Monday, September 16, 2019
The reigning queen of soul, Aretha Franklin, died in August of last year and the world believed that passed away without a will. But the discovery of three handwritten documents found in her home foreshadowed a rocky and emotional road for her family.
If Franklin had indeed died intestate, Michigan law dictated that because she did not have a spouse at the time of her death, her $80 million estate would have been divided equally among her four sons. But in each of the wills, provided specific provisions to be made for her oldest son, who reportedly has special needs, and that the balance of assets would then be distributed equally among her other three sons. But there remains a question of whether Franklin did create the wills herself, and the youngest son, Kecalf, convinced the judge to have a handwriting expert examine the wills to ensure his mother wrote the documents.
Aretha's niece, Sabrina Owens, was originally named the estate's personal representative, but Kecalf has also petitioned the court to replace her - with him, thus causing dissention among the family. Owens was Aretha's choice to handle her estate, and she is known to be a capable business person, but the largest asset to the estate is no surprise: the rights to the diva's music catalog and likeness. If properly managed, these can be a financial powerhouse to the heirs and preserve their mother's legacy for future generations.
See Cozen O'Connor, As Aretha Franklin’s Heirs Dispute Control of Estate, Judge Orders Court Supervision, Lexology, September 11, 2019.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
Tuesday, September 3, 2019
Gerry W. Beyer recently published an Article entitled, Recent Cases: Intestacy, Wills, Probate, and Trusts, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.
This article discusses judicial developments (mid-2018 to mid-2019) relating to the Texas law of intestacy, wills, estate administration, trusts, and other estate planning matters. The discussion of each case concludes with a moral, i.e., the important lesson to be learned from the case. By recognizing situations that have led to time consuming and costly appeals in the past, probate judges can reduce the likelihood of appeals and their success and estate planners can reduce the likelihood of the same situations arising with their clients.
September 3, 2019 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Intestate Succession, New Cases, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)
Saturday, August 31, 2019
According to the U.S. Census Bureau, the number of unmarried couples who 50 and over shot up 75% between 2007 and 2016. For many it is because they have already experienced one difficult divorce and are nervous to entangle themselves and their possessions again. But simply living together can end up being complex because estate planning laws were written to favor married couples.
If one partner has a medical emergency and has not executed a health care power of attorney, the other partner cannot make any decisions for them. They would be considered "legal strangers." If they were married, however, not having the document would not hinder the healthy partner from making appropriate choices. Unmarried couples also need to get signed HIPAA releases so medical information can be released to them. Death of one partner can also create more woes. Without the proper legal documents, the surviving partner won’t be entitled to make decisions regarding the donation of the deceased’s organs or arrange for the person’s burial or cremation.
When there is a financial imbalance and one partner has promised to take care of the other, with no trust or will in place can cause serious problems for an unmarried couple. If the wealthier one dies intestate, their assets will be distributed according to the intestacy laws of their state and an unmarried partner is not recognized as an heir. On the other hand, if they were married and died intestate in a community property state, the surviving spouse is automatically entitled to inherit as much as half the value of the deceased’s assets.
See Brad Wiewel, The Legal Dangers of Living Together, Next Avenue, August 28, 2019.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
August 31, 2019 in Current Affairs, Disability Planning - Health Care, Estate Administration, Estate Planning - Generally, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)
Tuesday, August 27, 2019
Despite numerous reforms over the years, intestate succession rules continue to privilege traditional, white, heterosexual families. It is evident that the one-size-fits-all scheme cannot truly reflect diversity of lifestyles and associations. This Article considers an innovative option that has become increasingly popular in recent years: using big data to create personalized rules, tailored to the personal characteristics of each decedent. This Article explores the promise and drawbacks of personalized intestacy, arguing that personalized default rules fall short in the realm of inheritance, because these rules are personal and inheritance law is inherently relational. It then offers preliminary guidelines for adapting big data techniques to the relational aspects of inheritance.
Sunday, August 25, 2019
Danaya C. Wright recently published an Article entitled, Disrupting the Wealth Gap Cycles: An Empirical Study of Testacy and Wealth, 2019 Wis. L. Rev. 295-323 (2019). Provided below is an introduction of the Article.
When many of us think about the wealthy, we assume that they have inherited wealth, trust funds, or at least a history of knowing the right people. There are always a few stories of the hard-working immigrants who pulled themselves up by their bootstraps, as well as the spendthrift scions of wealthy families who manage to squander vast riches in a remarkably short period of time. But we rarely hear about the vast numbers of modest and obscure families that grow wealth carefully from generation to generation, keeping their wealth and their family skeletons away from the spotlight. How those families grow and maintain their wealth is through judicious use of tax mechanisms to minimize income and estate taxes, judicious use of trusts to reduce squandering wealth by irresponsible children and grandchildren, and through estate plans that channel property to those who will protect it, use it wisely, and pass it on in ways that maintain the wealth.
In early-modern England, estate planning was usually done earlier than we do it today, when children were young enough to be influenced and when parents had a good sense of their children's personalities. It was done when the patriarch had sons about to marry and he could convince them to accept limitations on family property in exchange for access to income immediately to allow him to start a family. When the son's children came of marrying age, the hope was that he would have imbibed the spirit of protecting the family property and would willingly accept continued constraints, impose them on his children and, if everyone played along, the family dynasty would be protected through a strict settlement renegotiated at each generation. The use of trusts and conservative trustees was crucial to keep wayward family members in line by denying them access to income if they bucked the system.
For those in Jane Austen's day, estate planning came at mid-life, when new families were being formed. In our day, estate planning comes at the end of life, as each generation usually hangs on to property, especially earned wealth, perhaps to lord it over neglectful children, but more often because the best way to deal with the uncertainty of the future is to retain control as long as possible. But hanging on to property until the end puts the owner at risk that he will die without making appropriate plans and his estate will be dissipated through family squabbles, probate delays and expenses, and that dreaded of all wealth-destructors: the estate tax.
The common denominator for most people who want to grow and protect wealth has been capable estate planning, planning that provides adequate resources for the current generation, protects the principal for the future, and provides flexibility so that each generation gets what it needs without constraining the property too severely. The trust is the most common mechanism for preserving wealth, but it is not the only mechanism. Life estates, pre-nuptial contracts, powers of appointment, and joint tenancies have provided ways to protect assets while providing for basic needs of future generations. More recently, living and asset-protection trusts, beneficiary designations, and TOD real-estate deeds have made estate planning even easier for the wealthy and the not-so-wealthy alike.
This panoply of estate planning options, however, seems to have passed by many who could really benefit from it. The person of modest wealth who dies without any estate planning risks having her property be dissipated to pay for guardianships, probate, and shares for heirs, regardless of their need or ability to manage property. Those who die young, before they have amassed much wealth, and those who die without proper estate planning will often leave little for their dependents, heirs who themselves will suffer from lack of investment in human capital by their parents and grandparents, thus leaving them less likely to earn significant wealth and less likely to have sufficient wealth to pass on to the next generation. The cycle of wealth-building by those who already have wealth is enhanced by probate and tax laws, while the cycle of wealth-destruction is perpetuated by administration costs, onerous legal requirements, and everyday inequalities. While many structural factors may contribute to the dissipation of wealth by some and the accumulation of wealth by others, one factor that seems to correlate closely to the various wealth gaps is dying intestate and having one's property pass by the default statutory rules of intestate succession, and dying testate and having one's property pass according to the wealth-saving mechanisms and procedures of planned wills and will-substitutes.
In an empirical study of all decedents dying in 2013 in Alachua County, Florida whose estates were probated, either testate or intestate, the data show striking correlations between intestacy and lower wealth, and testacy and greater wealth. And the demographics of those who died intestate correspond to the demographics of those people at risk of falling into the cycle of wealth-dissipation. To explore the possible effects of intestacy and testacy on wealth and property succession, I analyzed 408 estates (293 testate and 115 intestate) across a variety of categories, including wealth, age, race, sex, and marital status. All of these lines of inquiry support the claims by many economists that wealth gaps between men and women, white and black, or married and unmarried couples are growing and should be of great concern to lawmakers. This study supports those claims and ends by calling for more focus on how to bring estate planning services to the populations most vulnerable to dying intestate.
Monday, August 19, 2019
Elizabeth Ruth Carter recently published an Article entitled, Fiduciary Litigation in Louisiana: Mandataries, Succession Representatives, and Trustees, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.
This article provides an overview of common types of fiduciary litigation in the estate planning setting in Louisiana. The article briefly considers the history of fiduciary litigation in the civil law setting. It then considers actions against mandatories, succession representatives, and trustees. The article points out some of the challenges that are unique to Louisiana.
Thursday, August 15, 2019
The death of Jeffrey Epstein eliminates the possibility of closure through a criminal trial for many of his alleged victims, though prosecutors are still looking at charging others. Civil forfeiture could be an option, but the process to attain the money from those assets is lengthy. The next angle for victims would be tort lawsuits for money damages against Epstein's estate. In fact, the first one has been filed in New York.
Professor Reid Kress Weisbord, the Judge Norma L. Shapiro Scholar at Rutgers Law School, says that there is an preliminary issue of how long victims have to file claims. If the estate is probated in New York there is a window of seven months. Another issue is how much money did Epstein truly possess? Court documents presented for the criminal trial state that he was worth $550 million, but others claim that this does take into account several different aspects of his extensive empire of assets. Even so, if the number of victim claims against the estate are excessive, it may not leave much for any heirs, including his younger brother, Mark Epstein.
Also, following a principle of British law, successful claimants cannot be awarded punitive damages against a person's estate, only compensatory damages. Meaning that if Jeffrey Epstein was still alive, not only would the victims have the satisfaction of justice through a trial, but they also could receive more money damages for the trauma they suffered.
See Naomi Cahn, Why the Question of What's Going to Happen to Jeffrey Epstein's Money is so Complicated, Forbes, August 15, 2019.
Wednesday, August 7, 2019
Gerry W. Beyer recently published an Article entitled, Estate Planning Highlights of the 2019 Texas Legislature, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.
This article reviews the highlights of the legislation enacted by the 2019 Texas Legislature relating to the Texas law of intestacy, wills, estate administration, trusts, and other estate planning matters.
August 7, 2019 in Articles, Current Affairs, Current Events, Elder Law, Estate Administration, Estate Planning - Generally, Guardianship, Intestate Succession, Trusts, Wills | Permalink | Comments (0)
Sunday, August 4, 2019
Gerry W. Beyer recently published a book entitled, Texas Estate Planning Statutes with Commentary: 2019-2021 Edition, (2019). Provided below is a summary of the book.
Texas Estate Planning Statutes with Commentary: 2019-2021 Edition is a compilation of Texas statutes that are significant to law school and paralegal courses related to estate planning, such as wills and estates, trusts, estate administration, probate, elder law, and guardianship. Changes made by the 2019 Texas Legislature are printed in red-lined format to make the revisions easy for the reader to locate. Many sections include carefully written commentary entitled Statutes in Context. These annotations provide background information, explanations, examples, and citations to key cases, which will assist the reader in identifying the significance of the statutes and how they operate.
August 4, 2019 in Books, Books - For Practitioners, Books - For the Classroom, Current Affairs, Estate Administration, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax, Intestate Succession, New Legislation, Trusts, Wills | Permalink | Comments (0)
Tuesday, July 23, 2019
The estate of the late diva Aretha Franklin continues to get convoluted and complex, now with the sons duking it out in court. Kecalf Franklin petitioned the court to remove the current personal representative, Aretha's niece Sabrina Owens, claiming that she is not keeping the singer's family up to date with the current status of the estate, and appoint him. Theodore "Teddy" White II, Aretha's son with her first husband, has asked the court to deny his brother's request and instead appoint him as co-personal representative along with Sabrina.
Kecalf claims that his cousin is keeping the heirs in the dark by failing to provide them any accounting or inventory of his mother’s property and assets. He also alleges that Owens has not communicating about the new business deals being negotiated, including the MGM biopic about Aretha's life, and any investigation into the possible forgery of some checks. He is requested that the judge appoint him as the successor and allow him to completely manage all aspects of Franklin’s business.
Owens has denies that she has kept any of the heirs out of the loop, and revealed that since police did not press charges over the alleged forged checks of her aunt, the estate is preparing a civil lawsuit.
Another son of the diva, Edward Franklin, also filed docs backing Kecalf in the move to remove the current personal representative of the estate and put himself in charge.
See Ryan Naumann, Aretha Franklin's Sons Fighting Each Other Over Control of Singer's Estate, Yahoo, July 19, 2019.
Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.