Wills, Trusts & Estates Prof Blog

The New Math on Inheriting Your Parents’ House

Inheriting a family property can present emotional and financial decisions for families, as renovations, property taxes, and utility costs are rising. According to financial advisers, adult children find it harder to hold on to real estate, making the decision to sell an attractive one.

Nearly 70% of those who expect to inherit a home from their parents plan to sell it, a Charles Schwab survey found, primarily due to taxes. However, this percentage does not apply to vacation homes and secondary properties. 

Other families have found that one sibling is interested in buying out the others. This requires a reasonable method for valuing the home. A home’s cost basis resets to market value at the date of death, and any increase in value after death is taxed as long-term capital gains. But if a home is sold quickly, there will likely be little gain or little to no tax.

For more information see Veronica Dagher “The New Math on Inheriting Your Parents’ House” The Wall Street Journal, May 31, 2023.

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

Article: Intercategorical Analysis of Law

Adamn J. Hirsh (University of San Diego) recently published an Article, Intercategorical Analysis of Law, San Diego Legal Studies Paper No. 23-018, 2023. Provided below is an abstract to the Article:

This Article advocates the routine use of intercategorical analysis in lawmaking: When formulating (or revisiting) rules within one legal category, courts, legislators, and codifiers alike should explore analogous doctrines that prevail in related categories. Such exploration may provide lawmakers with both inspiration and data relevant to formulating the doctrine under consideration. The Article offers three, disparate illustrations of how intercategorical analysis could improve our law, regarding (1) nonpossessory liens, (2) formalities for transfers of property, and (3) in rem proceedings for winding up different kinds of estates. The Article also addresses the potential relevance of intercategorical analysis when drawing the boundaries of legal categories. Finally, the Article assesses the risks inherent in intercategorical analysis and relates this mode of analysis to other “law-ands.”

Don’t Let Death Be Your Deadline: Get A Will Before It’s Too Late: Expand Holographic-Wills Law to Incentivize Will-Making

Angela M. Vallario (University of Baltimore School of Law) recently published a paper, Don’t Let Death Be Your Deadline: Get A Will Before It’s Too Late: Expand Holographic-Wills Law to Incentivize Will-Making, Elder Law Journal, Forthcoming. Provided below is an abstract to the paper:

Procrastination is the number one reason for Americans’ lack of will-making. Many fail to get this important task completed before death despite acknowledging its importance. No one thing will remedy the lack of will-making in America. This Article suggests one way to address the problem is to more aggressively educate people on why a will is necessary, especially when blended families and children are part of the intestate’s family. The education efforts should target young adults in their senior year of high school and be further employed at universities, coupled with broader efforts to reach adults. Law students, in line with ABA303(a)(3), are uniquely situated to provide education to their communities and local area. Additionally, attorney-supervised law students could engage in will-making while simultaneously creating experiential learning opportunities.

Secondly, Americans need a self-help option that is readily available when needed. This minimizes concerns of the holographic will by expanding holographic-will law to include a one-page fill-in the blank statutory form. Although a professionally prepared will is ideal, there need to be other options to encourage will-making. Americans are self-sufficient and making a holographic form available when people have medical issues or travel could incentivize some to prepare a holographic form as a stepping stone towards a more complex estate plan, and serve as a placeholder to avoid intestacy in the event of the inevitable.

Moving Is a Monumental Task for Many Older Americans. These Organizers Can Help.

Speciality Senior Move Managers offer services many may not be aware of but can be invaluable for aging clientele moving into assisted living. Services include sorting and organizing belongings, coordinating with a moving company, and utilizing floor plans to determine what can be moved to the new residence.

Going through a lifetime of memories and possession can be daunting for clients and their families, and Move Managers step in to better facilitate the process. Many potential clients have balked at the additional expenses associated with the services. However, families who used a Move Manager insist it was worth the money.

Move Managers do not just pack and unpack homes. Instead, they work closely with clients and their families for weeks or even months, are trained and certified, and adhere to a code of ethics to provide services for those needing it most.

For more information see Paula Span “Moving Is a Monumental Task for Many Older Americans. These Organizers Can Help.” The New York Times, May 20, 2023.

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

This Dutch startup company makes mushroom coffins that biodegrade in 45 days

The Dutch company, Loop Biotech, makes coffins and urns that are available for purchase in Europe and the United States, with names like the “Living Cocoon,” “Forest Bed Coffin,” and “Earth Rise Earn.” The company’s coffins allow human remains to become food sources for the earth. 

Founders Lonneke Westhoff and Bob Hendrikx grew the company from a college project at the Delft University of Technology in the Netherlands. They were inspired by the mushroom and how it can take dead fallen trees and create new life. The pair aims to “give humanity a positive footprint” by upcycling hemp and mycelium, which grow inside a mold, allowing the coffins to become biodegradable within 45 days.

Prices range from 695-995 euros, with prices still being worked out in the United States. 

For more information see Saleen Martin “This Dutch startup company makes mushroom coffins that biodegrade in 45 days” USA Today, May 25, 2023.

Article: Targeting the Challenges and Pitfalls of Military Estate Planning

Duane Close (Regent University School of Law) recently published a paper, Targeting the Challenges and Pitfalls of Military Estate Planning, April 2023. Provided below is an abstract to the paper:

An insightful illustration of the issues servicemembers face when career and estate planning. The first part shares the experiences of several servicemembers in narrative form as they made their way through their careers. Part Two discusses background law that would have been useful for their planning, the benefits that are available to all servicemembers, and how they may take advantage of some resources only available while on active duty. Part Three discusses strategies for a case-by-case analysis and planning factors for an individual seeking the aid of legal counsel. This section also includes a checklist for both the member and the legal professional to use to start the process and support the formation of additional questions to further develop a comprehensive estate plan.

Article: Private Purpose Trusts: Good for Scotland?

Alexandra Braun (University of Edinburgh School of Law) recently published a paper, Private Purpose Trusts: Good for Scotland?, 2023. Provided below is an abstract to the paper:

On 22 November 2022 the Scottish Government introduced the Trusts and Succession (Scotland) Bill (hereinafter ‘the Bill’) whose overall aim is to modernise the law of trusts in Scotland and to attract international trust business. Among other things the Bill proposes to introduce a regulatory framework for private purpose trusts in Scotland which is contained in Chapter 6. Private purpose trusts are trusts which are not created for the benefit of one or more beneficiaries, but for the furtherance of a private purpose that is non-charitable. In seeking to introduce private purpose trusts, Scotland looked for inspiration offshore, notably the STAR legislation of the Cayman Islands and Guernsey trust law. The Scottish proposal, however, has arguably gone a step further by proposing a scheme that is even more flexible and user-friendly than that offered by the offshore models.

This paper explores whether this radical break with the past is to be welcomed. It examines the extent to which the proposed regulatory scheme addresses practical as well as conceptual objections commonly raised against private purpose trusts, but also their workability and compatibility with Scots trust law.

The paper argues that the core objections against the admissibility of private purpose trusts have not been satisfactorily overcome by the Bill and that the conceptual and theoretical but also ethical concerns that such trusts raise have not been given sufficient attention. In particular, Chapter 6 of the Bill raises serious concerns about the enforceability of private purpose trusts in Scotland which could potentially be used to make beneficial ownership disappear. This is especially problematic given that in Scotland, trusts can be constituted for whatever duration the truster elects and according to the Bill, private purpose trusts will be very difficult to terminate. Further, Chapter 6 leaves a number of questions unanswered and some of its provisions raise terminological and conceptual questions that are bound to create confusion and uncertainty. Finally, the scope of the proposed legal framework for private purpose trusts is unclear and its provisions could potentially affect a wide range of private trusts, and, in particular, the rights of beneficiaries under such trusts.

Thus, even though the Trusts and Succession (Scotland) Bill is an important piece of legislation for Scotland and has many positive features, Chapter 6 is best dropped, especially given that it is far from certain whether it will lead to new business for Scotland. While it may well be the case that certain types of trusts currently operating in Scotland could be classified as private purpose trusts, the proposed framework runs the risk of opening up Scotland to, and offering a statutory validation of, all manner of private purpose trusts with far-reaching consequences.

Article: Making Some Sense of the Constitutional Family

Katharine K. Baker (Chicago-Kent College of Law) recently published an article, Making Some Sense of the Constitutional Family, Wash U J L & Pub Pol’y, (Forthcoming). Provided below is an abstract to the article:

This essay explores the Supreme Court’s approaches to family definition. It unpacks how the Court has defined family differently in different contexts, and it argues that what can appear to be a confused doctrine actually makes some sense once one realizes that how the Court defines family is related to why the State is recognizing family at all. When the law recognizes family for any purpose, it must define it, either with reference to some extra-legal determinant like genetics, a pure legal construction like marriage, or a case-by-case assessment of lived experience like function. The Court has relied on all three of these mechanisms to define family, but it has almost never explained why it uses different definitions at different times. This essay examines the Court’s jurisprudence and begins to address the question of why it has used different definitions of family in different contexts. While much of the Court’s reasoning in these cases either never made sense or no longer makes sense given the evolution of technology and social norms, many of the Supreme Court’s seemingly confused results can be justified if one takes time to appreciate the different contexts in which the State has defined family.

Tina Turner, husband Erwin Bach bought $76M home in Switzerland less than 2 years before her death

The late Tina Turner, and her husband, Erwin Bach, purchased a sprawling waterfront estate in Zürich, Switzerland, less than two years before the singer's passing. Both Turner and Bach obtained Swiss citizenship, as nonresidents cannot own land in Switzerland.

Turner formally renounced her U.S. citizenship in 2013. She told the late Larry King in 1997 that moving to Europe made sense because he boyfriend was from there and Europe had been very supportive of her music. 

Known as the Queen of Rock' n' Roll, Turner had an illustrious career. It was announced that she passed away on May 24th after a long battle with an unnamed illness.

For more information see Nicki Cox “Tina Turner, husband Erwin Bach bought $76M home in Switzerland less than 2 years before her death” Page Six, May 24, 2023.

Paperwork Screw-Ups by Employers Deny Families Life-Insurance Payouts

Last month, the U.S. Labor Department reached a settlement with Prudential Financial over the wrongful denial of nearly 200 claims for benefits totaling as much as $7 million. As part of the settlement, Prudential agreed to voluntarily pay claims denied since June 2019 and tighten procedures with employers to avoid future employer errors.

Many employers offer supplemental life insurance policies, in which employees pay extra for the coverage. In some of these programs, the employer rather than the insurer is in charge of administrative tasks, which has been the norm for decades. However, in some instances, employers who still need to get their employees to complete the forms deduct the premiums from their paychecks and send the funds to the insurance company. The result left some grieving families without life insurance their loved ones had paid for.

As part of the settlement with the Labor Department, new policies will require employers to confirm that supplemental coverage forms have been completed before deducting premiums from paychecks. Without doing so, the employer will be liable to beneficiaries rather than the insurer.

For more information see Lesley Scism “Paperwork Screw-Ups by Employers Deny Families Life-Insurance Payouts” The Wall Street Journal, May 17, 2023.

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