Wills, Trusts & Estates Prof Blog

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

Friday, July 29, 2016

Article on Appropriate Scope of Contractibility with Fiduciary Loyalty

Fiduciary loyaltyAmir N. Licht recently published an Article entitled, Motivation, Information, Negotiation: Why Fiduciary Accountability Cannot Be Negotiable, D. Gordon Smith & Andrew S. Gold, eds., Research Handbook on Fiduciary Law (Forthcoming). Provided below is an abstract of the Article:

In the debate over contractual freedom or enabling-versus-mandatory rules in fiduciary law, those who do not adhere to an unbridled contractatian approach tend to justify fiduciary law’s strict posture by appealing to transaction cost reasoning. In this view, fiduciary law more efficiently sets rules that the parties would adopt or, also efficiently, sets penalty default rules that they would not adopt. Drawing on new institutional economics and information economics, this paper advances another theory on the appropriate scope of contractibility with regard to fiduciary loyalty. The present account highlights information asymmetries that are more tenacious than those stemming from information production costs - to wit, asymmetries due to unobservable and unverifiable information. These asymmetries provide a compelling justification for a strict, full-disclosure-based accountability regime. A similar analysis vindicates a rather similar legal policy in traditional insurance law, in which insurance relations are based on utmost good faith and impose a duty of full disclosure on the insured.

July 29, 2016 in Articles, Professional Responsibility | Permalink | Comments (0)

Transfer of Foreign Money to the U.S.

Wealthy foreignerWhat do you do if you are a wealthy multinational planning for part of your estate to go to the United States? One idea is to create a foreign grantor trust that receives tax benefits for the grantee. The trust will grow tax-free and any distributions made to beneficiaries will be tax-free as well. With the obsession of minimizing income tax, the United States is becoming the place to stash foreign wealth. This makes income tax management the key to most estate planning today. Additionally, estate planners are playing around with basis as a tax reduction technique through inheritance. Ultimately, there should be a three-part harmony: first, structure the trust properly; second, a thoughtful use of entities to compose the trust structure; and third, proper asset allocation.

See Carol J. Clouse, Death and Taxes for Wealthy Foreigners, Private Wealth, June 17, 2016.

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

July 29, 2016 in Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0)

Trustees with Special Skills

Special skill trusteeIf you are a trustee with a special skill, you are expected to use it. For example, if you are a lawyer or a CPA, you have a higher degree of knowledge on certain issues, and you are expected to use those professional skills. Commonly, we see these professionals acting as trustees, and if something were to go wrong within that role, the trustee will be judged on a higher standard than an ordinary trustee. To have the benefit of these specialists, however, can really help in trust administration. To help protect a skilled trustee, it is important to have a process in place on how to manage trust assets and make decisions for the trust.

See California Trust and Probate Litigation, A Trustee’s Duty to Use Special Skill, Wealth Management, July 26, 2016.

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

July 29, 2016 in Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Article on Framework of Charitable Trust in Common Law

Charitable trustOonagh B. Breen recently published an Article entitled, Guardians of the Charitable Realm: Charitable Trust Supervision Practice and Procedure in the Common Law World, European R. Private L. (Forthcoming); UCD Working Papers in Law, Criminology & Socio-legal Studies Research Paper No. 11/2016. Provided below is an abstract of the Article:

This article examines the control framework for the supervision and oversight of charitable trusts in the common law world. It outlines the fundamental differences between private and public trusts that necessitate a separate enforcement regime for charitable trusts and explores the historical and political powers and duties of the Attorney General as parens patriae of charities. In light of the limitations of the Attorney General’s effective scrutiny, Part II considers the emergence of alternative charity regulators - from tax authorities to independent charity commissions - comparing the relative regulatory achievements of these agencies with that of the AG. Part III turns its attention to the role of the courts and tribunals in the enforcement of the interests of donors, beneficiaries and charitable entities. The article concludes in Part IV with a discussion of the merits and demerits of the charitable trust vis-à-vis the public benefit foundation.

July 29, 2016 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Thursday, July 28, 2016

Life Settlements as Part of Your Estate Plan

Life settlementsEstate planning attorneys often deal with life insurance policies that are no longer relevant, so life settlements are steadily gaining recognition. These estate planning attorneys have three priorities relating to life settlements: be confident with the market’s stability, acquire a better understanding of specific planning scenarios that will benefit your client, and avoid disappointing clients by setting realistic expectations.

For the first priority, the secondary market for life insurance is an increasing avenue for policy sellers trying to optimize the cash value of their unwanted life insurance policies. This market continues to gain recognition as it benefits customers who own static insurance assets. For the second priority, life insurance policies slowly become irrelevant to older clients’ estate plans. Consequently, estate planning attorneys will need to weigh their options and come up with the best solution for each individual client. Finally, for discussing life settlement options, attorneys will need to set realistic expectations for incorporating life settlements into a client’s estate plan because they can often be of great benefit.

See Jeff Hallman & Scott Thomas, Facilitating Life Settlements, Wealth Management, July 25, 2016.

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

July 28, 2016 in Estate Planning - Generally | Permalink | Comments (0)

How to Protect Your Assets When Getting Remarried

RemarriedThe biggest estate-planning question when getting remarried is, how do I reconcile preserving assets for my children from a previous marriage while still taking care of my commitment to my new spouse? Usually, heirs fear the new spouse because most all states give rights to a spouse to take some part of the decedent spouse’s estate. An ex-spouse could also still hold they key to certain assets if your estate-planning documents are not up to date before passing. Therefore, consider updating your estate-planning documents, including provisions about your new spouse as executor, the holding of assets individually or jointly, your new spouse on deeds, and specific bequeaths to children from previous marriages. Additionally, there are some common estate-planning mistakes after remarrying that you should avoid, such as no prenuptial, no verbal instructions to loved ones, and no planning for long-term care.

See Deborah Nason, Getting Remarried? Protect Your Assets and Your Interests, CNBC, July 28, 2016.

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

July 28, 2016 in Estate Administration, Estate Planning - Generally, Estate Tax, Trusts, Wills | Permalink | Comments (0)

Article on an Interview About the History of Trusts & Estates Law

Trusts and estate lawBridget J. Crawford recently published an Article entitled, On Perpetuities, Paradigms, and a Creative Life in the Law, 152 Tax Notes, No.289 (2016). Provided below is an abstract of the Article:

In this interview with Professor Bridget Crawford, retired estate planning attorney Jonathan Blattmachr discusses a variety of compelling (and not uncontroversial) topics including estate planning paradigms, asset protection trusts, community property and the repeal of the rule against perpetuities. Mr. Blattmachr played a key role in drafting the Alaska Trust Act (1997) and the ultimate adoption of consensual community property in Alaska. This interview serves as an important primary source for anyone interested in the evolution of American trusts and estates law over the last 20 years. Mr. Blattmachr details the origins of his interest in trust law reform, highlights from his career, and how conventional ways of thinking thwart legal innovation.

July 28, 2016 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Questionare to Help Identify Those at Risk for Alzheimer's

Alzheimers3A group of neuropsychiatrists and other experts introduced a 34-quetstion checklist to help identify those at a greater risk for Alzheimer’s. The questions are grouped into domains, including areas like interest, motivation, and drive; mood or anxiety symptoms; ability to delay gratification and control behavior; following social norms; and strongly held beliefs.

See Draft Checklist on Mild Behavioral Impairment, NY Times, July 25, 2016.

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

July 28, 2016 in Current Events, Elder Law | Permalink | Comments (0)

Wednesday, July 27, 2016

Alzheimer's Effect on Women v. Men

Alzheimers2Historically, statistics show that Alzheimer’s Disease effects women way more often than men—nearly two thirds of those suffering from the disease are women. It has long been the theory that women live longer and therefore have more time to develop the illness. An annual Alzheimer’s conference, however, has created a different theory for this uneven statistic, reporting that fewer men are being accurately diagnosed and that physicians should pay more attention to younger patients.

Looking at one state’s brain bank, of the brains that were affected by Alzheimer’s, 51% were men and 49% women. Women are often diagnosed at older ages and have more typical symptoms compared to men who are normally younger when the disease strikes and have atypical symptoms. Another factor affecting historical research is how the disease affects women’s brain differently than men’s, often attacking the hippocampus and cortex respectively. The conference also reported several other visible risk factor differences between men and women.

See Tara Bahrampour, Men May Get Alzheimer’s as Much as Women; We Just Haven’t Known How to Spot It, Washington Post, July 26, 2016.

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

July 27, 2016 in Current Events, Elder Law | Permalink | Comments (0)

Article on Sexual Advance Directives

Legal capacity to consentAlexander A. Boni-Saenz recently published an Article entitled, Sexual Advance Directives, 68 Ala. L. Rev. (2016 Forthcoming). Provided below is an abstract of the Article:

Can one consent to sex in advance? Scholars have neglected the temporal dimension of sexual consent, and this theoretical gap has significant practical implications. With the aging of the population, more and more people will be living for extended periods of time with cognitive impairments that deprive them of the legal capacity to consent to sex. However, they may still manifest sexual desire, so consenting prospectively to sex in this context serves several purposes. These include protecting long-term sexual partners from prosecution by the state, ensuring sexually fulfilled lives for their future disabled selves, or preserving important sexual identities or relationships. The law currently provides a device for prospective decision-making in the face of incapacity: the advance directive. The central claim of this article is that the law should recognize sexual advance directives. In other words, people facing both chronic conditions that threaten their legal capacity to make decisions and institutional care that threatens sexual self-determination should be able to consent prospectively to sex or empower an agent to make decisions about sex on their behalf. To justify this claim, the Article introduces a novel theory of sexual consent — the consensus of consents — that diffuses the longstanding philosophical debates over whether advance directives should be legally enforceable. With this normative foundation, the Article then draws on insights from criminal law, fiduciary law, and the law of wills to fashion a workable regime of sexual advance directives that adequately protects individuals from the risk of sexual abuse.

July 27, 2016 in Articles, Elder Law | Permalink | Comments (0)