Wills, Trusts & Estates Prof Blog

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

Thursday, May 2, 2019

Best (and Worst) States for Entering the Afterlife

EstatetaxAs the saying goes, nothing in life is certain except for death and taxes. So what are the best and worst states for estate taxes? Though the federal exemption is $11.2 million for an individual, there are 18 states (plus the District of Columbia) in the union that also have state or inheritance taxes of their own. 6 of those 18 states have inheritance taxes, which differ from estate taxes as they apply to the heirs or beneficiaries of the decedent, and the long arm of the law reaches them even if they live outside of that state. Those states are Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania, according to Moneytips.com. Spouses, however, are exempt from inheritance taxes.

The jurisdictions that have an estate tax are Connecticut, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. Yes, Maryland has both estate and inheritance taxes. Rhode Island has the lowest threshold at $850,000, which means any estate worth more than that amount will be subject to the state's 16% estate tax. District of Columbia and Hawaii have the same exemption as the federal government, so any estates in those jurisdictions over $11.2 million will have to pay the 40% federal estate tax and the jurisdiction's estate tax (16% and 15.7%, respectively).

So what are the best states to die in? The other 33 states that have neither state estate taxes nor state inheritance taxes. To take advantage of the tax benefits, you will need to establish residency in that state and know the requirements to do it. Florida’s rules are quite extensive and include filing a declaration of domicile, getting a driver’s license and registering your vehicles, opening bank accounts, registering to vote, notifying tax officials, applying for the homestead exemption and updating your estate plan.

See Bryce Sanders, Best (and Worst) States for Entering the Afterlife, Accounting Web, May 1, 2019.

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

May 2, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Intestate Succession, New Legislation, Trusts, Wills | Permalink | Comments (0)

Wednesday, May 1, 2019

The Mystery of the Millionaire Hermit

CatholicWhen a person dies alone without an easily ascertainable will nor family, the public administrator of the county is dispatched to determine the individual's estate. He or she has the authority to enter the person's home (after the coroner has taken care of the body) to rummage through the person's belongings to see if they can find the next of kin, a will, or any other clue as to how to disperse what the person left on the Earth.

But when Dale Tisserand and Melani Rodrigue of Corning, California entered the two-bedroom home the recently deceased Eugene Brown on August 22, 2015, they were ready for the usual decay of a person on the edges of society. Those that pass away all alone have usually let their lives - and homes - get away from them before they themselves pass on. But to the administrators surprise, they found a neat, tidy, and sparse house and every sign that its inhabitant was strictly frugal. There were no electronics in the home except for an old-fashioned radio, and the man's room only contained a foam bedroll and a military duffel bag containing a uniform and medals.

The other bedroom was empty except for a metal filing cabinet. Within that cabinet resided the evidence that Brown had a sizeable estate of $2.7 million, but alas, they found no will, so it was the administrators' job to discover the man's intent. Tisserand and Rodrigue discovered that he had never married and had no children, and his two siblings had long passed away. He had been born in San Jose in 1922, and had kept precise details of every dollar he had made, starting when he was 18 for a Norwegian shipping company making $18 a month. He moved into his home in the 1970s, and was alone it that small house for 39 years. But he did call his investment advisor, Richard Mazur, every morning and every night for years. Upon learning of Brown death, Mazur cried so hard he had to hang up with the administrator.

But Mazur did give them one clue to the elusive, rich hermit: he was a devout Catholic. In the filing cabinet was a brochure entitled titled Making Your Will: A Good Steward’s Guide, published by Catholic Relief Services, an international aid group, and a Merrill Lynch form designating the nonprofit as the sole beneficiary of his investments. Brown filled out the form four days before his death—but had not signed it.

The only person that attended Brown's military burial - with a full-gun salute - was an assistant funeral director who also happened to live on the same street as Brown. Three nephews and a niece finally surfaced after two of them learned of their uncle's death from an heir finding firm, which will take a third of the estate awarded to their clients. One claimed that he had visited his uncle from time to time, though there is no proof of that, but the other three admit they had not seen their uncle in 50 years. Nonetheless, 2 siblings received $387,000 each and the other 2 received $193,000 each, instead of the Catholic Church which may have been Brown's intent.

See Claire Martin, The Mystery of the Millionaire Hermit, Bloomberg Businessweek, April 27, 2019.

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

May 1, 2019 in Current Events, Death Event Planning, Estate Administration, Estate Planning - Generally, Intestate Succession, Wills | Permalink | Comments (0)

Friday, April 26, 2019

Prince's Sister Sharon Nelson Accuses Comerica Bank of Mismanaging Estate: 'He Is Not Resting in Peace'

PrinceOn of the six heirs of the late Prince, Sharon Nelson, claims that three years after the death of her half-brother almost nothing has been settled with his estate. She also states that the estate has had no many legal fees with the fighting between the heirs and Comerica Bank & Trust, the administrator of the artist's estate after he passed away intestate, that it is nearly bankrupt.

Nelson, who says she lives off her Social Security and pension, adds that the legal costs connected to the estate battle have become so enormous that her only option is to prepare her own motions and filings and to represent herself in court. She said that the other heirs were to dependent on Prince while he was alive, but that she worked her entire life and knew how to provide for herself. Each heir received a contractual $100,000 after a tribute concert, but have yet to have any other distribution or payment from his estate. But Comerica Bank & Trust continues to be paid $125,000 per month for the administration fees and other costs that Nelson and the other siblings believe are reckless.

The more than 2,711 court filings -- motions, affidavits, memos, depositions, schedules -- in Prince’s probate case are evidence of the complexity of administering an intestate estate. The Internal Revenue Service has also stated that no heir can receive a distribution from the musician's estate until an estimated $31 million tax bill is paid. 

A hearing on several matters has been set for May 20.

See Claudia Rosenbaum, Prince's Sister Sharon Nelson Accuses Comerica Bank of Mismanaging Estate: 'He Is Not Resting in Peace', Billboard, April 24, 2019.

April 26, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Income Tax, Intestate Succession, New Cases | Permalink | Comments (0)

Sunday, April 14, 2019

Article on Rethinking Connecticut Probate

ProbateJeffrey A. Cooper recently published an Article entitled, Rethinking Connecticut Probate, 32 Quinnipiac Prob. L.J. 10-22 (2018). Provided below is an introduction of the Article.

In the American lexicon, probate has become a dirty word. In his influential book on the subject, Norman Dacey sought to foster a nationwide nonprobate revolution, and had a few choice words for the probate system and the "viciously corrupt, greedy" lawyers and judges who ride its "gravy train." Closer to home, Connecticut's probate system has been called a "scandal," with critics calling it among the nation's worst court systems, and offering blunt advice: "try not to die in Connecticut."

Probate's poor reputation lingers despite recent meaningful reform. In 2011, a major restructuring accelerated the pace of prior reform efforts and resulted in a more centralized, efficient, and professional court system. Now, the probate courts have their own rules of practice designed to streamline proceedings, minimize unnecessary paperwork, and deter litigious behavior and destructive litigation tactics. The system is overseen by an administrative office that takes great pains to educate judges and the public, update and standardize major probate forms, and maintain a website that is comprehensive and user-friendly. In contrast to our often overburdened superior court system, the probate courts can handle cases more expeditiously and cost-effectively, and deal with complex family matters in an environment that is more approachable, less adversarial, and easier to navigate for pro se parties.

Why then do many trusts and estates lawyers routinely counsel their clients to avoid Connecticut probate? Why has a revocable living trust become the cornerstone of most sophisticated Connecticut estate plans? Why is there a continued reference to Connecticut's probate courts as a scandal, among the worst such courts in the nation?

I contend that Connecticut's probate courts have become far more desirable than their detractors would acknowledge, and far more efficient and effective than their reputation would suggest. Part of the disconnect is attributable to the fact that old reputations die slowly. At the same time, both the legislature and the courts can do more to build upon recent progress and continue to bring Connecticut's probate system into the twenty-first century. In this essay, I explore the lingering challenges facing Connecticut's probate courts, and proffer solutions that a thoughtful legislature and the courts themselves should embrace.

April 14, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Intestate Succession, New Legislation, Wills | Permalink | Comments (0)

Friday, April 12, 2019

Top 5 Reasons that Seniors Should Avoid Sharing a Joint Bank Account with an Adult Child

BankaccountOlder citizens often believe that adding one of their adult children to their bank account will make paying recurring bills and managing finances easier, but the reality is that it often has dire consequences. Once the account becomes a jointly owned bank account, the funds belong to both account holders equally. This means bank employees do not need to get the permission of both owners to transfer or withdraw all the funds.

Here are 5 reasons adding an adult child to your bank account if not a good idea:

  • Unintentional Disinheritance
    • When one account holder dies, the money in a jointly owned account automatically belongs to the other account holder without passing through probate. If the parent had wanted to disburse those funds between all their children, this could have the opposite effect.
  • Risk of Intentional Loss
    • For even the best child, the temptations of a windfall of money is too great. Once they are added to their parent's account, they may feel that there is no true harm by taking some "early."
  • Risk of Unintentional Loss
    • Adding a child to a bank account may also expose the parent's hard earned money to that child's creditors.
  • Risk of Meddling "Outlaws"
    • If a parent does not like or trust their adult child's spouse, being on a join bank account with that child could have unfortunate results. If the child's spouse has Power of Attorney of that child, they would have access to those funds if they had to act in the child's place.
  • Unexpected Risk
    • If the child needs to apply for public benefits after being added to the bank account, the funds may need to be spent before the child can qualify. The child would not be able to remove his or her name from the bank account because most programs for public benefits would consider this transaction an uncompensated gift or transfer to the parent that would otherwise create a period of ineligibility for the child to receive any benefits.

See Kara Gansmann, Top 5 Reasons that Seniors Should Avoid Sharing a Joint Bank Account with an Adult Child, CSHlaw.com, April 20, 2019.

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

April 12, 2019 in Current Affairs, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, Intestate Succession, Non-Probate Assets, Wills | Permalink | Comments (0)

Tuesday, April 9, 2019

Kristoff St. John's Ex-Wife Mia Says She's the Sole Beneficiary of His Life Insurance Policy

KristoffThe family drama in the wake of Kristoff St. John's death is coming to a boil as different members vie for control of different sections of his estate. His father previously filed to become executor of St. John's estate, but then the eldest daughter of the deceased, Paris, objected and filed her own petition last month, stating that her father died without a will.

Now, his ex-wife Mia is jumping into the foray. “Kristoff did not have a will. What was found were pages in a journal. There were things that were scribbled out, crossed out, and we just want to make sure — my daughter just wants to make sure — that his wishes are carried out,” she says. Mia says her daughter his not fighting St. John's father, but rather trying to clarify her father's last requests. 

Mia and St. John were married from the years 1991 to 1995 and had two children together, Julian, died by suicide at age 24 in 2014, and Paris. Mia also claims that because of Julian's death, she is the sole remaining beneficiary of a life insurance policy for the actor. He was found dead in his home in the San Fernando Valley on February 3rd, and a month later his death was ruled an accident. 

See Elise Burger, Kristoff St. John's Ex-Wife Mia Says She's the Sole Beneficiary of His Life Insurance Policy, People, April 4, 2019.

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

April 9, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Intestate Succession, New Cases, Non-Probate Assets, Television, Wills | Permalink | Comments (0)

Tuesday, March 19, 2019

Article on Intestate Inheritance Rights for Unmarried Committed Partners: Lessons for U.S. Law Reform from the Scottish Experience

IowaE. Gary Spitko recently published an Article entitled, Intestate Inheritance Rights for Unmarried Committed Partners: Lessons for U.S. Law Reform from the Scottish Experience, 103 Iowa L. Rev. 2175 (2018). Provided below is an abstract of the Article.

No U.S. state affords intestate inheritance rights to the unmarried and unregistered committed partners of a decedent. This omission has become more and more problematic in recent years as cohabitation rates in the United States has risen and marriage rates have decline. Indeed, the phenomenon of increasing cohabitation rates and declining marriage rates is observed across the developed word. Unlike in the United States, however, a significant number of foreign jurisdictions have reformed their law to afford intestate inheritance rights to a decedent's surviving unmarried committed partner.

This Article looks to Scottish law to inform consideration of how U.S. states might best reform their intestacy statutes so as to provide intestate inheritance rights to a surviving unmarried committed partner. Examination of Scottish law should provide especially fruitful for U.S. law reformers. The relevant Scottish statutory provisions have been in effect since 2006 and have been extensively critiqued by Scottish courts, academics, and practitioners. Indeed, the Scottish Law Commission ("SLC"), whose recommendations led to adoption of the current scheme, has called for repeal of these intestacy provisions, and has offered a replacement scheme. Moreover, Scottish succession law and U.S. succession law share significant norms valuing certainty and preferring fixed entitlements and limited judicial discretion.

The Article evaluates the Scottish statute with respect to three major issues of principle that should be at the center of U.S, reform discussions: fulfillment of purpose, implications for certainty and administrative convenience, and implications for marriage. The Article similarly evaluates the SLC's proposal to replace the current statute. Finally, the Article reflects upon the Scottish statute and the SLC proposal in considering which element of Scottish law a U.S. state might profitably borrow or should reject in an effort to craft a more inclusive approach to the intestate inheritance rights of unmarried committed partners consistent with the principles of U.S. succession law. The jumping off point for this discussion is this author's previously published proposal for a model statute that implements an accrual/multi-factor approach to intestate inheritance rights for unmarried committed partners. After describing the significant features of this proposal, the Article considers how one might evolve the proposed accrual/multi-factor approach to incorporate the lessons learned from the Scottish experience.

March 19, 2019 in Articles, Current Affairs, Estate Planning - Generally, Intestate Succession, New Legislation | Permalink | Comments (0)

Saturday, March 16, 2019

Article on Family Protection in the Law of Succession: The Policy Puzzle

PuzzleRichard Storrow recently published an Article entitled, Family Protection in the Law of Succession: The Policy Puzzle, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

To promote the protection of families, succession law diminishes the power of testation in a variety of ways that shield surviving spouses and children from disinheritance. The article conducts a survey of the law in fifty states, five main territories, and the District of Columbia and uncovers a remarkable diversity of family-protection provisions. Less apparent than the substance of the provisions themselves are the policies behind them. In a comprehensive study, this article concludes that family-protection provisions seek to prevent decedents from using their testamentary freedom in ways that impoverish those who are dependent upon them or that work unfairness against family members who have contributed in important ways to the accumulation of their wealth. In addition to these concerns is a notable ambivalence about the extent to which family protection statutes should undercut the expectations of those who have been promised a share of a decedent’s estate.

March 16, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Intestate Succession, New Legislation, Trusts, Wills | Permalink | Comments (0)

Wednesday, March 13, 2019

What To Do When You Hate Your Son-In-Law: A Practical Lesson In Estate Planning

Son-in-lawWill contests are avoided as much as possible because no family wants their dirty laundry aired out in public to become tinder for the gossip mills. So what do you do if you thoroughly despise the spouse of one of your children and must disinherit your child to insure that the hated individual gets nothing?

There is no law saying you must like the chosen spouse of your offspring, but it is presumed that you like your child enough to usually include them in your estate. As a "natural object of your bounty," disinheriting a child should be taking extremely seriously. It is important to consider alternatives such as trusts so that the child can still inherit without the dreaded spouse being unjustly enriched during the marriage or in the case of a divorce. A testator may also simply skip the child and allow the next generation, the grandchildren, to inherit in the place of their parents. 

You may not like their choice of spouse, but it was not your decision to marry them. A last will is not the forum to try to teach your child a lesson or to show them your ultimate disapproval. As a parent, you are inclined to protect them. A will or trust that shows them that though you may not agree with them, but you still love them, will resonate for many years to come.

See Cori A. Robinson, What To Do When You Hate Your Son-In-Law: A Practical Lesson In Estate Planning, Above the Law, March 12, 2019.

Special thanks to Carissa Peterson (Hrbacek Law Firm, Sugar Land, Texas) for bringing this article to my attention.

March 13, 2019 in Estate Administration, Estate Planning - Generally, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Sunday, March 10, 2019

Article on Farewell Downton Abbey, Adieu Primogeniture and Entail: Britain’s Brief Encounter with Forced Heirship

DtownabbeyLloyd Bonfield recently published an Article entitled, Farewell Downton Abbey, Adieu Primogeniture and Entail: Britain’s Brief Encounter with Forced Heirship, 58 Am. J. Legal Hist. 479-504 (2018). Provided below is an abstract of the Article.

This article observes a little-noted proposal (the Landed Property of Intestates Bill) introduced into the British Parliament in 1836. It considers the debate upon it that ensued and the accompanying pamphlet literature. The Bill proposed to alter the inheritance custom of primogeniture that directed the pattern of descent of freehold land in the absence of directions by settlement or will, and the dialogue is used as a lens to view the nexus between inheritance customs and broader political, economic and social concerns. The intensity of the dispute over primogeniture suggests that more was at stake than simply the devolution of land. The controversy in the Commons over the proposed legislation encompassed a discussion on the variety of purposes that succession law should serve. Lurking in the background in the debate over the proposed Bill was a more abstract conundrum: should succession laws primarily be crafted to serve political ends, namely, the constitution, or was it more appropriate to calibrate them to foster desirable social, economic or familial goals? In short, the debate put into sharp focus the question of what interests drive inheritance law and how attempts can be made to modify it, if and when such concerns alter over time. The Bill failed, and it would be for another century for Parliament to abolish primogeniture.

March 10, 2019 in Articles, Estate Administration, Estate Planning - Generally, Intestate Succession | Permalink | Comments (0)