Wills, Trusts & Estates Prof Blog

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

Thursday, August 13, 2020

General Disinheritance Clause Defeats Omitted Child Claim Under California Probate Code

InheritanceHugh O'Brian, best known for his role as Wyatt Earp in the 1950's ABC Western television series, The Life and Legend of Wyatt Earp, died in September 2016. 

In Rallo v. O'Brian, the Court of Appeal of California, Second Appellate District, Division Three, the court considered claims raised by O'Brian's allegedly omitted children under the California Probate Code. One of the issue before the court was "whether a general disinheritance clause could defeat omitted child claims by unknown children born before the execution of a testamentary instrument."

O'Brian established the Hugh O'Brian Trust in January 1992. O'Brian married his long-time girlfriend Virginia in 2006. The Trust was mended multiple times and Virginia was the trustee of the Trust. 

O'Brian's death spurred inheritance litigation. "Adam, James Venverloh, Donald Etkes, and Kimberly Rallo brought claims seeking to receive an intestate share of O'Brian's estate as his unintentionally omitted children under section 21622 of the California Probate Code."

The trustee demurred to both Adam and Kimberly's separate petitions and Venverloh's jointly filed petition on the ground that the failed to state a claim for relief. "The trial court sustained the demurrers as to Kimberly and Adam with leave to amend, and they both filed separate petitions", while Venverloh and Etkers decided not to pursue their claims. 

Kimberly alleged that she was entitled as an omitted child to a share of O'Brian's estate equal to what she would have received if he had died intestate. Adam made the same argument. 

Omitted children are generally children who are born after the execution of a decedent's testamentary documents and who are not provided for in those documents. 

Kimberly and Adam argued that a general disinheritance clause cannot defeat an omitted claim under the California Probate Code, but can only defeat a claim brought by an unknown child born after the execution of a will or trust. The California appeals Court disagreed. 

There court found that, under California law, " a general disinheritance clause can be used to disinherit known and unknown children, born both before and after the execution of the testamentary documents, if the intent to exclude the children is shown in the documents."

See, General Disinheritance Clause Defeats Omitted Child Claim Under California Probate Code, Probate Stars, August 6, 2020.

August 13, 2020 in Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Wednesday, August 12, 2020

Woman with husband’s bones gets close look at Munich Airport

BoxPeople bring a lot of different things to the airport when they travel, toiletries, laptops, tablets, games, playing cards, etc. However, it is not very often, if ever, that a passenger packs a box of bones for a flight. 

Yet, police at Munich Airport got a surprise when they searched a wooden box belonging to a 74-year-old passenger. The box contained the bones of her deceased husband.

"Customs officials, a doctor and prosecutors were called in, and they determined no crime had been committed."

Police learned that the woman and her 52-year-old daughter were on traveling from Greece back home to Armenia via Munich and Kyiv. 

The mother said that her husband died in 2008 and was buried in Thessaloniki, Greece and that she and her daughter decided to bring his remains home to a final resting place in Armenia. 

See, Woman with husband’s bones gets close look at Munich Airport , AP News, August 4, 2020. 

August 12, 2020 in Estate Planning - Generally, Humor, Travel | Permalink | Comments (0)

Pennsylvania Supreme Court: Parent With No Legal Duty To Support Deceased Child Does Not Forfeit Share of Intestate Estate

CashIn Estate of Small v. Small, the issue involved the alleged forfeiture of a parent's share in his child's estate where his child died without a will. The question before the Pennsylvania Supreme Court was "whether an adult decedent, who became disabled after reaching the age of majority, was a dependent child for purposes of the Pennsylvania Probate, Estates and Fiduciaries Code's forfeiture statute."

The decedent was 18 when he was shot and became a paraplegic. The decedent died almost twenty years later at the age of 37, with no spouse and no children. Decedent's mother was granted letters of administration. The decedent's estate was made up of only a $90,000 wrongful-death award. 

Decedent's mother filed a forfeiture petition, arguing that decedent's father forfeited his share of the estate by failing to perform his duty of support.

The main issue was whether decedent was considered a "dependent child". The evidence presented showed that decedent was able to perform all of the ordinary life activities, except for walking. Witness testimony provided showed that decedent was mostly self-sufficient.

The Pennsylvania Orphan's Court denied decedent's mother's petition for forfeiture, finding that decedent was not a dependent child. Decedent's mother appealed arguing that the Orphan's Court "narrowed the scope of the phrase 'dependent child'." The Superior Court affirmed and the Pennsylvania Supreme Court granted further review. 

The Pennsylvania Supreme Court affirmed, holding that the mother failed to demonstrate that the decedent was a dependent child and that the father had a duty of care. 

See, Pennsylvania Supreme Court: Parent With No Legal Duty To Support Deceased Child Does Not Forfeit Share of Intestate Estate, Probate Stars, July 31, 2020.

August 12, 2020 in Estate Planning - Generally, Intestate Succession, New Cases | Permalink | Comments (0)

Tuesday, August 11, 2020

Dash for Cash – Informal Funding of Inheritance Has Hidden Dangers

CashVirginia Hammerle had a few clients who happened upon a cash envelope that belonged to their great-aunt after she passed away. After finding the envelope taped behind a dresser, they realized they were going to have to do some searching to find the rest of it. Their great-aunt did not believe in banks so she hid cash around her house.

Hammerle stated that this is not as rare as you might think. Hiding cash and valuables is "well-known phenomenon" especially for those that went through the Great Depression or who have dementia. Popular hiding spots include "inside the mattress, between the wall boards, behind a loose brick in the chimney, under the floorboard, tucked into clothing, buried under the backyard tree, or taped inside the piano."

Before you consider hiding your life savings in your home, you should know that it is not a good idea.

Having a houseful of cash can be dangerous. "Consider the case of Hee-Haw comedian David “Stringbean” Akeman and his wife who were murdered in 1973 after returning home from the Grand Ole Opry. The villains were two thieves who had heard that Akeman had thousands of dollars hidden in his house because he did not trust banks.  The thieves did not find the money, but they had been right; decades later thousands of dollars were discovered hidden in the couple’s chimney and clothing."

Further, your loved ones may never find your cash, your house could catch fire or be hit by a tornado, the cash could disintegrate or become moldy. Also, the "dash for cash" could leave a bad taste in your loved one's mouths. Your loved ones could become bitter and being racing to find the cash and may not be completely honest about what they find. 

You could also be setting your loved ones up for a criminal investigation once they have to deposit a boatload of cash into the bank. 

When you are estate planning, do not forget to make a plan for the distribution of your cash. 

See Virginia Hammerle, Dash for Cash – Informal Funding of Inheritance Has Hidden Dangers, Legal Talk Texas, August 2, 2020.

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

August 11, 2020 in Death Event Planning, Elder Law, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

How Conservation Easement Tax Shelters Became An Issue In A Current Georgia Congressional Race

Rome"The controversy over syndicated conservation easements tax shelters has raised its ugly head in the Congressional race in the 14th District in Georgia."

It is likely that representation of the district in Congress will be deterred by a primary run off for the Republican Party on August 11th. The runoff candidates for the nomination for the replacement of Tom Graves are neurosurgeon John Cowan and construction executive Marjorie Taylor Greene. 

Below is a statement Marjorie Taylor Greene's campaign issued criticizing her opponent for his connection to the syndicated conservation easement industry:

I’ve never been fond of rats, snakes, and swamp creatures... or liars. My opponent John Cowan is propped up and funded by the good ‘ole boy corrupt Rome swamp that is desperate for special favors and get out of jail free cards. Rome, Ga is plagued by a massive corrupt abusive tax shelter scam currently being investigated by the IRS and the DOJ. . . John Cowan only cares about slithering his way up to the big swamp in DC to join the other swamp creature and play the same age old game of greedy corruption all for power and money. The people won’t stand for this on August 11th! Vote Marjorie Taylor Greene to drain the swamp!"

Ms. Greene is the favorite to win the runoff as she finished first in the primary with 40.3% of the vote. John Cowan  came in second out of six with 21% of the vote. According to his website "he is Pro Trump, Pro Life and Pro Gun and is ready to “fight against any efforts by the left to rebrand socialism, undermine our Constitution or threaten our freedoms”.

If you own property and contribute an easement and passing on your rights to change the property to a qualified organization, you can take a federal income tax deduction for the value of that easement. "Since there is not a lot of market for easements you generally value them based on the difference between the before easement and after easement value of the property."

This allows an investor to invest in an easement and bring in a a whopping amount in tax revenue all for creating an easement. The IRS and the DOJ aren't too fond of the idea and the topic has become an issue in the congressional race. 

See Peter J. Reilly, How Conservation Easement Tax Shelters Became An Issue In A Current Georgia Congressional Race, Forbes, July 31, 2020. 

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

August 11, 2020 in Appointments and Honors, Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Monday, August 10, 2020

Estate Planning When You Own Cryptocurrency

CryptoIn 2010 Bitcoin had a value of less than one cent; in 2017, a value of $20,000; and at the end of July, 2020, a value of $11,000. 

Cryptocurrency has become a vital financial tool for individuals and businesses, since U.S. Congress has held hearings discussing the digitization of the dollar. Cryptocurrency planning has been neglected and cryptocurrency has been lost. "This has generated tales of people, who discarded their computer hard drives containing thousands of bitcoins now worth millions, sifting through mountains of garbage."

Cryptocurrency can be difficult to understand, so there are steps you should take to integrate cryptocurrency in your estate plan to ensure that your heirs and beneficiaries will avoid the associated risks. 

First, you should preserve the benefits of cryptocurrency. One of the best properties of Cryptocurrency is that it is highly secure. However, if you carelessly record the private key or seed phrase, that security is at risk. You should ensure that your planning procedures include how to secure this information. 

Next, avoid the risks of cryptocurrency. Since crypto can fluctuate even during the course of the day, so in a sense, it should be treated like stock. Also, crypto exists outside of government regulation, so no one is responsible for losses due to scams or theft. 

It is also important to note that without specific language, your trust will not be able to hold cryptocurrency. You must be extra careful if you are drafting your trust to include cryptocurrency, so that your heirs will be able to access it in the event of your death. 

You should ensure that if you or your business own any type of crypto that your estate, business succession and financial plans reflect that. 

See Matthew Erskine, Estate Planning When You Own Cryptocurrency, Forbes, July 30, 2020.

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

August 10, 2020 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Seven Reasons to Update Your Estate Plan Right Now

DynastyThe COVID-19 pandemic has pushed a lot of people to update or complete their estate plans. Due to the COVID-19 crisis, many people are beginning to realize that their estate plans have flaws and are taking steps to improve and correct them. 

Below are 7  common types of trust language in your trust documents that may need to be reconsidered given today's circumstances. 

  1. Mental Capacity Must Be Determined by Two Licensed Physicians
  • Even when things are normal, there aren't usually two physicians actively involved in a person's care. In the wake of the COVID-19 crisis, non-essential medical visits have been limited and physician's assistance is needed elsewhere. 
  1. “Springing” Powers of Attorney
  • The pandemic has given new meanings to the term "incapable" which can even refer to a person that is stuck in quarantine. Therefore, it may be smart to avoid springing powers of attorney. Springing powers of attorney "spring" into effect when your physician deems you incapable, and given the new ways you could be deemed incapable, a springing power of attorney could complicate your estate.
  1. Dead-End Succession Provisions
  • Since the pandemic has proven that is it possible for whole families to be hit with the virus at once, it is in your best interest to make sure there are other avenues and successors for your estate to pass on, in case your whole family is impacted.
  1. Too Much or too Little Detail in Your Health Care Directives
  • "In the pandemic, we have seen health care concerns morph, with intubation and ventilators playing roles not imagined before. For individuals with overly detailed health care directives, their guidance could end up restricting the treatment or, at minimum, confusing their agent’s decisions. "
  1. Overly Prescriptive Distribution Provisions
  • It may also be a good idea to take a look at the parameters you have set on the distribution of your trusts. In the case of the unexpected, it may be a good idea to grant your trustee broad discretion in making distributions. 
  1. Specific Bequest Amounts
  • Given the instability of the market and the uncertainty of the economy, it is a good idea to leave a special bequest to make sure that your loved ones are taken care of before anything else is done with the money left after your passing. 
  1. Providing for Your Communities
  • The pandemic has placed great stress on our communities, so it is important to consider playing a role in the revamp of your community.

See Anna Soliman, Seven Reasons to Update Your Estate Plan Right Now , Fiduciary Trust International, July 29, 2020. 

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

August 10, 2020 in Current Events, Death Event Planning, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Sunday, August 9, 2020

En Garde! A Trust’s Revocation Method May Not Be Enforced Unless It Explicitly States It’s the Exclusive Means of Revocation

Two-men-fencingCreators of trusts usually put a lot of time and effort into planning how their property should pass in the event of their death. Trustors or their lawyers typically use protective safeguards to shield themselves from their now indecision and undue influence should they become vulnerable. 

The California Legislature has codified its own "default" method of revocation, which allows "a trust to be revoked by a writing signed by the trustor and delivered to the trustee during the trustor’s lifetime." 

In Cundall v. Mitchell-Clyde (2020), the Second District Court of Appeals held that "for a trust’s revocation procedure to be the exclusive revocation method, it must expressly specify that it is the only such method."

John and Robert were neighbors in West Hollywood and met in 2007 and became friends. In February 2009, "John retained Frances -an attorney and fellow neighbor- to prepare a trust, naming himself as trustee, and Robert as the sole beneficiary and successor trustee." The trust contained a revocation procedure which allowed it to be revoked by delivering a written revocation to John and Robert. However, both John and Frances would then need to sign the document. 

John had a "falling out" with Robert, so he created a new trust in May 2009, which named his friends Vanessa and Ronald as beneficiaries. John also retained a new estate planning attorney, Paul, to prepare his trust. John executed the new trust including the revocation. The trust was not properly revoked under the trust's revocation procedure because Frances never signed the revocation.

Robert, Vanessa, and Ronald filed dueling petitions concerning the validity of the February trust and May trust. The Los Angeles Superior Court found that the February trust did not provide an exclusive means of revocation and that John's revocation was proper.

The Court of Appeal affirmed the trial court's decision. The court reasoned that the theoretical distinction between a “method” and “authority” was mere semantics, section 15401(a)(2) addresses the authority to revoke a trust anyway, and that its terms plainly provided that the default revocation method could be used unless the trust provided an “exclusive method of revocation.”

See Christopher Miles Kolkey, En Garde! A Trust’s Revocation Method May Not Be Enforced Unless It Explicitly States It’s the Exclusive Means of Revocation, Trust on Trial, July 29, 2020.

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

August 9, 2020 in Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Saturday, August 8, 2020

8 Tips for Having 'The Talk' with Elderly Parents

ElderAlthough estate planning can be emotional and often times uncomfortable, it is essential for every family. It is never safe to assume that everything will automatically be taken care of in the event of you or your parents' death.

In order to ensure that your family will be taken care of, you will need to have emotional, but necessary conversations. 

Below are eight tips to guide you in 'The Talk' with your elderly parents:

1. Plan what you can

  • It is important to discuss an estate plan and all of the details to ensure your parents estate will be taken care of in the event of their passing. 

2. Identify Key People 

  • Doctors
  • Attorney
  • Financial planner and/or accountant
  • Insurance brokers
  • Minister of religion
  • Closest friends

3. Address the Topic of a Will 

  • It is important determine whether your parents already have a will in place and if the document is up to date. If not, it is important that a will is created. 

4. Talk About Power of Attorney

  • Find out if someone has been appointed and if not, who the best choice is for this appointment. 

5. Discuss End-of-Life Wishes

  • This portion may be emotional, but it is important that their wishes are discussed as the estate plan will be incomplete without them. 

6. Ask About Insurance Policies

  • Health insurance – Medicare or private
  • Life insurance
  • Home insurance
  • Long-term care insurance
  • Disability insurance

7. Request Access to Tax Returns

  • Although these documents may not be necessary after death, it is important to know where they are located just in case. 

8. Discuss All Other Practicalities 

  • This includes:
    • Make a list of their accounts – financial accounts such as bank and mutual fund, credit accounts, and store accounts
    • Check if they are registered organ donors or whether they would consider donating their organs
    • Talk about the memorial service they want and whether they want to be buried, cremated, or some other option.

These conversations will likely be tough and emotional no matter what strategy or plan you use, but patience and transparency are keys to ensure an effective estate plan. With the right people and the right setting 'The Talk' can be done effectively. 

See Ellen Klein, 8 Tips for Having 'The Talk' with Elderly Parents, Elder Law Answers, July 28, 2020.

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

August 8, 2020 in Elder Law, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Friday, August 7, 2020

New York woman’s obituary shares hate for Tom Brady

TbCarole Scarsella, from Lackawanna, N.Y., died on July 19. Carole's obituary looks like any other at first glance, however, if you read on you'll see that Carole's obituary is unique.

In the obituary, family members say Carole "smoked millions of cigarettes, "loved the New York Yankees and future NBA Hall of Famer Lebron James" and "HATED Tom Brady."

The family made sure that the word "hated" was in all capital letters, apparently in attempts to emphasize the hatred that Carole held for Tom Brady. It appears they proved their point, since the obituary has made news outlets across the country. 

Carole's hatred for Tom Brady is shared with many other citizens of Buffalo, where it is almost tradition to hate former New England Patriot's quarterback. 

It seems like Carole lived a great and eventful life and she will greatly be missed by her family and loved ones.

See Evan Anstey, New York woman’s obituary shares hate for Tom Brady, WIVB4 News, July 29, 2020.  

August 7, 2020 in Estate Planning - Generally, Humor, Sports | Permalink | Comments (0)