Wills, Trusts & Estates Prof Blog

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

Wednesday, May 22, 2019

Terry Semel’s Alzheimer’s Battle: Inside the Family War Over the Hollywood Titan’s Care

SemelFormer Warner Brothers and Yahoo executive, Terry Semel, had been on the top of his game for over two decades as he revolutionized the movie business. But last year, at the age of 75, it became public knowledge how the movie titan's family were fighting amongst themselves as Terry could no longer handle his own finances or personal business due to Alzheimer's. His son, Eric Semel, filed a petition for the court to appoint a temporary conservator for his father. Eric claims that his stepmother, Jane, "was in serious breach of her fiduciary duties" after placing Terry in a nursing home two years prior.

Terry, his son claimed, had been reduced to living in a 500-square-foot bedroom at the Motion Picture & Television Fund retirement community in Woodland Hills, against his expressed wish to remain at his home, a 13,000-square-foot Bel-Air mansion. There were also accusations of Jane refusing to allow Terry to leave the facility, not taking him for regular physician visits, and ordering healthcare staff to change or eliminate certain medications. Jane disputes the claims, saying that Terry “is not the man he once was. He is sometimes confused and sometimes upset, but those are functions of his disease, not anything that anyone has done to him.”

How did a multi-millionaire Hollywood mogul with multiple sumptuous homes in all the posh neighborhoods end up in a two-room unit in a retirement home? Terry was diagnosed with Alzheimer's in 2011, but according to Jane, he had wanted to keep it a secret from his friends and colleagues. Jane largely oversaw decisions about his treatment and care as he declined and after a fall, Jane moved Terry to the retirement home. Eric believes the Bel-Air home should have instead been made appropriate for his father to continue to reside in.

See Stacy Perman, Terry Semel’s Alzheimer’s Battle: Inside the Family War Over the Hollywood Titan’s Care, Los Angeles Times, May 3, 2019.

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

May 22, 2019 in Current Affairs, Current Events, Disability Planning - Health Care, Estate Administration, Estate Planning - Generally, Film, New Cases, Television | Permalink | Comments (0)

Tuesday, May 21, 2019

Judge says Parents can use Frozen Sperm of Their Deceased West Point Cadet Son

Sbank21-year-old Peter Zhu died in February after suffering injuries from a skiing accident while attending West Point Academy. His parents received court permission to have his sperm retrieved and frozen at the same time he underwent organ donation surgery. It was stored at sperm bank. Last week, a judge finally ruled that Zhu's parents are allowed to use the sperm for reproduction.

Justice Colangelo said he found no restrictions in state or federal law. Few courts have ruled on the issue of posthumous reproduction, and usually it has been based upon the decedent's intent. “At this time, the court will place no restrictions on the use to which Peter’s parents may ultimately put their son’s sperm, including its potential use for procreative purposes,” Colangelo wrote. Last year, the American Society for Reproductive Medicine issued ethical guidelines for fertility centers on posthumous collection of reproductive tissue. The organization said it is justifiable if authorized in writing by the deceased and should only consider requests from the surviving spouse or partner.

Typically, court cases involving posthumous reproduction are filed by surviving spouses, not parents. there have been a few other cases that did not involve the decedent's spouse, however. In 2007, a court in Iowa authorized recovery of a man’s sperm by his parents to donate to his fiancé for future procreative use. In 2009, a Texas woman got a judge’s permission to have her 21-year-old son’s sperm extracted after his death, with the intention of hiring a surrogate mother to bear her a grandchild.

See Associated Press, Judge says Parents can use Frozen Sperm of Their Deceased West Point Cadet Son, Fox News, May 20, 2019.

May 21, 2019 in Current Events, Estate Planning - Generally, New Cases, Science | Permalink | Comments (0)

Thursday, May 16, 2019

Has Granny Signed a Pre-Nup?

PrenupThe number of people getting married aged 65 and over rose by 46% between 2004 and 2004 according to the latest Office for National Statistics marriage data. During that same time period, older divorces were also on the rise. 92% of those that were getting married over the age of 65 had already been married once before, either being widows/widowers or divorcees.

Even so, people are waiting until their thirties to get married for the first time. During that time, even before their first go around, brides and grooms may have already accumulated enough assets to call for a prenuptial agreement to safeguard their possessions. Sarah Balfour, a partner at Irwin Mitchell who spoke at the Later Life Planning Conference in London last month, says she had seen a considerable increase in the demand for prenuptial and occasionally for postnuptial agreements to assign assets after marriage. “One of the largest areas concerns second- or third-generation wealth. Grandparents ask their grandchildren to enter into a pre-nup." In the United Kingdom, prenuptial agreements do not carry statutory weight so it is questionable whether they would survive a divorce.

The Supreme Court in the UK said in a landmark case in 2010 that if the evidence was strong, prenuptial agreements could have decisive or compelling weight. Lawyers and legal scholars perceive the case as test of whether certain prenuptial agreements will stand up in court in England and Wales. But to have any true weight, they must be fair to all parties involved.

See Lindsay Cook, Has Granny Signed a Pre-Nup?, Financial Times, May 15, 2019.

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

May 16, 2019 in Current Affairs, Elder Law, Estate Administration, Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0)

Wednesday, May 15, 2019

Stan Lee’s Former Manager Charged with Theft and Elder Abuse

StanleeLos Angeles prosecutors have filed charges of theft, embezzlement, forgery or fraud against an elder adult, and false imprisonment of an elder adult against Keya Morgan, 43, the former manager of the late Stan Lee. Morgan became especially close to Lee after the passing of Lee's wife, Joan, in 2017, and in essence became the gatekeeper to getting to the comic book genius. The charges extended back to June of 2018 and up to Lee's death in November.

In June, attorneys for the 95-year-old Lee and his daughter, JC, were granted a restraining order against Morgan that barred contact with Lee and revealed that police were investigating Morgan for elder abuse. The petition against Morgan alleged that he was manipulating the mentally declining Lee, preventing him from seeing family and friends, and trying to take control of his money and business affairs.

Morgan has repeatedly denied the allegations of elder abuse. He has not responded to requests for comment dealing with the charges, but last year he had tweeted: “For over 10 years I have shown nothing but love, respect & kindness to Stan Lee, & his wife, a fact he has repeated countless time. I have NEVER EVER abused my dear friend. Everything you read in the #FakeNews is pure malicious lies & I will 100% prove it. The truth will come out.”

See David Ng, Stan Lee’s Former Manager Charged with Theft and Elder Abuse, Los Angeles Times, May 15, 2019.

May 15, 2019 in Current Events, Elder Law, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Monday, May 13, 2019

Even the Best Laid Plans Can Go Awry: The “Breakdown” of Tom Petty’s Estate Plan

TompettyTom Petty’s unexpected death on October 2, 2017 dismayed his fans worldwide. Whenever a celebrity passes away, especially when it is sudden, the news sadly can be followed up with the story of how they failed to plan for their death, such as was the case with Prince and Aretha Franklin. But Tom Petty had a complete estate plan laid out, including a 77-page revocable trust document that he diligently amended throughout his life.

In the trust agreement, Tom named his second wife, Dana York Petty, to serve as the successor trustee after his death. One of her responsibilities was to create an LLC to hold Petty's music catalog. Though Dana is to have broad discretion such as how the limited liability company makes decisions, Petty's two daughters from his previous marriage are entitled to “participate equally” in the management of the limited liability company. The wording has unfortunately created tensions between the daughters and their stepmother.

The daughters have taken the position that, as the holders of the majority vote of the company, they have the power to control the company, including Petty’s artistic property. Dana, on the other hand, has taken the position that Petty intended for the parties to unanimously consent to actions taken by the company. Litigation has ensued between the parties.

Though Tom Petty appeared to put together a well executed estate plan and trust document, a prudent estate planning attorney may have advised him to appoint an independent trustee to serve as the successor trustee following his death and to require a professional manager to operate the limited liability company. The objectiveness of the independent trustee can foster confidence and cooperation between the trustee and the beneficiaries.

See Mary Rennie Rowe “M.R.” Litman, Even the Best Laid Plans Can Go Awry: The “Breakdown” of Tom Petty’s Estate Plan, WilliamsMullen.com, May 7, 2019.

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

May 13, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Music, New Cases, Trusts, Wills | Permalink | Comments (0)

Thursday, May 9, 2019

Article on The Supreme Court, Due Process and State Income Taxation of Trusts

ScotusBridget J. Crawford & Michelle S. Simon recently published an Article entitled, The Supreme Court, Due Process and State Income Taxation of Trusts, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

What are the constitutional limits on a state’s power to tax a trust with no connection to the state, other than the accident that a beneficiary lives there? The Supreme Court of the United States will take up this question this term in the context of North Carolina v. Kimberley Rice Kaestner 1992 Family Trust. The case involves North Carolina’s income taxation of a trust with a contingent beneficiary, meaning someone who is eligible, but not certain, to receive a distribution or benefit from the trust, who resides in that State. Part I of this Essay explains the background of Kaestner Trust and frames the constitutional questions that will be before the Court at oral arguments on April 16, 2019. Part II examines how and why due process applies in the state income taxation context, with a particular emphasis on how familiar concepts of general and specific jurisdiction apply uneasily to donative trusts. Part III articulates the reasons that the Court should hold that a State has no constitutional authority to impose a tax on trust income where the trust’s only connection with the forum State is the residence of a contingent beneficiary. Kaestner Trust is the most important due process case involving trusts that the Court has decided in over sixty years; it bears directly on the fundamental meaning of due process.

May 9, 2019 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Income Tax, New Cases, Trusts | Permalink | Comments (1)

Monday, May 6, 2019

Aretha Franklin's Estate to Sell Late Singer's Property to Help Pay Off her Remaining $5.3 Million Tax Debt

ArethaThe estate of the Aretha Franklin, who passed away this last August from pancreatic cancer, has petitioned the court to sell a vacant block of land in Bloomfield Hills, Michigan to help pay off the singer's tax debt of $5.3 million. The land, as well as a house being built on the plot, will be placed on the market for $1.4 million.

It was also revealed last month that Franklin reported a missing check of $178,000 to Bloomfield Township police back in June 2018. The investigation of the theft remains open, and has the possibility of adding more animosity among her family and her estate. The police tracked down the check and spoke with the teller who had endorsed it at the bank, but they did not release any further details of their relationship with the singer.

The diva's estate attorney, David Bennett, claimed that she "always paid her debts" but she "did not immediately cash checks." He said in December that "She had a lot of (pay) checks lying around that she had never cashed. I had to have some of them reissued because they were so old. I don't know why she didn't cash them, but it seems that the IRS figured some of it as undeclared income and are going after it."

See Annita Katee, Aretha Franklin's Estate to Sell Late Singer's Property to Help Pay Off her Remaining $5.3 Million Tax Debt, Daily Mail, May 4, 2019.

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

May 6, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Income Tax, Intestate Succession, Music, New Cases, Trusts, Wills | Permalink | Comments (0)

Thursday, May 2, 2019

Man Flushed Grandparents’ Ashes When Mom Kicked Him Out: Police

ToiletThomas Wells from west Pennsylvania was arraigned Monday on two counts of abuse of a corpse and a criminal mischief charge. He is suspected of flushing the cremated remains of his grandparents down the toilet because he was angry that his mother was kicking him out of her home.

The 33-year-old man had been staying for a short time with his mother, but then was requested to leave in September of last year. The mother was not aware of what her son had done until February when a relative told her. The box that contained the ashes had been in the mother's bedroom.

The police say that Wells told his mother he did not do it, but that he would flush her ashes down the toilet after she died.

See Man Flushed Grandparents’ Ashes When Mom Kicked Him Out: Police, Penn Live, April 30, 2019.

May 2, 2019 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Wednesday, May 1, 2019

Father Wants Daughter’s Body Back After Giving her Remains to Alleged Black Market Dealers: Report

ToetagJohn Butsch believed that he was following his 26-year-old daughter Alexandria's last wishes when he donated her body to science 5 years ago. He donated her body to the Biological Resource Center of Illinois in 2014, but just months later the Institute was raided by the FBI and shut down.

Butsch says that he was given some ashes that the FBI claimed were the remains of Alexandria, but he says that is a lie. Why? Because her body was found during the raid and is being held in federal holding in Detroit.

The two men who allegedly ran the Biological Resource Center of Illinois, Donald Greene Sr. and Donald Greene Jr., were federally charged in April, the father with wire fraud and the son with concealing a crime. The father-son duo allegedly knowingly sold body parts infected with diseases including HIV, sepsis and hepatitis from 2008 to 2014. According to the search warrant, families donated their loved ones bodies to them, believing that the cadavers would be used for medical research. Instead, the bodies were kept on ice and sold, sometimes for up to $100,000. Their plea dates have been set for June 2.

See Ann W. Schmidt, Father Wants Daughter’s Body Back After Giving her Remains to Alleged Black Market Dealers: Report, Fox News, April 30, 2019.

May 1, 2019 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Saturday, April 27, 2019

CLE on For Better or for Worse: Spousal Rights in Retirement Plans

CLEThe American Law Institute is holding a webcast entitled, For Better or for Worse: Spousal Rights in Retirement Plans, on May 14, 2019 from 12:00 to 1:30 PM Eastern. Provided below is a description of the event.

Why You Should Attend
While the available tax incentives motivate more and more people to hold substantial wealth in qualified plans and individual retirement accounts, many plan participants don’t understand how the distributions work or how to pass that tax benefit on to their beneficiaries. Who can be a designated beneficiary? How do the distribution options change for beneficiaries that are spouses vs. non-spouses? What happens when the account owner is divorced or remarried?

In this 90 minute webcast, we’ll explore how spousal rights to retirement plans can vary from state to state and what your clients can to do ensure that their assets go to their intended party.

What You Will Learn
The presenters, all highly experienced estate planning practitioners and Fellows of the American College of Trust and Estate Counsel (ACTEC), will review:

    • The impact of Windsor and Obergefell on retirement plan benefits in same-sex unions
    • Spousal rights in retirement plans subject to ERISA
    • How spousal rights can vary considerably among the common law and community property states
    • ERISA preemption of state laws
    • Case studies illustrating spousal rights in both common law and community property states
    • Best practices in planning to maximize chances that clients’ intended outcome will occur

April 27, 2019 in Conferences & CLE, Current Affairs, New Cases, Non-Probate Assets | Permalink | Comments (0)