Wills, Trusts & Estates Prof Blog

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

Tuesday, March 19, 2019

New York Woman 'Sucked into Parents' Grave' Suing Cemetery

TombstoneJoanne Cullen was visiting the final resting place of her parents in Long Island found herself falling into a sudden sinkhole at the cemetery. her lawyer, Joseph Perrini, says that the fall caused her to pitch forward and hit her face on a tombstone and cracked a tooth. The stunned woman says she sunk into the grave down to her hips, and her cries for help went unanswered.

The scene occurred on December 29, 2016. “Getting sucked into your parents’ grave when you go to visit them on a cool December afternoon with the sun going down … it’s terrifying and traumatizing,” the lawyer said. Now the North Bellmore woman is seeking $5 million from the St. Charles Resurrection Cemetery administrators’ from the trauma of the event.

She claims that she is terrified to visit her parent's grave again, suffers from headaches and nightmares, and now fears walking in open fields. Perrini contends that gravediggers who backfilled an adjacent grave to Cullen’s parents left an underground void that caused Cullen to descend into the ground.

See New York Woman 'Sucked into Parents' Grave' Suing Cemetery, Fox News, March 17, 2019.

March 19, 2019 in Current Events, Estate Planning - Generally, Humor, New Cases | Permalink | Comments (0)

Sunday, March 17, 2019

Article on Burying Contracts of the Dead

ContractWilliam A. Drennan recently published an Article entitled, Burying Contracts of the Dead, Probate and Property Magazine, Vol. 33 No. 2, March/April 2019. Provided below is the introduction to the Article.

Generally, contracts of the dead survive to haunt the living; the executor or other successor must perform the decedent's remaining contractual duties. A major exception is that personal service obligations dies at death. As a result, executors, their attorneys, and courts may need to decide if contractual obligations are personal or impersonal. Sometimes, performing a contact that appears to be impersonal would be economic senselessness for one or both sides. This may occur if the executor or other successor is unskilled at the business of the dead, or the deal simply makes no sense post-death for one or both sides.

This article highlights cases in which the decedent's remaining contractual duties appeared impersonal, but the court characterized those obligations as personal services or otherwise discharged the obligations. These precedents may help attorneys steer their clients from economic senselessness.

March 17, 2019 in Articles, Elder Law, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

High Court Should Affirm Kaestner State Trust Tax Case

CourtroomNorth Carolina’s Supreme Court held that the state cannot tax the income of a trust created and administered outside of North Carolina, even though the trust’s beneficiaries reside in North Carolina in Kimberly Rice Kaestner 1992 Family Trust v. North Carolina Department of Revenue. Now, the nation's higher court has agreed to hear the case.

The lower court founded its decision on two premises: that a trust is a separate entity from the beneficiaries - much like a corporation, and that the trust such as the one in the case lacked the required minimum contacts constitutionally required to be subject to taxation by the state. South Dakota v. Wayfair may have modified the minimum contacts requirement under the Commerce Clause, the due process analysis from Quill Corp. v. North Dakota remained the same. Because the state supreme court applied the proper analysis, the Supreme Court of the United States should affirm the decision.

“Purposeful availment” for minimum contact purposes pertains to the trust’s governance and the administration of its assets, not to trust communications with beneficiaries. Just because the beneficiaries reside in North Carolina does not give the state enough contact with the trust to tax the trust itself.

See Edward Zelinsky, High Court Should Affirm Kaestner State Trust Tax Case, Tax 360, March 5, 2019.

March 17, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Income Tax, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0)

Thursday, March 14, 2019

A Dying Man, a Typo and the Bitter Dispute Pitting 2 Nashville Religious Institutions Against 3 Children

Error4 non-profits, two of which are Nashville institutions, are fighting against three young children, claiming that they are the righting beneficiaries to land that has belonged in the family for more than 200 years. The acres were deeded to a Blackburn ancestor by President Andrew Jackson, prior to the War of 1812. But the lack of two words in a will of a Blackburn that passed away in 2014 has caused the organizations to believe that they deserve hundreds of acres now worth millions of dollars.

When Barry Blackburn, Sr., died at the age of 48 in 2014, his will left all of the land to his son Christopher in a lifetime trust, and then would pass to Christopher's children. If his son predeceased him, the land would go to his sister's three young children, aged 3, 8, and 13. If there were no surviving beneficiaries, the land would be divided equally among the Nashville Christian School, Harpeth Presbyterian Church (which was founded by Gideon Blackburn in 1811), the University of Mississippi law school and Boykin Spaniel Rescue. Christopher died a year after his father without begetting any children.

A Mississippi judged determined that the missing words, "or dies," amounted to a scrivener's error, and that the testator's intent had been to leave the land in the family. Evidence from Blackburn's assistants were introduced, including notes of conversations among them that showed his intent was for the charities to receive the land as a "last resort." The assistants claimed responsibility for the clerical error.

See Anita Wadhwani, A Dying Man, a Typo and the Bitter Dispute Pitting 2 Nashville Religious Institutions Against 3 Children, Tennessean, March 14, 2019.

Special thanks to Turney Berry (Wyatt, Tarrant, & Combs, LLP, Louisville, Kentucky) for bringing this article to my attention.

March 14, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Religion, Trusts, Wills | Permalink | Comments (1)

Tuesday, March 12, 2019

Steve Bing's Father Says Granddaughter Will Inherit NOTHING

Father20-year-old Kira Kerkorian Bing was raised believing she was the daughter of casino tycoon Kirk Kerkorian (who had been married to her mother, Lisa Bonder, for 28 days in 1999), even receiving $8.5 million from her alleged father's estate in 2016. However, a DNA test that same year revealed that she was the daughter of film producer Steve Bing, who is the son of multi-millionaire Peter Bing. Now, the sorority girl from UCLA is claiming that she is a beneficiary of a trust set up for Peter Bing's "future grandchildren."

The trust, however, defines grandchildren that would benefit from the trust very specifically, according to the trustee in court documents filed in Los Angeles.. They cannot be adopted at a later age, and if born out of wedlock, they must either live with their parent or spend significant time with them as a child. Because Kira did neither, the older Bing says that she is not entitled to be named as a trust beneficiary. The trust is requesting the court to confirm that Kira is not a trust beneficiary as well as blocking her from obtaining trust related information. 

The same would apply to the 16-year-old son of Steve Bing and actress Elizabeth Hurley. Damian Hurley neither lived with his father nor has yet to meet him. He denied that the boy was his son until a DNA test confirmed that he was, indeed, the father.

See Cheyenne Roundtree, Millionaire Steve Bing's Father says Granddaughter who Claimed to be Casino Tycoon Kirk Kerkorian Love Child Will Inherit NOTHING Because She was Born Out of Wedlock - and Neither Will Elizabeth Hurley's Son 'Who Steve Never Met,' Daily Mail, March 6, 2019.

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

March 12, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Sunday, March 10, 2019

Article on Disability, Poverty, and the Policy Behind the ABLE Act

NaelaNancy Susan Germany, Esq. recently published an Article entitled, Disability, Poverty, and the Policy Behind the ABLE Act, NAELA News Journal, September 2018. Provided below is the introduction of the Article.

The Achieving a Better Life Experience (ABLE) Act enables independence and self-reliance for persons with disabilities. The act created the ABLE account, a powerful tool to help persons with disabilities save money and control their own future. The ABLE account has become enormously popular. States that have implemented ABLE programs report thousands of participants and millions of dollars being saved by persons with disabilities. Ohio opened the first ABLE program on June 1, 2016. Since then more than 34 states have started ABLE programs, with more states joining on a regular basis.

ABLE accounts allow persons with disabilities to save money without jeopardizing their eligibility for public benefits. ABLE account income grows tax free and if spent on qualified disability expenses (QDEs) remains tax free. Persons with disabilities are in control of their own accounts, thus giving them more self-determination in their financial futures. This freedom to control their own money is a first for many persons with disabilities.

The ABLE account has rare bipartisan support and indicates Congress’s attempt to address the situation of people with disabilities who live in poverty, survive on meager incomes, and face asset limitations in an effort to maintain public benefit eligibility. The use of ABLE accounts will likely be expanded in the future.

Strict limitations apply to ABLE account use. An ABLE account can only be used by persons disabled prior to age 26 and must be funded with cash. The maximum funding amount each year is limited to the annual gift tax exemption amount ($15,000 in 2018). For Supplemental Security Income (SSI) eligibility purposes, an ABLE account is exempt up to $100,000; for Medicaid-only eligibility purposes, it is exempt up to a state’s 529 plan limit. If ABLE account income is spent on non-QDEs, it is taxed, and a penalty is assessed, and on the death of the person with a disability, payback to the state Medicaid agency applies. Due to these limitations, the ABLE account is not enough to break the cycle of poverty for many persons with disabilities. It does, however, provide some relief and can be used as part of an effective special needs plan.

This article reviews how the ABLE account came into existence, compares ABLE accounts with special needs trusts (SNTs), and discusses ABLE account legal requirements, how various federal agencies have interpreted ABLE accounts, and the options available in states’ ABLE programs.

March 10, 2019 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Thursday, March 7, 2019

Amicus Brief filed with Supreme Court

ActecAn amicus brief in The North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust was filed on March 1, 2019, with the Supreme Court by ACTEC. This is an important case dealing with the ability of a state to tax the income of an irrevocable nongrantor trust. The College took no position in the case, but instead, as noted in the brief, the brief was filed to:

“assist the Court in understanding the history and practice of state fiduciary income taxation as applied to accumulated income in nongrantor trusts and the complexities of such statutes in the context of the multi-state contacts common in today’s mobile society.”

Oral argument in Kaestner is set for April 16.

Special thank to Suzy Shaw for bringing this article to my attention.

March 7, 2019 in Current Events, Estate Planning - Generally, Income Tax, New Cases, Trusts | Permalink | Comments (1)

Monday, March 4, 2019

Beneficiaries Hit with Transferee Liability Suit for Estate Taxes 19 Years After Date of Death

CourtIn the case of U.S. v. Ringling, 123 AFTR2d 2019-XXXX (DC SD 2/21/19), the circumstances shed light on the fact that beneficiaries and recipients of property from a decedent do not receive the property free and clear from estate tax liabilities. Under Code §6324(a)(2), the Internal Revenue Service can seek to collect these taxes, even if it has been many years.

The statute of limitations is 10 years from the date the assessment of tax is made against the estate. Here, the IRS filed suit in the 9th year of that 10 year period (and 19 years after the date of death). And it does not have to be an exuberant amount for the IRS to come after the beneficiaries after such a period of time, either. In the present case, the unpaid tax was $28,939 (but with interest and penalties the amount sought was $65,874.80.

See Charles Rubin, Beneficiaries Hit with Transferee Liability Suit for Estate Taxes 19 Years After Date of Death, Rubin on Tax, March 3, 2019.

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

March 4, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Friday, March 1, 2019

U.S. Supreme Court Rules Against Executing Death Row Inmates with Dementia

CourtroomU.S. Supreme Court ruled on Wednesday that States cannot execute prisoners who are incapable of rationally understanding the reasons for their punishment. A 5-3 opinion handed down by the Court tossed out an Alabama state court ruling that Vernon Madison, 68, was legally eligible to be executed, sending it back down to the lower courts to reconsider the case.

Madison shot Mobile police officer Julius Schulte twice in the back of the head in 1985 while the officer supervised Madison's move out of his former girlfriend's house. He was sentenced to death in 1994. But in recent years the inmate has suffered strokes resulting in brain damage, dementia and retrograde amnesia, thus effectively wiping the memory of the murder of Schulte. Madison is now legally blind, speaks with a slur, and can only walk with assistance.

The justices ruled that the United States Constitution's Eighth Amendment bars cruel and unusual punishment, and thus prohibits capital punishment for those who, because of dementia, mental illness or other disorders, cannot understand why they will be put to death. Justice Elena Kagan said a state is not barred from administering the death penalty if a prisoner merely forgets committing a crime. "The Eighth Amendment requires, and the state must find, that [Madison will] understand why."

See Andrew Chung, U.S. Top Court Backs Killer who Forgot Crime in Death Penalty Case, MSN, February 27, 2019.

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

Thursday, February 28, 2019

Eleventh Circuit: Florida Real Estate Law Prevented Collection of Federal Estate Taxes

CourtIn 1940, The Supreme Court held that “when the United States becomes entitled to a claim, acting in its governmental capacity and asserts its claim in that right, it cannot be deemed to have abdicated its governmental authority so as to become subject to a state statute putting a time limit upon enforcement.” The Eleventh Circuit court was tasked recently with defining the relationship between that ruling and Florida statute § 95.231.

The statute allows a defective deed to be cured after five years. Such a deed was executed in Florida in 1998 when a father attempted to transfer property to a trust for the benefit of his son. After the father’s death in 2005, the United States imposed a series of liens on the property in an attempt to assess estate taxes.

Was the statute "putting a time limit upon enforcement" or was the defective deed effectively cured in 2003, 5 years after the execution of the deed? The middle Florida court held that the statute did not create good title because the deficiency was not among the technical defects within the statute’s scope. The Eleventh Circuit reversed, finding that the statute was “not a traditional statute of limitation but . . . a curative act with a limitation provision.”

See Lindsey Catlett, Eleventh Circuit: Florida Real Estate Law Prevented Collection of Federal Estate Taxes, Balch, February 18, 2019.

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

February 28, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)