Wills, Trusts & Estates Prof Blog

D.C. Council raises gas and other taxes, rejects tax increase on wealthy, during first budget vote

On Tuesday, the D.C. Council raised the gas tax and eliminated some tax breaks for businesses, but rejected an income tax hike for the wealthy, during a contentious debate over how to winnow the budget as the coronavirus crisis continues to decimate the economy. 

The Council also reduced the estate tax threshold from $5.6 million to $4 million. The Council claims the revenue from this increase will be about $1.8 million.

The council addressed the tax issues before unanimously approving a spending plan for the fiscal year that starts OCt. 1, in the first of two budget votes scheduled this month.

Mayor Muriel E. Bowser (D) did not include tax increases in her budget proposal. However, she said she would plug an $800 million hole largely by freezing pay and hiring, and tapping reserves. In a letter to lawmakers, Bowser said it would be "foolhardy to raise taxes this year."

However, lawmakers raised an extra $63 million by increasing some business and other taxes and dedicated the funding to social services including housing vouchers, assistance to undocumented immigrants and mental health assistance in schools. 

Meeting virtually via zoom, the hearing turned chaotic as lawmakers had a hard time following the details of complex tax proposals. 

Council Chairman Phil Mendelson (D) sought to delay some of the tax increases for the time being. Mendelson noted that revenue projections are likely to shrink again when forecasters revise their estimates in late summer, which will force the council to revisit the budget. 

After passing the budget, the council approved legislation needed for the Bowser administration to move forward on a deal to build a new hospital to replace the public United Medical Center in Southeast Washington. 

The council also voted to grant Bowser the power to keep restricting businesses and social activities to limit the spread of coronavirus. 

Under law, the mayor can declare a state of emergency for 135 days — meaning the current emergency would end July 24. 

See Fenit Nirappil & Julie Zauzmer, D.C. Council raises gas and other taxes, rejects tax increase on wealthy, during first budget vote, Washington Post, July 7, 2020.

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

The Supreme Court of Washington: Surviving Spouse Gave Up Right to Intestate Succession in Separation Contract

The Supreme Court of Washington held in In Re Estate of Petelle, that the right of a surviving spouse to intestate succession can be waived in a separation contract, even if not expressly stated. The Court held that the language, "all marital and property rights" includes the right to inherit as an intestate beneficiary. 

Michael and Michelle had been married for six years before Michael filed a petition to dissolve the marriage. The parties executed a separation contract that dissolved assets and liabilities. In the separation contract the parties agreed to make a complete and final settlement of all their marital and property rights on the following terms and conditions, which stated:

“The contract shall be final and binding upon the execution of both parties, whether or not a legal separation or decree of dissolution is obtained[,]” and, by its terms, the contract remained valid and enforceable against the estate of either party if either party died after the execution of the contract. Though the contract contains a “Full Satisfaction of All Claims” section, the right to intestate succession is not mentioned."

Michelle claimed that her and the decedent were considering reconciliation, however, the decedent died intestate before divorce or reconciliation could occur. Following the decedent's death, Michelle opened decedent's probate without disclosing the separation contract or giving notice to decedent's heirs. Decedent's mother contested the grant of powers of Michelle; she also petitioned the trial court to terminate Michelle's right to intestate succession, but the trial court denied the petition. However, the Court of Appeals reversed, finding that the petitioner waived her right to intestate succession under the language in the separation contract.

The main takeaway is that, in Washington, statutory intestate rights can be waived by either express waiver or implied waiver. Further, under Washington law, intestate rights do not have to be specifically referenced in a separation contract. 

See The Supreme Court of Washington: Surviving Spouse Gave Up Right to Intestate Succession in Separation Contract, Probate Stars, May 18, 2020.

Prince’s Family Claims That They Have Not Received Any Payments From His Estate; They Are Now Asking a Judge To Intervene

Three of the six siblings of the late singer Prince are claiming that they have not received anything from the estate, though they are his legal heirs. Despite this, lawyers and advisers of the estate have been paid. Sharon, Norrine, and John Nelson, three of the singer's siblings, have filed a petition for compensation in Prince’s estate.

The estate is run by Comerica Bank and the two parties have not agreed on many terms in the past. The siblings have accused Comerica of mismanaging money and leaving them out of the loop concerning major decisions regarding the estate. Comerica has denied these allegations. The three siblings say they want to continue helping out the estate but cannot continue without being compensated. The three siblings claim they have had to heavily depend on “solely on their pension, social security, personal savings and loans from friends to cover the costs needed to support the Prince Estate despite the millions paid to advisors, attorneys and others approved by the Court.”

A judge has yet to rule on the case.

See Gibson Precious, Prince’s Family Claims That They Have Not Received Any Payments From His Estate; They Are Now Asking a Judge To Intervene, Baller Alert, March 28, 2020.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.

Article on Reconceptualising the Law of the Dead by Expanding the Interests of the Living

Kate Falconer recently published an Article entitled, Reconceptualising the Law of the Dead by Expanding the Interests of the Living, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article.

Despite its name, the Australian law of the dead — a term used here to refer to the common law governing the treatment and disposal of the body of a deceased person — has extraordinarily little to do with the recently deceased. Instead, it is traditionally (and narrowly) conceptualised from the perspective of the still-living, with post-death disputes — such as those relating to posthumous interferences with the corpse — being decided by reference to the person who holds the right to possession of the body of the deceased. In contrast, whilst her physical shell continues to play a role at law, from the moment of death onwards the deceased as a person is denied legal existence in the form of rights, interests, or duties. This paper challenges this traditional formulation of the law of the dead by bringing the interests of the deceased to the forefront. It does this by arguing that the law of the dead should be reconceptualised so that the holder of the right to possession of the body of a particular deceased person is considered to experience an expansion of their own personal set of interests; this expansion being equivalent to those interests held by the deceased in relation to her body during her life and continuing into a 'posthumous space' after her death.

Article on How Should Non-Probate Transfers Matter in Intestacy?

Mary Louise Fellows and E. Gary Spitko recently published an Article entitled, How Should Non-Probate Transfers Matter in Intestacy?, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article.

As American family structures have become more heterogeneous, status-based intestacy statutes have become less suited to promoting donative intent. Indeed, numerous scholars of wealth transfer law have noted the critical need for intestacy law reform to address the needs of decedents whose donative intent does not comport with traditional family norms. We propose addressing this concern by looking to intestate decedents’ non-probate transfers, such as a revocable trust, life insurance policy, 401(k) account, brokerage account, or joint tenancy with right of survivorship deed. In 2010, we, along with a co-author, published the first study to consider the relationship between donative intent with respect to the probate estate and donative intent as expressed in non-probate transfers. That study utilized a factorial research design to assess public attitudes and offered support for our new heir hypothesis, that, depending on the identity of the non-probate transfer beneficiary and the identity of the existing heir, a decedent would want a non-probate transfer beneficiary who is not otherwise an heir to be treated as an heir. The instant two-part study of estate planners produces additional knowledge about how best to integrate non-probate transfers into intestacy statutes. In the first part of our study, we conducted a paper survey of forty-five estate planners. The responses to this survey greatly influenced the second part of our study in which we conducted in-person or telephone interviews with nineteen estate planners. The findings reported in this study provide the framework for statutory reform. This study demonstrates that the new heir reform increases the likelihood of promoting intestates’ donative intent in a growing number of twenty-first century familial situations. 

Article on Heir Hunting

David Horton and Reid K Weisbord recently published an Article entitled, Heir Hunting, Wills, Trusts, & Estates Law eJournal (2020). Provided below is an abstract of the Article.

For more than 150 years, companies called “heir hunters” have operated in the shadows of the court system. Heir hunters monitor probate filings to identify intestate decedents who have missing or unknown relatives. They then perform genealogical research, locate the decedent’s kin, and offer to inform them about their inheritance rights in exchange for a share of the property. States are sharply divided about whether to enforce contracts between heir hunters and heirs. This discord stems from the fact that we know virtually nothing about heir hunting.

This Article illuminates this mysterious corner of succession law by reporting the results of the first empirical study of heir hunting. Its centerpiece is a hand-collected dataset of 1,349 recent probate matters from San Francisco County, California. Because a unique disclosure norm in California effectively requires heir hunters to file their contracts in the record, the Article is able to analyze a rainbow of issues that would normally be private, such as the scope of the industry, how heir hunters operate, and the context, content, and timing of their agreements.

The Article reaches three main conclusions. First, heir hunting is a booming business. Indeed, the Article unearths 219 agreements between heir hunters and heirs from twenty-seven American states and eleven foreign countries. Second, heir hunting can be socially valuable. Heir hunters sometimes locate long-lost relatives after everyone else has failed. Third, heir hunting is also problematic. For one, the Article’s multivariate regression analysis reveals that cases with heir hunters are especially likely to devolve into litigation. In addition, heir hunters usually pay for the heir’s attorney, thus creating a stark conflict of interest. Finally, heir hunters charge exorbitant fees and routinely contact heirs before the administrator has even tried to locate them. Using these insights, the Article critiques existing approaches to heir hunting and suggests reforms that would enable the legal system to harness the practice’s benefits while limiting its costs.

Article on Scottish Law on Intestacy and Probate: Borrowing from the United States and Canada to Bring Scottish Law out of Flux

Zia Akhtar recently published an Article entitled, Scottish Law on Intestacy and Probate: Borrowing from the United States and Canada to Bring Scottish Law out of Flux, Est. Plan. & Cmty. Prop. L.J., Vol. 12 Book 1 (Fall 2019). Provided below is the introduction to the Article.

    Most nations that developed a legal system under the English Common Law have adopted laws for wills and succession by intestacy that suit the needs of their nationals. They adapt laws when necessary, like when the dynamics of a typical family change, which has been prominent issue in the modern era. The legal framework governing wills has been established in the United Kingdom, but in Scotland there is an ongoing debate on developing laws of intestacy. Scottish legislators are reviewing potential legal schema to adopt.

    This article will consider the rules of intestacy and the grounds upon which legal reform is being proposed to amend the law in Scotland. The intention is to compare the benefits of adopting legal provisions from other jurisdictions in common law countries that can serve as a framework for possible legislation. This article will evaluate the jurisdictions that can serve as models for adoption, defining their laws, and evaluating the community property bases for the distribution of property.

    First, the laws in England and Wales will be compared to Scottish Law, showing the relative issues Scottish nationals may face. Instead of simply adopting English laws, this article will explore the possibility of adopting succession legal approaches from North America, namely the community property system in some if the United States and the threshold approach from British Columbia, Canada.

    Next, this article will address how Scotland could address conflicts of law when applying successions laws. It will show that there are current methods available to Scottish nationals through the already-existing Brussels IV law, as part of the European Union, even though the United Kingdom has opted out. It will then show how the United States and Canada have addressed their own conflict of law issues, and how Scotland could consider borrowing from those approaches.

Article on Intellectual Property and Domestic Relations: Issues to Consider When There is an Artist, Author, Inventor, or Celebrity in the House

Ann Bartlow recently published an Article entitled, Intellectual Property and Domestic Relations: Issues to Consider When There is an Artist, Author, Inventor, or Celebrity in the House, Wills, Trusts & Estates Law eJournal (2020). Provided below is an abstract of the Article.

This article articulates some of the special issues raised by intellectual property in the context of family-law-oriented concerns. It also necessarily explores the characteristics and properties of personal intellectual property in a broader sense. What follows is an overview of the special issues and concerns intellectual property might present in the context of divorce, estate planning, or probate. Please keep one important caveat in mind: Intellectual property has become a very dynamic area of the law. Governing federal patent, copyright, and trademark statutes are extensively amended with astounding frequency. Right of publicity and trade secret law are also constantly evolving. Legislative proposals that would significantly alter certain aspects of intellectual property law are constantly proposed and may be adopted by Congress (or by individual states) at any time. In addition, courts play a large role in delineating the scope of intellectual property protections, and the judiciary, through its role as adjudicator of intellectual property disputes, has (and will continue to have) a profound effect on the continually shifting landscape of rights, obligations, and privileges associated with intellectual property.

Article on Avoiding Prison Bars, But Gaining a Bar to Inheritance: A Statutory Solution for the Insane Slayer Through a Comparative Approach

Brittany Brewer recently published an Article entitled, Avoiding Prison Bars, But Gaining a Bar to Inheritance: A Statutory Solution for the Insane Slayer Through a Comparative Approach, Wills, Trusts, & Estates Law eJournal (2020).

If a solution cannot be found within states, it’s time to look outside our own borders. This Article does just that. With murder amongst family members slowly becoming a frequent phenomenon, comes the burden of determining inheritance. This burden grows exponentially, however, when the slayer is later found not guilty by reason of insanity as a result of a mental illness at the time of the killing. States have grappled with their treatment of the insane slayer in different ways, either by letting them inherit due to their lack of intent, or by refusing to let them inherit under public policy justifications. By arguing that the insane slayer should be able to inherit due to their lack of intent at the time of the killing and the uncontrollable genetic inheritance of their mental illness, this Article is the first to present a solution for the insane slayer through a comparative approach. Specifically, by adopting statutory language from the Forfeiture Act of 1995 No. 65 in New South Wales, Australia. This piece of legislation weighs the conduct of the offender, the conduct of the deceased, the effect of the rule on the defendant and other persons, and any other matters the court finds material. As a result, this Act exudes the discretion, subjectivity, and fairness that the traditional American slayer statute lacks. By consolidating language from the Forfeiture Act of 1995 and traditional American slayer statutes, the statutory solution proposed in this Article has the potential to protect the insane slayer in ways other laws have failed to do.

Article on The Stranger-to-the-Marriage Doctrine: Judicial Construction Issues Post-Obergefell

Lee-ford Tritt recently published an Article entitled, The Stranger-to-the-Marriage Doctrine: Judicial Construction Issues Post-Obergefell, Wills, Trusts, & Estates Law eJournal (2019). Provided below is the abstract to the Article.

The recent Supreme Court decision in Obergefell v. Hodges changed the legal understanding of marriage in the United States. By making same-sex marriage legal in all fifty states and requiring all states to recognize same-sex marriages from other states, the Court in Obergefell recognized evolving social attitudes toward same-sex marriage and expanded the legal definition of "marriage" to include spouses of the same sex. In so doing, the Court necessarily altered the implication of terms like "spouse," "husband," and "wife" - post-Obergefell, courts will need to construe these words in a way that acknowledges an evolving understanding of marriage. Courts have faced similar construction issues before. When the notion of the American family shifted in the mid-nineteenth century to include adopted children as "natural" children, courts struggled to ascertain donative intent behind language like "child," "children," and "descendants" that had traditionally excluded adoptees. The legalization and growing popularity of adoption made presumptive exclusion of adoptees for inheritance purposes socially obsolete, but neither society nor the law can move directly from presumptive exclusion to presumptive inclusion. In the adoption context, courts used several construction approaches to ascertain and effectuate donative intent in a period of definitional transition when words with once-plain meaning were inherently ambiguous. The construction approaches used by courts to navigate social and legal change in the context of adoption provide insight by analogy into the circumstances that courts face today, as they must construe language that no longer presumptively excludes same-sex spouses.