Wills, Trusts & Estates Prof Blog

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

Friday, November 9, 2018

Billionaire Family Feud Widens as Son Sues Sister

CanadaOne of Canada's richest family's drama and intrigue thickens. Former Magna International Inc. Chief Executive Officer Belinda Stronach is now being sued by her brother Andrew, claiming that he has lost faith in her and that she should be removed from a family trust. Andrew wants her to be replaced by their billionaire father, who is also suing Belinda at a tune of $520 million Canadian dollars.

Both disputes arise from Belinda handling of the family trusts after her father, Frank Stronach, handed over control of them to pursue politics in his native country of Austria. The latest suit, filed November 1, claims Belinda and trustees “have undertaken a number of improvident and costly investments that have resulted in significant losses.” The lawsuit also alleges that Andrew was not giving proper accounting of the trust. “To date, Andrew’s proper and reasonable requests for information have been ignored, or only partially answered after lengthy delays and following repeated requests for disclosure,” according to documents filed with the Ontario Superior Court.

“The filing on behalf of my brother is an extension of my father’s legal pursuit against me and my children, and the allegations remain just as untrue,” Belinda Stronach said in a statement Monday. “We will be responding formally in due course. It saddens me greatly that we have reached this juncture in our family.” A spokesperson said that both claims were completely without merit.

See Doug Alexander & Fredric Tomesco, Billionaire Family Feud Widens as Son Sues Sister, Financial Advisor, November 8, 2018.

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

November 9, 2018 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Travel, Trusts | Permalink | Comments (0)

Thursday, November 1, 2018

Home Transferred to Trust with Retained Interest Subject to NJ Inheritance Tax

Trust2A husband and wife transferred their home into an irrevocable trust, retaining the right to live in the home until the death of the survivor. At that time all of the assets of the trust would transfer to their niece. The lower New Jersey Tax Court held that the assets were subject to the state's inheritance tax on the house's full value because the couple kept a life interest in the home.  The niece could not enjoy the house until the couple had passed because of their retention.

The New Jersey Appellate Division recently issued its opinion in Estate of Van Riper v. Dir., Div. of Taxation, affirming the judgement of the lower court. The Estate argued that because each spouse only owned a half interest in the home at the time of the transfer to the trust, the assets should have only been taxed at half value.

The appeals court declined the argument on the grounds that the home was owned by the couple as tenants by the entirety. This reasoning was further supported by the fact that at the first spouse’s death no Inheritance Tax was paid on the property as it qualified as an exempt transfer from husband to wife under New Jersey law.

See Cole Schotz, Home Transferred to Trust with Retained Interest Subject to NJ Inheritance Tax, Lexology, October 29, 2018.

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

November 1, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Tuesday, October 30, 2018

Court Affirms Judgment that Power-Of-Attorney Holder Converted Funds by Withdrawing them from a Joint Account

TXflagA Texas appeals court affirmed the decision of the lower Fort Worth court, finding that a brother used his power-of-attorney given to him by his brother (the decedent) to wrongfully exercise dominion and control over the money in a joint account to the exclusion of, or inconsistent with, the sister in law’s rights, who was the other account holder of the account.

The brother argued that the sister in law did not own the funds because the decedent was the sole source of them and the withdrawal was legal and authorized because the power of attorney allowed the brother to undertake banking transactions. However, an employee of the bank testified that the two account holders, decedent and the sister in law, had equal rights of access to the account. The brother admitted that he knew it was a joint account with rights of survivorship and that he took the funds solely so the sister in law would not receive them when his brother passed away.

The brother tortiously interfered with the sister in law’s right to obtain the decedent’s funds once the decedent died. However, the Supreme Court of Texas does not have a remedy for tortious interference with inheritance claims.

See David Fowler Johnson, Court Affirms Judgment that Power-Of-Attorney Holder Converted Funds by Withdrawing them from a Joint Account, Texas Fiduciary Litigator, October 27, 2018.

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

October 30, 2018 in Current Affairs, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Monday, October 29, 2018

New York Estate Tax Win Opens Floodgates for Millions in Refunds and Future Tax Savings

NyIn the matter of the will of Evelyn Seiden, the court overturned the state’s 2014 tax on the marital trust established on her husband’s death in 2010, ordering a refund of $530,000 back to her estate. This quiet case could case upheaval for many New York trust and estates, as the parties could use similar arguments to receive equally large refunds and savings. The executor’s argument boiled down to this: New York cannot tax what the IRS cannot tax.

QTIPs usually allow tax deferral, as at the first spouse’s death, assets go into a trust for the lifetime of the surviving spouse, and is not taxed until it is included in the estate of the second spouse upon their death. But because of the one-year federal estate tax repeal in 2010 and the New York state estate tax laws, the Seiden estate lawyers argued that they could avoid including the value of the trust in the widow’s estate altogether.

Bruce Steiner, a New York estate lawyer who wasn’t involved in the case, notes that it potentially applies to not just surviving spouses of New Yorkers who died in 2010, but to others who filed only New York estate tax returns.

The state has until mid-November to appeal. And the legislature could amend the tax law to apply to future estates.

See Ashlea Ebeling, New York Estate Tax Win Opens Floodgates for Millions in Refunds and Future Tax Savings, Forbes, October 25, 2018.

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

October 29, 2018 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, New Cases, Trusts, Wills | Permalink | Comments (0)

Friday, October 26, 2018

Oligarch a Step Closer to Losing $585 Million Divorce Battle

YachtFarkhad Akhmedov, a Russian billionaire that made his fortune from natural gas, claims that the 2016 divorce decree from his wife Tatiana Akhmedova is invalid because he divorced her 16 years ago in Russia. The London court where Tatiana won her claim awarded her 41% of Farkhad's fortune, totalling $585 million. The Moscow City Court has rejected an appeal by the businessman seeking to prove the existence of that divorce.

In the London case, Akhmedov’s lawyers produced "official" documents confirming the Russian divorce. The judge, however, suggested that the Moscow documents "were, at all material times, forged," and an official finding that Akhmedov failed to submit "sufficient and credible evidence."

To attempt to enforce the settlement, Tatiana tried to seize the billionaire’s 380-foot luxury yacht, the MV Luna, valued at $492 million. The nine-deck yacht, complete with two helipads, eight smaller boats, and a mini-submarine, is currently impounded in Dubai.

The 63-year-old has said he had supported his wife even after their marriage was dissolved in Russia, and cynical lawyers were to blame for filing for a second divorce in the British legal system. In a terse text message Akhmedov stated that, despite the rulings, the chance of his ex-wife collecting the full judgment was “zero.”

See Johnathon Browning & Irina Reznik, Oligarch a Step Closer to Losing $585 Million Divorce Battle, Bloomberg, October 19, 2018.

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

October 26, 2018 in Estate Planning - Generally, New Cases | Permalink | Comments (0)

Monday, October 22, 2018

CLE on Technology and Estate Planning: The Rise of the Electronic Will

CLEThe American Law Institute is holding a webcast entitled, Technology and Estate Planning: The Rise of the Electronic Will, on Tuesday, February 26, 2019, at 12:00 p.m. to 1:30 p.m. Eastern. Provided below is a description of the event.

Why You Should Attend

Did you know that:

A will handwritten and witnessed on a tablet was probated in Ohio

An unwitnessed will written on a smartphone was probated in Michigan

Three states now have statutes validating electronic wills, and one of those states allows the testator and the witnesses to be in different locations

  Electronic wills are here, and they're headed your way! In recognition of the proliferation of technology in our lives, more and more states are now allowing for electronic wills. Further, a proposed uniform statute on electronic wills is nearing completion, and several start-up companies are clamoring to offer electronic wills on mobile phone applications.    If you want to stay ahead of the curve in your estate planning practice, join us for this 90 minute audio webcast to understand where we are now and where we are going with electronic wills!  

What You Will Learn

Three fellows of the American College of Trust and Estate Counsel – including the chair of the Uniform Law Commission’s Drafting Committee on Electronic Wills – will discuss:  

Which states now validate electronic wills, and which states have draft legislation under consideration?

What is the status of the Uniform Electronic Wills Act?

What will electronic wills do to your practice, and what can you do to get ready for them?

What are the concerns with authentication, security, and storage?

Will other end-of-life planning documents, such as advance medical directives or powers of attorney for health care or finance, follow suit?

Who Should Attend

Any estate planner will benefit from learning the latest developments with electronic wills and how they will impact your practice.

October 22, 2018 in Current Affairs, Current Events, Elder Law, Estate Administration, Estate Planning - Generally, New Cases, Technology, Wills | Permalink | Comments (1)

Thursday, October 18, 2018

Chinese Woman Kills Herself and Children After Husband 'Fakes Death'

HeA 34-year-old Chinese man identified as Mr. He purchased an insurance plan worth one million yuan in early September without informing his wife about it. He had also named his wife as the beneficiary on the plan. Later that month, the car that Mr. He had borrowed was found in a river, though his body was never recovered.

Three weeks later on October 11, the bodies of his 31-year old wife, 4-year-old son and 3-year-old daughter was found in a pond near their home. A suicide note written by the wife had also been posted online before the bodies were found. Mr. He turned himself in to authorities the next day after he issued an online video in which he was crying and saying he had borrowed money to pay for treatment for his 3-year-old daughter, who suffered from epilepsy.

It has been determined that Mr. He had loans of more than 100,000 yuan. Mr. He has been detained on charges of insurance fraud and intentional damage to property, Xinhua police said in a statement.

See Chinese Woman Kills Herself and Children After Husband 'Fakes Death,' BBC, October 17, 2017.

Special thanks to Jay Brinker (Cincinnati Estate Planning Attorney) for bringing this article to my attention.

October 18, 2018 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Monday, October 8, 2018

Farmland Inheritance: Intentional Interference Judgement Upheld in Court

FarmOn July 18, 2018, in the case In the Matter of Estate of Lois B. Erickson the Iowa Court of Appeals affirmed a trial court finding of invalidity of a will based on undue influence and lack of testamentary capacity. They further held that one party was liable for tortious interference with a bequest.

Lois B. Erickson had three adult children: Wayne, who farmed, and Alan and Mary Ann who did not farm. The majority of their mother's estate consisted of farmland. Lois executed a will in 2010 that divided her estate equally among her three children. In 2011, however, a new will was drafted that gave the majority of the estate to Wayne. The other two children shortly afterwards pursued a guardianship for their mother. When Wayne learned of the impending guardianship hearing, he had his mother sign an amendment 2 days prior to the court hearing that anyone that contested the 2011 will would "reimburse my son, Wayne D. Erickson, at the rate of $1,500.00 per hour.” The physician who evaluated Lois for the guardianship hearing diagnosed her with “moderate to severe” Alzheimer’s.  The court thus ordered Alan to serve as his mother’s guardian.

The appellate court found the 2011 will was invalid based upon Wayne’s undue influence over his mother and the fact that Lois lacked testamentary capacity when she executed the will.  Regarding Lois’ testamentary capacity, the court cited Lois’ physician’s diagnosis of severe Alzheimer’s disease and the physician’s view that Lois could not make any major decisions on her own. As to undue influence, the court again cited Lois’ medical diagnosis.

The appellate court found that tortious interference does not mean the same thing as undue influence.  Tortious interference takes more:

The necessary proof in an action for intentional interference with a bequest or devise focuses on the fraud, duress, or other tortious means intentionally used by the alleged wrongdoer in depriving another from receiving from a third person an inheritance or gift.

On several occasions Wayne accused his siblings of stealing from his mother in an effort to have them disinherited. Every time the police were involved they found no evidence of theft.

See Holly M. Logan, Farmland Inheritance: Intentional Interference Judgement Upheld in Court, David Brown Law, September 4, 2018.

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

October 8, 2018 in Disability Planning - Property Management, Elder Law, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Thursday, October 4, 2018

American Couple Lose Appeal to Keep Pissarro Painting Looted by Nazis

PissarroThe Nazis stole approximately 650,000 pieces of art during World War II and around 100,000 had not been returned by 2009, according to figures released at the Holocaust Era Assets Conference held in the Czech Republic that year. The Nazis and the Vichy regime pilfered 93 paintings from Jewish businessman Simon Baur in France, one of which his descendants will get returned - La Cueillette by Impressionist Camille Pissarro.

American couple Bruce and Robbi Toll purchased the painting in 1995 from auction house Christie's in New York for $800,000, not realizing that the artwork was on a French registry of looted items. Last year the descendants of Simon Baur saw that the painting was part of an exhibit on Pissarro in Paris. In November, a French court accepted the argument that the Tolls had purchased the piece in good faith as they were patrons of Holocaust museums, but ruled that the painting belonged to Baur's family by right.

On Tuesday an appeals court in France agreed with the trial court. The verdict paves the way for the Bauer family to retrieve the painting, which during the court case has been kept locked up by the Musee d'Orsay and Orangerie museums. That same day, the French government also decreed that the Commission for Compensating Looting Victims (CIVS) will now be able to launch an investigation on an individual's request and recommend appropriate compensation.

See Agence France-Presse, American Couple Lose Appeal to Keep Pissarro Painting Looted by Nazis, The Telegraph, October 2, 2018.

October 4, 2018 in Current Events, Estate Planning - Generally, New Cases, Travel | Permalink | Comments (0)

Wednesday, October 3, 2018

Article on Oh the Insanity: After 124 years, It's Time to Amend Mississippi's Slayer Statute to Account for the Insane Slayer

MississippiZachary B. Roberson published an Article entitled, Oh the Insanity: After 124 years, It's Time to Amend Mississippi's Slayer Statute to Account for the Insane Slayer, Wills, Trusts, & Estates Law eJournal (2017). Provided below is an abstract of the Article.

While almost every jurisdiction in the United States addresses slayer inheritance, many states have failed to account for the possibility of a slayer with a mental disability or disorder. Courts in states that do not have a modern slayer statute are left with the potentially unsettling task of applying an outdated slayer statute to a modern insanity fact pattern that was not contemplated by the state legislature when the slayer statute was enacted. For example, Mississippi’s slayer statute has not substantively changed in the 124 years since its original enactment. In a 2015 case, Estate of Armstrong v. Armstrong, the Mississippi Supreme Court held that the state’s slayer statute was inapplicable to killers who were found to be insane at the time of the killing. The court reasoned that an insane person lacks the ability to willfully kill as required by the state’s slayer statute. Considering the Mississippi Supreme Court’s recent decision in Armstrong and its public policy ramifications, this article, the first to analyze the Armstrong case, focuses on Mississippi law and the reasons why the Mississippi legislature must update the state’s slayer statute. This article contends that so called insane slayers should not be allowed to inherit from their victim. First, under Mississippi law, any monetary inheritance received by the insane slayer will be taken by the state to pay for the reasonable cost of care provided during the insane slayer’s involuntary commitment. Second, the insane slayer should not inherit from his or her victim because of the inferred change in the victim’s intent created by the insane slayer’s murderous act. Finally, the precedent set by the Armstrong decision disregards the traditional public policy justifications for slayer statutes. This article concludes with a recommended amendment to the Mississippi slayer statute which would create a mandatory disclaimer on the part of an insane slayer.

October 3, 2018 in Articles, Current Affairs, Estate Planning - Generally, New Cases, New Legislation | Permalink | Comments (0)