Wills, Trusts & Estates Prof Blog

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

Saturday, June 23, 2018

The Rich are Betting on Living to 100

SilverfoxAcross the world life expectancy has increased - except in the United States, which experts attribute to the opioid crisis in the country. But overall the wealthy are living longer in America, with the 1% having an average life span of 10 years longer for females and 15 years longer for males compared to the life expectancy of the lowest 1% in income.

Reaching triple digits is no easy feat, and can become quite costly. It could involve better food, higher level of healthcare, time for regular exercise, etc. The added years also mean having to keep paying your own expenses and bills during that extra time. In the UBS survey, which focused on people with more than $1 million in investable assets, 91% said they’re “making financial changes due to increased life expectancy.”

"Rising inequality is about more than just a widening gap in wealth and income. The richest Americans are also living much longer, healthier lives than everyone else."

See Ben Steverman, The Rich are Betting on Living to 100, Bloomberg, April 19, 2018.

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

June 23, 2018 in Current Affairs, Estate Planning - Generally, Technology | Permalink | Comments (0)

Steve Oshins Named Wealth Advisor Top Estate Planning Attorney of 2018

OshinsSteve Oshins has not been recognized on Wealth Advisor since being named to the list of Elite Estate Planning Attorneys in 2014. Oshins may be the current top estate planning attorney in the nation with his drive and expertise, according to the website.

Oshins is best known for creating the proprietary charts that rank each state as a favorable destination for cross-border trust assets in four separate categories: dynastic trust, asset protection, decanting and non-grantor trust.

See Scott Martin, Steve Oshins Named Wealth Advisor Top Estate Planning Attorney of 2018, Wealth Advisor, June 21, 2018.

June 23, 2018 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Friday, June 22, 2018

The Perils and Pitfalls of Grantor Trust Triggers

TrustNon-grantor trusts can be beneficial to clients to lower state income taxes. Generally most trusts are non-grantor trusts, but if the grantor retains, or is deemed to retain, certain powers or interests in a trust, then the trust’s income, deductions and credits will be attributed to the grantor and the trust will be a grantor trust. Also, IRC Section 674 provides that a trust will be a grantor trust if the beneficial enjoyment of the trust property is controlled by the grantor, the grantor’s spouse and/or a non-adverse party - UNLESS an exception to Section 674 applies.

IRC Section 674(b) and (c) provide for a total of 9 exceptions, but here are the top 4 that estate planning practitioners use to avoid triggering grantor trust status.

  1. HEMS. The trustee’s power to make distributions is constrained by a reasonably definite standard such as health, education, maintenance or support (HEMS) (IRC Section 674(b)(5)(A));
  2. Pro rata shares. The trust has multiple beneficiaries, but income and principal is distributed to such beneficiaries in accordance with their respective shares (IRC Section 674(b)(5)(B));
  3. Single beneficiary. The trust has only one current beneficiary, and the income and principal must be paid to such beneficiary (or such beneficiary’s estate) or to appointees designated by the beneficiary (IRC Section 674(b)(6)); and
  4. No real control. Neither the grantor nor the grantor’s spouse is serving as trustee, and no more than one-half of the trustees are related or subordinate to the grantor (IRC Section 674(c)).

See Jessica Galligan Goldsmith & David Y. Choi, The Perils and Pitfalls of Grantor Trust Triggers, Wealth Management, June 19, 2018.

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

June 22, 2018 in Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0)

Article on Other Fiduciary Duties: Implementing Loyalty and Care

FiduciaryRobert H. Sitkoff published an Article entitled, Other Fiduciary Duties: Implementing Loyalty and Care, Wills, Trusts, & Estates Law eJournal (2018). Provided below is the abstract of the Article:

This book chapter, prepared for the forthcoming Oxford Handbook of Fiduciary Law, canvasses the fiduciary duties other than the primary duties of loyalty and care. The core claim is that these other, subsidiary duties are field-specific elaborations of the primary duties of loyalty and care that implement those duties as applied to commonly recurring circumstances within the particular type or kind of fiduciary relationship. Together, the primary duties of loyalty and care, structured as open-ended standards, and the subsidiary duties, structured as rules or at least more specific standards, provide for fiduciary governance by a mix of rules, specific standards, and open-ended standards that mitigates the weaknesses of governance entirely by rules or standards alone. Fiduciary law thus improves on the familiar trope of rules versus standards as competing governance strategies. The increased specification provided by the subsidiary duties simplifies application of fiduciary obligation to cases that fall within their terms. But because the primary duties of loyalty and care remain operative, the specification for recurring matters provided by the subsidiary duties does not provide a roadmap for strategic avoidance behavior. If a fiduciary acts in a manner that is inimical to the principal’s interests and not addressed by a subsidiary duty, the principal may still invoke the open-ended primary duties of loyalty and care in challenging the fiduciary’s actions.

June 22, 2018 in Articles, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

CLE on Probate and Trust Litigation

The National Business Institute is holding a conference entitled, Probate and Trust Litigation, on Tuesday, June 26, 2018, at the Cobb Galleria Centre in Atlanta, Georgia. Provided below is a description of the event:

Program Description

Real-World Insights for Both Estate Litigators and Planners

Fiduciary problems, family dynamics, creditor issues, unclear estate plans . . . disputes can arise from many areas of trusts and estates. Do you know how to prevent fights, settle them efficiently or move a case through court when litigation is unavoidable? Our seasoned faculty will provide you with practical instruction and tips on handling common controversies. From will contests to fiduciary litigation and more, don't miss this opportunity to build your skills - register today!

  • Learn how to handle will contests and trust fights, interpretation issues and reformations.
  • Uncover the mechanics of proving or disproving undue influence/lack of capacity.
  • Find out when and how to remove a fiduciary.
  • Explore how to resolve disputes with accountings - or prevent them from happening in the first place.
  • Discover effective ways to settle disputes to avoid costly and protracted litigation.
  • Get a refresher on litigation procedures and rules you need to know.
  • Define who your client is to avoid conflicts of interest and other problems.

Who Should Attend

This intermediate level seminar is designed for attorneys. Accountants and paralegals may also benefit.

Course Content

  1. Wills and Trusts: Contesting, Interpreting, Reforming
  2. Testamentary Capacity and Undue Influence in Litigation
  3. Handling Claims Against Fiduciaries
  4. Disputing Accountings, Distributions and Creditor Claims
  5. Settlement Tips
  6. Navigating Court Rules, Processes and Procedures
  7. Applying Legal Ethics Rules and Guidelines

Continuing Education Credit

Continuing Legal Education – CLE: 6.00 *

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 7.00 *

* denotes specialty credits

June 22, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

After Killing Her Mother for Her Inheritance, Heather Mack Settles Claim

BaliHeather Mack and her boyfriend Tommy Schaefer were convicted of murdering Mack's mother, Sheila von Wiese-Mack, for her $1.6 million inheritance in Bali in 2014, infamously stuffing the body into a suitcase. While incarcerated in a notorious Indonesian prison, Mack has been fighting with the executor of her mother's estate, claiming that she was her mother's only beneficiary.

William Wiese, as exeuctor of Wiese-Mack's estate as well as the deceased's brother, has refused to pay out the inheritance to the convicted murderer, citing the Illinois slayer statute which states if you're involved in a murder and you're a beneficiary of a trust of the person you murdered, you lose all rights as a beneficiary.

The two have now reached an agreement and Heather Mack will not receive "any property, benefit, or other interest" from her mother's estate. Instead, the sole beneficiary of the remainder of Wiese-Mack's estate will go to Mack's three year old daughter Stella, who was born inside of the Indonesian prison in 2015.

Other details of the agreement were left confidential.

See Hannah Parry, Heather Mack Settles Claims for Mother's Estate Four Years After Killing Her With Her Boyfriend - and All the Money Left Will go to Her Daughter Stella, 3, Daily Mail UK, June 21, 2018.

June 22, 2018 in Current Events, Estate Administration, Estate Planning - Generally, Travel, Trusts, Wills | Permalink | Comments (0)

Thursday, June 21, 2018

Article on Freedom of Disposition in American Succession Law

Will and testamentRobert H Sitkoff recently published an Article entitled, Freedom of Disposition in American Succession Law, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article:

The organizing principle of the American law of succession is freedom of disposition. This book chapter surveys freedom of disposition in American succession law--intestacy, wills, trusts, and nonprobate transfers. The chapter also considers the main limits on freedom of disposition, focusing on forced shares for spouses, the Rule Against Perpetuities, and the federal wealth transfer taxes. For the most part, however, the American law of succession facilitates rather than regulates implementation of the decedent’s intent. Most of the American law of succession is concerned with enabling posthumous enforcement of the actual intent of the decedent or, failing this, giving effect to the decedent’s probable intent.

Note: The chapter is based on the author’s remarks at the Conference on Freedom of Testation and its Limits at the University of Lleida, Spain, on 20 April 2018.

June 21, 2018 in Articles, Estate Planning - Generally, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Lisa Marie Presley Sues Money Manager, Claims MisManagement of $100 Million Trust Fund

MarieThe daughter of famed American musician Elvis Presley, Lisa Marie Presley, is in the midst of a brutal divorce as well as a lawsuit against the ex-money manager of a trust set up for her benefit. Presley claims that Barry Siegel, "enriched himself with exorbitant fees" of more than $700,000 per year while placating her with emails that her trust was, "in good shape on your finance"' and that she should be, "assured that we are doing everything on our end to maintain both your current lifestyle and the future of you family." Instead, the trust that was once valued at $100 million is supposedly at only $14,000.

Presley's lawsuit blames her losses on Siegel's 2005 decision to sell 85% of her trust's stock in Elvis Presley Enterprises (EPE) - the trust's largest asset at the time." The Trust received $25 million in stock in American Idol's holding company as part of the sale of EPE. That company went bankrupt in 2016, "and in one week alone the Trust lost $24.5 million of the $25 million in stock,"' court documents say

She claims to owe $10 million in back taxes and $6 million in other debts, and her soon-to-be ex-husband is seeking $263,000 in annual alimony payments.

See Ryan Parry, EXCLUSIVE: Lisa Marie Presley Claims Her Ex-Money Manager Lost $100 Million Trust Fund Left to Her by Elvis With 'Reckless and Negligent' Investments While Paying Himself a Salary of $700,000, Daily Mail UK, June 18, 2018; see also Jay Brinker, Suspicious Minds, JayBrinker.com, June 21, 2018.

Special thanks to Jay Brinker (Attorney at Law, Cincinnati, Ohio) for bringing this article to my attention.


June 21, 2018 in Current Events, Estate Administration, Estate Planning - Generally, Music, New Cases, Trusts | Permalink | Comments (0)

An Inheritance Damaged by Delayed Property Taxes [Massachusetts]

SharonMassachusetts lawmakers created a property tax deferral program for seniors 45 years ago, and according to the Center for Retirement Research at Boston College, only about 1,000 seniors across the state participate. The program allows senior to defer payment of their property tax until they pass away, leaving the burden to their heirs or beneficiaries when they inherit the property. Municipalities are allowed to charge up to 8% interest on the deferred tax, but some town opt to not charge any interest at all.

Frances Arntz was 76 in 1989 when she first applied for the tax deferral program for her home, and continued to reapply annually until she was 95 and moved in with her daughter in 2008. Her son Barry then took over the property and began paying the current property taxes every year, but he was never informed about the $50,000 in taxes his mother had deferred. Frances passed away in 2018 and left the house to her son, "free and clear" of any mortgages and liens.

Imagine Barry Arntz's surprise when he found out the tax burden on the home had ballooned to $120,000, including the additional 10 years worth of interest from 2008 to 2018. Arntz claimed that his mother was confused by the term deferral, believing it meant the tax debt was absolved rather than postponed. He also claims that the town of Sharon intentionally did not tell him about the deferred property tax.

See Sean P. Murphy, An Inheritance Damaged by Delayed Property Taxes, Boston Globe, June 18, 2018.

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

June 21, 2018 in Current Events, Estate Planning - Generally, Wills | Permalink | Comments (0)

Lawyer Stole $328,000 from Clients and Firm According to the FBI

FBIAnother estate planning attorney from New York has been arrested last week for allegedly stealing money from clients, but this time also from the firm that he was employed at. Albert Hessberg III, 63, worked at the firm of Barclay Damon from 1981 until he was fired this past March. "The FBI and federal prosecutors in Albany are still investigating Hessberg's alleged thefts that could be in the range of $1 million to $3 million." Hessberg is being charged with mail and wire fraud, and faces up to 20 years in prison and a $250,000 fine if convicted.

Hessberg was the executor for a client only referred to as "A.R." who left an estate of $550,000 when he died in 2007. The assets were to be left in a trust to the client's wife, "C.R.," and then trusts to benefit the couple's children and grandchildren. When "C.R." passed away in 2010, she also had an estate of about $314,000. The FBI claims that there is no evidence that Hessberg ever set up trusts for the couple's children or grandchildren. Hessberg even emailed one of the beneficiaries and claimed, "that distributing the assets was complicated and he needed more time."

See Robert Gavin, Feds: Lawyer Stole $328,000 from Clients, Firm, Times Union, June 14, 2018.

June 21, 2018 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Professional Responsibility, Trusts | Permalink | Comments (0)