Wills, Trusts & Estates Prof Blog

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

Thursday, July 9, 2020

Netflix sued over 'Enola Holmes' movie for copyright infringement by Sir Arthur Conan Doyle estate

UnknownThe family estate of Sir Arthur Conan Doyle, the creator and author of all the Sherlock Holmes stories, is suing Netflix over copyright and trademark infringement for its upcoming movie "Enola Holmes."

The author, writer, and director of the Millie Bobby Brown-led film are also being sued as well as Nancy Springer, the author of "The Enola Holmes Mysteries" book series, on which the move is based. 

In the film, Brown plays Sherlock and Mycroft's younger sister, Enola, who is also a skill detective. The movie is set to premiere in September. 

According to Deadline, the family of the iconic author claims that the "copyright infringement arises from defendants unauthorized copying of original creative expression by [Conan Doyle] in copyrighted  Sherlock Holmes stories."

The suit is claiming that after Conan Doyle's eldest son was killed in WWI, he returned to writing Sherlock Holmes stories but realized "it was no longer enough that the Holmes character was the most brilliant rational and analytical mind. Holmes needed to be human. The character needed to develop human connection and empathy."

After creating the character in 1887, Conan Foyle wrote 56 short stories and four novels about the adventures of Sherlock Holmes and his sidekick Dr. John Watson. 

See Jessica Napoli, Netflix sued over 'Enola Holmes' movie for copyright infringement by Sir Arthur Conan Doyle estate, Fox News, June 25, 2020.

July 9, 2020 in Current Events, Estate Planning - Generally, Film, Television | Permalink | Comments (0)

Three Estate Planning Techniques That Protect Your Assets From Creditors.

Asset-protection-plans-300x256There is a lot more to estate planning than saving taxes. It is also about managing and protecting your assets against future creditors, both for you and your beneficiaries. Economic turmoil is often followed by a spike in litigation by individuals seeking to recover some of their losses and by governments seeking to gain back the profits made.

If you receive funds from a person or business that files for bankruptcy, some or all of what you have been said can be drawn back into the bankruptcy court.  

The key to understanding when your assets might be vulnerable to attachment during a lawsuit is the Fraudulent Conveyance Laws. These laws render a transfer void if there is fraud during the transfer. Fraudulent transfers are bait for creditors. 

Receiving reasonably equivalent consideration for any transfer of assets avoids having your transfer treated as constructive fraud. In estate planning, reasonably equivalent consideration includes:

(1) Funding a protective trust at death to provide for a spouse or children

(2) The transfer of assets in return for an interest in an LLC or LLP, or

(3) A transfer that exchanges for an annuity (or other interest) that protects the principal from claims of creditors.

In order to maximize your asset protection, you should draft and fund protective trusts for your spouse, children and other beneficiaries. 

See Matthew Erskine, Three Estate Planning Techniques That Protect Your Assets From Creditors., Forbes, June 25, 2020.

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

July 9, 2020 in Estate Planning - Generally, Trusts | Permalink | Comments (0)

Wednesday, July 8, 2020

As Marlborough gallery winds down, the Fine Art Society reopens

Http---com.ft.imagepublish.upp-prod-us.s3.amazonaws.com-903475cc-b624-11ea-8ecb-0994e384dffeA spokesperson for the Lloyd Family Trusts, owners of the legendary Marlborough gallery, confirms that management is evaluating "the best approach to eventually winding down the gallery's operations". Marlborough, which once boasted the likes of Francis Bacon and Barbara Hepworth was founded in London in 1946 and opened in New York in 1963. 

Family relationships of those that run Marlborough have reached a boiling point which appears to have played a role in the gallery's wind down.

Last week, Max Levai— son of Pierre Levai, who ran Marlborough in New York while Gilbert Lloyd ran business in London, released a strongly worded statement that said he had been "effectively terminated by the Board of Trustees of the Lloyd Family Trusts" and therefore had "regrettably broken with the international Board of Marlborough Gallery."

Levai said while his 83-year-old father was "battling for his life" after testing positive for COVID-19, the board "used his condition for their own advantage" and voted to close the New York gallery permanently. 

The Trusts' spokesperson says that the decision to eventually close the New York gallery was made solely in light of business realities. 

The Fine Art Society, which shut its doors after 142 years on London's New Bond Street in 2018, sold its stock. Now, under new chairman Benny Higgins, chief executive of Tesco Bank until 2018, the London space will reopen in Soho's Carnaby Street in October. 

The opening exhibition will be of "the best of the artists that we show", Morgan-Cox says, including the English Painter John Minton (1917–1957). 

See Melanie Gerlis, As Marlborough gallery winds down, the Fine Art Society reopens, Financial Times, June 24, 2020.

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

July 8, 2020 in Current Events, Estate Planning - Generally, Travel | Permalink | Comments (0)

Montana Supreme Court: Alleged Fraud Did Not Toll Probate Time Limitations To Challenge Will

Probate-image2-1In the June 2020 case of Estate of Swanbergthe Montana Supreme Court upheld the denial of a petition to reopen a probate estate based on alleged fraud. The Montana Supreme Court held that the allegations of fraud did not operate to toll the applicable probate time limitations and did not permit a belated will contest. 

Tristan and Taylor Swanberg are there children of Chandler Swanberg, decedent. Decedent executed a will and trust in 2006, and died in 2012. Decedent was survived by three children: Taylor and Tristan (the Swanbergs) and Jennifer Wilson. Wilson filed a petition to formally probate decedent's 2006 will, determine testacy and heirs, and to appoint a personal representative. 

The 2006 Will and trust left almost all of decedents real and personal property to Wilson, including his holdings in Swanberg Farms in north-central Montana. Wilson provided the requisite notice of the probate proceedings to the Swanbergs. The Swanbergs did not appear at any hearings or file any objections. This will was admitted to probate and Wilson was appointed as personal representative. The order setting and distributing the estate was entered in November 2016. 

Two years later, in. November 2018, the Swanbergs petitioned to reopen Decedent's estate, alleging that Decedent lacked the requisite mental capacity to execute the 2006 will and trust, and that the documents were the product of undue influence exerted by Wilson. The Swanbergs maintained that a prior will left decedent's estate to the three children in equal shares. 

The Swanberg's sought a declaratory judgment providing that the trust was invalid or void. 

 The are remedies for fraud perpetrated in connection with probate proceedings provided under section 72-11, MCA. However, the section does not apply to remedies relating to fraud practiced on a decedent during the decedent's lifetime that affects succession of the estate. 

In this case, Montana law did not provide any recourse for the Swanberg's to bring what was, in effect, a belated will contest.

See Montana Supreme Court: Alleged Fraud Did Not Toll Probate Time Limitations To Challenge Will, Probate Stars, June 23, 2020. 

July 8, 2020 in Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0)

Tuesday, July 7, 2020

Estimated Taxes Due July 15: Tax Return Pros Warn About Special Issues For 2020

TaxTax day 2020 is July 15, and for some taxpayers it could be a financial nightmare. COVID-19 prompted the IRS to delay the usual April 15 federal tax return deadline to July 15, but it isn't just 2019 tax returns that are due.  The IRS also postponed the first two 2020 quarterly estimated-tax payments which are usually owed by April 15 and June 15. 

On July 15 it's possible for someone to owe half of their estimated taxes for 2020 plus any taxes owed with their 2019 tax return. This is is bad news for people whose income has tanked in the past few months due to the pandemic. There are two ways to avoid a penalty: (1) you owe less than $1,000 in tax for the year and (2) you pay at least 90% of tax owed for the current year (2020), or 100% of the tax you paid for the prior year (2019), whichever is smaller. 

If you don't pay enough taxes, IRS Form 2210 helps you calculate any penalty for underpayment of estimated tax. It is not clear whether or not the IRS will reduce or waive the penalty in 2020 or lower the safe-harbor percentages, but it is a possibility that these things will be considered. 

In addition, there are four special issues in 2020 related to estimated-tax payments and the calculation of how much you owe:

  • your stimulus check
  • paycheck protection program loans
  • unemployment benefits
  • ongoing financial hardship from the coronavirus pandemic

See Bruce Brumberg, Estimated Taxes Due July 15: Tax Return Pros Warn About Special Issues For 2020, Forbes, June 19, 2020. 

Special thanks to Mark J. Bade (CPA, GCMA, St. Louis, Missouri) for bringing this article to my attention. 

July 7, 2020 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Where’s the Will? Indiana Court of Appeals Reverses Trial Court’s Presumption of Revocation for Lost Will

Legal-wills-revokedRecently, the Indiana Court of Appeals decided the case of Trowbridge v. Estate of Trowbridge. The case involved a man, Everett (E), who remained on good terms with his ex-wife, Christal, despite their divorce. After the divorce, E executed a will in which Christal and Michael Trowbridge (Trowbridge), who was E's brother, were named as co-executors. 

The will left to Christal: (a) the former marital home, which E received according to the dissolution order; (b) the entirety of one retirement account; (c) 25% of another retirement account, and (d) all E's personal property. The will left Trowbridge the other 75% of the second retirement account. 

E died six years after executing the new will. A week after E's death, Trowbridge petitioned to open an intestate estate, asserting that E had no will. Christal then called the estate's attorney, Michael, and told him that she had E's will. According to Christal, she told Michael during a meeting that E gave her his original will in 2012 after he executed it. 

Michael contends that Christal told him that E gave her a copy of his will and left the original in his home's safe. Michael contends that he told Christal he needed to research whether a copy of a will could be used for probate. According to Michael, his research uncovered the rule that where a testator retains possession or control of a will, and the will isn’t found at the testator’s death, a presumption arises that the will was destroyed.

In its analysis, the Court of Appeals first easily affirmed the trial court’s finding that Trowbridge maintained possession of the will. Accordingly, Trowbridge properly received the benefit of the presumption that Everett revoked his will. But this presumption, the Court of Appeals explained, is not the end of the inquiry.

Again, it’s ultimately up to the person contesting the copy of the will to show that it was revoked, and the trial court ignored the evidence supporting Christal’s argument that it was not revoked. In particular, the Court of Appeals noted, among other things, that:

  • Everett didn’t execute his will until after he and Christal were divorced.
  • Everett continued to list Christal as the beneficiary of his accounts as recently as the year before he died.
  • Everett never enforced the dissolution order requiring Christal to deed the former marital property to him.

Accordingly, the Court of Appeals reversed and remanded to the trial court with instructions to consider the evidence rebutting the presumption to determine whether Trowbridge, not Christal, has satisfied his burden of showing that Everett revoked his will.

See Sarah Jenkins & Jason M. Rauch, Where’s the Will? Indiana Court of Appeals Reverses Trial Court’s Presumption of Revocation for Lost Will, Faegre Drinker, June 22, 2020.

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

July 7, 2020 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Monday, July 6, 2020

New York Banking Legend's Heirs Are Unloading Art To Save Estate

Portrait_of_James_StillmanBeyond the formal gardens, past sculpted terraces and ornate fountains, rises Wethersfield—the country estate of what was once one of America’s wealthiest families. There, among rolling hills 95 miles north of New York, a grandson of James Jewett Stillman, head of the bank that would grow into Citigroup Inc., envisioned his private Eden. 

However, Stillman’s heirs are fighting to preserve their beloved Wethersfield. The estate, once thought to be safeguarded, is running dangerously low. Over the years, trustees of the Homeland Foundation entrusted to preserve Wethersfield trifled away millions, according to a state investigation.

Due to this financial tragedy, artworks collected by the late Chauncey Devereux Stillman, grandson of the family patriarch, are being placed on the auction block. The hope is that the proceeds will be enough to bring to life the founder’s vision and preserve Wethersfield—its house, gardens and trails—for the public good.

But the long arc of the Stillman fortune—worth an estimated $1.6 billion, in today’s dollars, when James Stillman died in 1918—is a cautionary tale for the growing number of families creating private investment vehicles and foundations to guard their wealth and legacy. One clear lesson: Pick trustees and money managers carefully.

See Katya Kazakina, New York Banking Legend's Heirs Are Unloading Art To Save Estate, Bloomberg, April 4, 2017.

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

July 6, 2020 in Estate Planning - Generally | Permalink | Comments (0)

INSIGHT: Estate and Life Insurance Considerations During the Covid-19 Pandemic

Man_signing_documentThe COVID-19 pandemic has brought estate planning to the forefront of people's minds. Many of us have no frame of reference nor protocol to address the many medical, financial, insurance, and legal issues that need to be addressed.

Are we prepared as a nation? Are we going to get sick? Are we going to recover? Are we covered for medical costs? Will we lose our cognitive faculties? Will we lose our jobs, our income, and/or our businesses? Who will take care of us or make legal and financial decisions if we do get sick? What if our client or their family member is in an assisted living facility or nursing home and is incapacitated? Who is authorized to return that person back to private care in their own home or with other family for private, safer care with less risk of the fast spreading virus than in today’s traditional institutional facilities?

Henry Montag of The TOLI Center East and Andrea Schanker of Schanker & Hochberg walk through key considerations for life insurance and estate planning during the this unusual time. All of these “what if” questions are at the forefront of our clients’ and their families’ minds. 

While no plan can remove the emotional hurt of seeing a loved one dealing with a medical or cognitive issue, we can at least assist a client and their family to handle the financial, legal, and planning aspects first, so as to avoid a crisis in the event a client or a family member is directly impacted by this pandemic.

Here are several considerations to keep in mind during the pandemic:

1. Core Estate Plan

2. Core Documents

3. Retirement Planning and the SECURE Act

4. Life Insurance and the SECURE Act

5. Differing Life Insurance Strategies

6. Life Settlements During the Pandemic

7. The Historic Opportunity to Pass Wealth with Maximum use of the Gift Tax Exemption-GIFTING

8. Intra-family Loans

9. Guidance to Adhere to

See, Henry Montag & Andrea B. Schanker, INSIGHT: Estate and Life Insurance Considerations During the Covid-19 Pandemic, Bloomberg Tax, June 18, 2020.

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

July 6, 2020 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Sunday, July 5, 2020

How Covid-19 Has Gotten More Animal Owners To Consider Creating Pet Trusts

PetThe rapid spread of the Coronavirus has sparked an interest in people all over the world to make sure their affairs are in order in case of sudden death or incapacitation. Many pet owners consider their pets as part of the family, so it only makes sense that they want to make sure their pets will be taken care of when they can no longer provide care. Creation of a pet trust will allow pet owners to ensure their precious loved ones are cared for even if they cannot be the ones to care for them.

A pet trust is a legal arrangement providing for the care and maintenance of a pet (or pets) in the event of the owner’s death or incapacitation. This allows pet owners to name a pet guardian and allocate funds in the estate to provide continued care for their pet. 

An owner can create a testamentary pet trust in his will by designating portions of his estate to be used for the benefit of his pet.

The testator should elect a pet guardian to care for the pet. This person can be the same as the trustee, or someone else who is familiar with the pet’s routine.

Selecting two different people to act as the trustee and as the pet guardian will help prevent misappropriation of the trust property and ensure the terms of the pet trust are being adhered to. It will be hard to ensure the pet is adequately being taken care of if only one person is both the trustee and pet guardian. 

See Nancy E. Halpern, How Covid-19 Has Gotten More Animal Owners To Consider Creating Pet Trusts, Fox Rothschild LLP, June 25, 2020.

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

July 5, 2020 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Saturday, July 4, 2020

Inside the intentionally defective grantor trust

UnknownThe art of estate planning is affected by a multitude of variables that change over time. The currently low-interest-rate environment and the imminent return of a lower estate tax exemption are among the factors shaping estate planning today. 

According to Jere Doyle, senior VP at BNY Mellon Wealth Management, a sale to an intentionally defective grantor trust is one vehicle which works well to transfer wealth in the current low-interest-rate economy. The effect of an IDGT is to freeze assets for estate tax purposes but not for income purposes. 

A typical power retained in an IDGT is the swap power, Doyle observed. "Thats the ability of the grantor to go into the trust and pull out assets, and substitute assets he owns on the outside that are of the same value. That causes income of the trust to be taxed back to the grantor. That’s one of the things that people are using now because the interest rate is so low. You’re lending money to the trust at a low interest rate. The grantor has no interest income to report, there’s no tax on the sale, and when interest income comes back there’s no income tax on that.”

This is particularly favorable for people who own a business to get appreciation out of their estate, Doyle noted. 

However, the regular GRAT, or grantor retained annuity trust, might be a better choice for someone with publicly traded stock that they anticipate will appreciate. Further, the spousal lifetime access trust (SLAT) allow the making of sizable gifts to use up part of the gift tax exemption. 

There are a few vehicles you can use to take advantage of the lower estate tax exemptions, but you should consider your options and be cautious before making a decision. 

See Roger Russel, Inside the intentionally defective grantor trust, Accounting Today, June 30, 2020. 

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

July 4, 2020 in Estate Planning - Generally, Estate Tax, Gift Tax, Trusts | Permalink | Comments (0)