiary simply because the grantor declares it to be so. By turning the spotlight on “trust,” in both senses of the world, one can discern fault lines in contemporary U.S. political and legal structures. These are made even plainer when examined through the lens of ongoing litigation involving human embryos created by actress Sofia Vergara and her former fiancé.

Just as termites can enter homes through foundational cracks or wood brought from the outside, interpersonal, community or structural confidence may erode in the face of hostility, indifference or inequality. Similarly, as termites can slowly damage a home over a period of years before the harm becomes visible, the beneficial form of ownership known as a trust gradually – and then suddenly – has morphed almost beyond recognition over the last twenty-five years. Eaten away are the traditional limitations on trust duration, trust modification and the type of property that can be held in trust. In some states, irrevocable trusts can last forever, be decanted to another trust with entirely different terms, or even hold legal “title” to human embryos. These changes to centuries of trust law reveal changing attitudes about wealth, property ownership, and personal autonomy. If society truly values equal opportunity for all people, then trust – and trusts – need attention.

April 22, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Television, Trusts | Permalink | Comments (0)

7 Celebrity Estate Planning Pitfalls

WillCelebrities have made the news numerous times for either not performing any estate planning, or not enough planning. Here are a few things that any person can learn from celebrities mishaps to plan for different situations:

  • Plan for the unknown
    • No one has a crystal ball (that actually works), so there is a chance that after you make your will you could have a child or a child on the way that is not mentioned. The pretermitted statute of your state could allow the child to not be completely disinherited, but this could throw your entire succession plan off.
  • Plan early
    • People can die at any age, either by accident, addiction, sudden disease, or any other unfortunate tragedy. Planning early is the only way to know that your estate is in order before your death.
  • Update your estate plan
    • Every major life event can alter the way you want your assets to be distributed, whether it be the death of a family member, the birth of a child, or your own marriage.
  • Be specific
    • Do not leave anything to the discretion of the beneficiaries to separate, because this could cause discord among them.
  • Consult a tax professional
    • One of the goals of estate planning is to minimize estate taxes to maximize the gifts to your beneficiaries, and the professionals will know the most efficient ways to do it.
  • Fund the trust
    • If you establish a living trust, remember to place assets in it before you pass away. If you fail to do so, the trust will not be valid and your estate will be passed through the probate process.
  • Plan, period
    • Failure to plan and lack of proper estate planning can cost you and your beneficiaries plenty of wasted time, money and energy.

See Lerea Funderburg, 7 Celebrity Estate Planning Pitfalls, Rolling Out, April 21, 2019.

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

April 22, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Trusts, Wills | Permalink | Comments (0)

Washington State Could Become First State to Allow Human Composting

TreeWashington state Senate and House of Representative passed bill 5001 on Friday which would allow residents to take part in natural organic reduction” of human remains. The bill reportedly passed easily and with bipartisan support, having taken years in the making to get the bill this far.

Research showed that careful composted human remains could be safe for use in a household garden, and that a trial that involved six backers that agreed to organic reduction. The results were positive and “the soil smelled like soil and nothing else." Democratic state Sen. Jamie Pedersen stated that, “People from all over the state who wrote to me are very excited about the prospect of becoming a tree or having a different alternative for themselves.” The process will reportedly cost $5,500.

See Edmund DeMarche, Washington State Could Become First State to Allow Human Composting, Fox News, April 21, 2019.

April 22, 2019 in Current Affairs, Current Events, Death Event Planning, Estate Planning - Generally, Science | Permalink | Comments (0)

Sunday, April 21, 2019

Article on Boilerplate in Pour-Over Wills

WillMark Glover recently published an Article entitled, Boilerplate in Pour-Over Wills, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

In their intriguing and innovative article, Boilerplate and Default Rules in Wills Law: An Empirical Analysis, 103 Iowa L. Rev. 663 (2018), Professors Reid Kress Weisbord and David Horton conduct an empirical examination of the use of boilerplate provisions in wills. This response essay explores the consequences of their decision to exclude pour-over wills from their data set.

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

Saturday, April 20, 2019

Article on Prescriptive Fiduciary Duties

FiduciarydutyLionel Smith recently published an Article entitled, Prescriptive Fiduciary Duties, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article. 

It has become an orthodoxy in some quarters that fiduciary duties are only proscriptive, forbidding certain actions, and never prescriptive, requiring positive action. I argue that this is a misunderstanding. The argument begins by attempting to explain how this orthodoxy arose, and then by challenging the presuppositions that led to it. The paper goes on to argue that some of the most important duties of a fiduciary are prescriptive duties. It further argues that the label 'fiduciary duties' is properly attached to all of the duties that arise out of a fiduciary relationship, just as 'contractual duties' arise out of a contractual relationship and 'parental duties' arise out of a parental relationship. Along the way, it suggests that we need a better understanding of the notion of a fiduciary conflict of interest; properly understood, this means a conflict between the fiduciary's self-interest and his or her fiduciary duty relating to the exercise of his or her fiduciary powers. This helps us to see that the rule against unauthorized profits is independent of the rules against exercising fiduciary powers while in a conflict situation. The overall goal of the paper is to develop a more accurate understanding of the fiduciary relationship and its many juridical features.

April 20, 2019 in Articles, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Texas Supreme Court Allows Probating Will After 4-Year Statute of Limition

CourtThe Texas Supreme Court reversed and remanded the lower courts' decision that the four-year statute of limitations Section 256.003(a) of the Texas Estates Code prevented an executor from probating a foreign will.

After a man and wife #1 divorced, the man married wife #2. The second wife passed away in 2006, and executed a valid will that left everything to the man. The man never probated her will. The man and the first wife must have remained friendly, because when he later passed away in 2015, he left most of his estate to her as well as making her his executor. When the first wife was going through the man's belongings she discovered the non-probated will of the second wife, and offered the will for probate as a muniment of title nine years after the second wife's death in her position as executor of the man's estate.

The children of the second wife, her were thus her intestate heirs, contested the probate of the will on the grounds that it was far beyond the four-year limitations period stated in the Estates Code. They argued that the "default" of probating the will fell on the man, and thus the entering of the will was inappropriate. The first wife argued that the statute applies to the default of the applicant, and that the man was not the applicant in this regard, but rather the first wife who attempted to probate the will. The trial court granted the children's motion for summary judgement, and the appellate court affirmed.

The Court agreed with the lower courts that the first wife was barred from probating the second wife’s will in her capacity as executor because the first wife was standing in the shoes of the husband’s estate. However, the first wife had standing to probate the second wife’s will in her individual capacity as she was the beneficiary of the husband’s estate, who was the beneficiary of the second wife’s estate. The Court ruled that “under Section 256.003(a), when an applicant seeks late-probate of a will in her individual capacity, only the applicant’s conduct is relevant to determining whether she ‘was not in default.’"

See Ferreira v. Butler, No. 17-0901, 2019 Tex. LEXIS 375 (Tex. April 12, 2019).

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

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

Friday, April 19, 2019

More Than Half of Americans Want to Live to 100

RetirementAccording to a survey conducted by AIG Life & Retirement of those between the ages of 40 to 74 and had at least $50,000 in their retirement accounts, 53% of Americans now have their eyes set on reaching 100 years of age. But of those that seek longevity, half of them are worried their savings will not last, and almost 60% fear running out of that money more than they fear death itself.

Todd Solash, president of Individual Retirement, AIG, is excited that people want to live beyond the century mark. "We all know that life’s a journey, not a destination. We will do anything we can to help them along.’’

Though the respondents are excited at the prospect of leading such a long like, they are also anxious about the struggles they potentially will face. Generating lasting retirement income and the rising cost of health care tied as the most significant financial challenge they said they would face when planning for retirement, coming in at 23%. Only 16% said they were extremely confident that their partner would be able to manage his or her spending from retirement savings if they were to die first.

But respondents also credited financial advisors with allaying their financial fears about growing older and being secure in their retirement. 45% of those with advisors were very to extremely confident that their current retirement savings plan will sustain them to become centenarians. A mere 8% of those surveyed that admitted they did not have financial advisors felt the same level of confidence. Solash said in a prepared statement that "We must fundamentally change how we talk about retirement and replace what has been more of a singular focus on savings with a broader perspective that also includes protected lifetime income sources like annuities as part of an overall retirement plan."

See Jaqueline Sergeant, More Than Half of Americans Want to Live to 100, Financial Advisor, April 10, 2019.

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

April 19, 2019 in Current Affairs, Current Events, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Article on Of Piketty and Perpetuities: Dynastic Wealth in the Twenty-First Century (and Beyond)

CoaEric Kades recently published an Article entitled, Of Piketty and Perpetuities: Dynastic Wealth in the Twenty-First Century (and Beyond), 60 B.C. L. Rev. 145-215 (2019). Provided below is an [] of the Article.

For the first time since independence, in a nation founded in large part on the rejection of a fixed nobility determined by birth and perpetuated by inheritance, America is paving the way for the creation of dynastic family wealth. Abolition of the Rule Against Perpetuities in over half the states along with sharp reductions in, and likely elimination of, the federal estate tax mean that there soon will be no obstacles to creating large pools of dynastic wealth insuring lavish incomes to heirs for generations without end. The timing of these legal changes could hardly be worse. Marshaling innovative economic data extending back centuries, Thomas Piketty has shown that the relatively egalitarian incomes enjoyed in developed economies from the end of World War II until around 1980 were an aberration and that we are in the process of returning to the historical norm of much greater income and wealth inequality. This Article shows, unhappily, that this revival of unending inherited wealth is of even greater concern than previously thought. In doing so, this Article makes three significant contributions to the growing literature on income inequality and its devastating effects. First, this Article reveals the importance of Piketty's work to the law of inheritance, and in particular, it extends his "macro" economic insights to the "micro" level of families and the potential role for newly-legitimated perpetual trusts to instantiate a nobility consisting of a relatively small group of families forever privileged by ever-expanding inherited wealth. Second, this Article identifies three devastating consequences of perpetuities, consequences that more than justify rules restricting perpetuities. Finally, this Article reconceptualizes the harms resulting from perpetuities and proposes innovative normative solutions carefully calibrated to ameliorate those harms.

April 19, 2019 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Cascading Fortunes Require Careful Counsel

WilltestamentThough trillions of dollars are expected to pass down through to the next generations, many individuals such as Prince and Aretha Franklin are not seeking competent counsel to assist in efficient estate planning. Writing a will is a clear help in ensuring the smooth transfer of people’s wealth to their heirs, but six in 10 Americans do not have one, according to the Princeton Survey Research Associates International.

The culprit could be that until death is staring into a person's eyes, that person has no urgency to circumvent the final consequences of it. “Since people don’t think they’re going to die this week, they put it off to the next year and then the next,” says Christopher Cooke, the Indianapolis-based partner at Cooke Financial Group, which is part of Sanctuary Wealth Partners. Preparation of trusts, powers of attorney and health proxies are also important considerations for many clients in planning for old age and mortality.

Chief executive Kim Luu-Tu of Generations Wealth Management, part of Ameriprise Financial, say that by asking more probing questions about a client’s aims in passing on their fortunes and the circumstances of any heirs, she aims “to make sure advice is coordinated” with the other estate planning professionals. It also is important to ask as a bridge between the generations.“It’s crucial to include the children so that they also understand the wishes of their parents and the duties that they might inherit together with the wealth,” says Mr Cooke.

Stavis & Cohen Financial, part of the Advisor Group, provides online material to clients’ children on topics such as budgeting, individual retirement accounts and trusts.

See Rita Raagas De Ramos, Cascading Fortunes Require Careful Counsel, Financial Times, April 17, 2019.

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

April 19, 2019 in Current Affairs, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)