Once again, Gerry W. Beyer of the Wills, Trusts & Estates Prof Blog gives us one of the more useful posts out there by listing the “top downloads from December 28, 2006 to February 26, 2007 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.”
The third one (“The Economics of Fiduciary Accountability”) actually sounds the most interesting to me.
Gerry W. Beyer of the Wills, Trusts & Estates Prof Blog posts to an article by Darsi Newman Sirknen (Associate, Woolf, McClane, Bright, Allen & Carpenter, PLLC, Knoxville, Tennessee) entitled Domestic Asset Protection Trusts: What’s the Big Deal?, 8 Transactions 133 (2006).
In my rather comfortable associate bubble I have not been privy to the kind of ire that Mr. Beyer speaks of, though I’m sure its out there, however, Ms. Sirknen seems to be telling us all to relax:
Many authors express outrage that some states now allow wealthy settlors to retain the enjoyment of their property while their creditors go unsatisfied. Some essentially predict the country’s moral downfall due to this horrendous new “trick” up the sleeves of wealth protection planners. But is all the outrage really warranted? One professor has stated, “The treatment of spendthrift trusts can make a nice legal point … but it strains credibility to believe that a change in the law will affect more than a handful of people each year.”
This is something that is routinely ignored by most planners but Joel Schoenmeyer of the Death & Taxes Blog discusses why this often-ignored area requires the same attention as the rest of the plan:
Distribution of someone’s tangible personal property upon their death is tricky business, for a number of reasons:
Unless the decedent left specific instructions for each piece of property, their beneficiaries (usually the children) are going to be in direct competition for items of property. While most Wills call for tangible personal property to be divided “in shares of substantially equal value,” most families don’t want to go to the expense of hiring an appraiser to value such property. As a result, everyone guesses at approximate values, and these guesses may be incorrect. [...]
Clark Allison of the California Estate & Business Law Blog wisely posts to an article in the WSJ (account required) about the recent affordability of term life insurance policies.
The low cost of these policies is a positive thing for estate planners and their clients as the flexibility they provide far exceeds their cost. The increased liquidity they can provide a surviving spouse/descendants can cover any potential need from the expenses of the death itself to paying state or federal estate taxes.
Thanks Clark. This is stuff everyone should know.
I probably shouldn’t be too excited, but we’ve gone international! Someone in the UK, specifically in Farnborough, Hampshire has paid us a visit. The map below is from my Google Analytics page and shows where most of my visitors are coming from:
Stan Rule of Kelowna, British Columbia, CA writes, in his Rule of Law Blog about “Another Joint Tenancy Gone Bad.”
It is amazing how many elderly people who, out of genuine concern for their children, transfer the title of their home to a joint-tenancy with their kids. The ostensible logic underlying the transaction is that, if they have to go into a nursing home, or if something else happens to them, they don’t want to lose their home – they want their kids to have it. Sometimes they just want it to pass to their children outside of probate… I wish it were so simple. The first concern, that of losing the home to either the government or a debt collector trying to recover the cost of unpaid medical care, requires a much broader analysis and the solution is almost always more complicated. The second concern is best accomplished with the use of a Transfer-on-Death Deed (something that is not available in all jurisdictions but is in Ohio — and apparently Nevada also).
Mr. Rule has already written a well-considered article on the same subject (applying Canadian law). His most recent post on the subject is about the recent case of Schoennagel v. Schoennagel and Gateway Automotive, 2006 BCSC 1830 which should serve as a useful scare tactic when all other reason and logic has failed to explain why this planning tool is a bad idea most of the time.
Thanks Stan.
A few days ago the Wills, Trusts & Estates Prof Blog (edited by Professor Gerry W. Beyer posted one of my favorite entries in a long while with an analysis of the will execution seen a the beginning of the last Super Man movie. The blog writes:
The first scene of the movie shows this wealthy woman signing her will which leaves her entire estate to Lex, her husband. In just a few minutes, this scene raises the following will issues:
Fraud (Lex claimed he has “reformed” and it is obvious he did not) Undue influence (Lex kept everyone else out of the room when she signed her will and one of her housekeepers was actually an associate of Lex) Assistance in signing the will (the woman dies before she finished signing the will and Lex “helps” her finish her signature)
How great is that?!
The country’s morbid fascination with this tragic story does not change its sordid, and accordingly fascinating legal underpinnings… Though I loathe to consider myself “just-another-spectator” I nonetheless was driven to post to the analysis of the Will of Vickie Lynn Marshall, aka Anna Nicole Smith by the Wills, Trusts & Estates Prof Blog. Their analysis begins:
Anna executed her will on July 30, 2001 in Los Angeles, California. Eric James Lund prepared Anna’s will. In Article I, Anna states that she has “intentionally omitted to provide for my spouse and other heirs, including future spouses and children and other descendants now living or those hereafter born or adopted” except for Daniel. Anna repeats this request in Article 6.2 when she states, “I have intentionally omitted to provide for any of my heirs.”
…and that is where it gets interesting. Everyone .. is .. talking .. about .. this.
Legacy By Design posts a great primer on the basics of Buy/Sell Agreements.
Alternately referred to as business continuation, shareholder, stock redemption, partnership, or retirement agreements, buy/sells are a necessary succession planning tool.
James Brown’s will is a public record. CNN reports here and now everyone knows he disinherited his partner and youngest child. This is no one’s business but James Brown’s, but he made it a news event because he didn’t create a living trust which, unlike a will, does not become a public record.
This is how Clark Allison of Allison Consulting begins his well-written post, “Another Reason for a Living Trust – Privacy.” Its also a great example of the intrusion allowed by certain legal processes that a trust can avoid.
Privacy isn’t always a principal concern of my clients when deciding to form a trust. Oftentimes its for greater control of the disposition of their assets after their death – the “hand from the grave” – but privacy, or the potential lack of it, should never be ignored when chronicling how your clients want to divide their accumulated wealth at death… These are details that most won’t tell even their children. But they will tell their estate planner and we have a duty to hold their confidence, inviolate, to the greatest extent possible. A trust is usually the best way.
