Monthly Archive for April, 2007

Dr. Atkins Trust Litigation

Published on April 28, 2007 in Trust Administration and Trust Litigation. 0 Comments

Joel A. Schoenmeyer of The Death & Taxes Blog writes here of the litigation surrounding the trust of Dr. Robert Atkins and he does so in his usual insightful and playful style. Well done Joel.

An excerpt:

Bread-hating diet guru Dr. Robert Atkins died in 2003, but his trust lives on, and is now the subject of some juicy (greasy?) litigation. [Yesterday's] Wall Street Journal has the scoop here (registration is required).

After Dr. Atkins’ death, his widow (Veronica) became very depressed. She also had a huge amount of money to deal with, and no bank or trust company acting as adviser. Instead, Ms. Atkins turned to three individuals she referred to as “The Three Musketeers” — a “self-described entrepreneur” (yikes!), an accountant, and a lawyer. Mrs. Atkins had the three appointed as trustees of the marital trust created for her benefit, and officers of her husband’s foundation. She also…

agreed to pay each of the men $1.2 million per year, including some money out of her own pocket (since their salaries “exceeded statutory limits on trustee commissions”);

signed them to 10-year contracts with built-in extensions which the three now claim “made them employees for the rest of her life”; and

allowed each of them to purchase a $5 million life insurance policy on her life, with themselves as beneficiaries.

Is it just me, or does something smell here? Is that a hamburger fried in bacon grease, hold the bun, or something else? Something rotten smelling?

I have some messy trust litigation right now but this is almost too much.
Continue reading ‘Dr. Atkins Trust Litigation’

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The Ohio Trust Code Analysis

Published on April 28, 2007 in Estate Planning. 0 Comments

Alan Newman (Associate Professor of Law, University of Akron School of Law) has recently posted his article entitled An Analysis of the New Ohio Trust Code on SSRN.

Here is the abstract of his article:

The Uniform Trust Code (UTC), which was promulgated in 2000, is the first national codification of the law of trusts. It has been adopted, with modifications, in 19 jurisdictions and is under consideration for adoption in many others. The Ohio Trust Code (OTC), which includes many significant modifications from the UTC, was enacted in June 2006, with an effective date of January 1, 2007.

The OTC is the product of extensive study of the UTC by a joint committee of members of the Estate Planning, Trust, and Probate Law Section of the Ohio State Bar Association and members of the Legal, Legislative, and Regulatory Committee of the Ohio Bankers League. Members of the Ohio Probate Judges Association also participated in the process. Input also was received by the Family Law Section of the Ohio State Bar Association, the Ohio Attorney General’s office, and many lawyers and bankers across the state. It is a comprehensive codification of trust law in Ohio.

This Article examines the OTC, changes it has made to existing Ohio law, changes made to it from the UTC, policy considerations with respect to its enactment, and various issues it raises, and makes recommendations for changes to it by amendment.

Considerable attention is directed to its creditors’ rights provisions. The UTC’s provisions on that subject have been among its most controversial (and played a significant role in its defeat in Colorado and Oklahoma, and in its repeal in Arizona).

The OTC’s creditors’ rights provisions depart significantly from the UTC’s and include innovations (for example, a statutory “wholly discretionary trust” and provisions designed to address issues peculiar to special needs trusts for incapacitated persons who are receiving, or anticipate receiving, public assistance) that have received considerable attention. Among the other provisions of the OTC that depart in significant ways from the UTC that the Article addresses are those on the trustee’s duty to keep beneficiaries informed about the trust and the settlor’s right to modify that duty; the ability of persons interested in a trust to enter into “private settlement agreements;” and the modification and termination of trusts.

Thanks to Gerry Beyer of The Wills, Trusts & Estates Prof Blog for the link.

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Helen Walton’s Will

Published on April 24, 2007 in Estate Planning and Uncategorized. 0 Comments

Today Jim Hopkins of USA Today writes about the Will of Helen Walton, the widow of Wal-Mart founder Sam Walton and the potentially dramatic impact it may have on public education.

Her Wal-Mart stake is worth about $16.4 billion, ranking her No. 29 on the most recent Forbes list of the world’s richest people. She had long planned to leave her stock to the Walton Family Foundation, the family has said.

The foundation, overseen by her children and advisers, is a big backer of public school reforms, including charter schools and private-school vouchers.

Her gift would propel the foundation, which currently ranks 38th in the US, to #2 behind only the Bill & Melinda Gates Foundation.

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Washington State Recognizes Domestic Partnerships

Published on April 22, 2007 in Uncategorized. 0 Comments

Saw this on CNN this morning and, though its slightly off topic for this blog, I think its worth noting:

Seattle.gov has a FAQ that defines domestic partners:

Under the definition provided by Seattle City Ordinance NO.117244, Domestic Partners are two people, both of whom are eighteen years of age or older; neither of whom is married or related by blood in a manner that would bar their marriage in Washington State; who have a relationship of mutual support, caring, and commitment; and are each other’s sole domestic partner.

According to AP, Wash. State OKs Domestic Partnerships, CBS News, April 21, 2007 the following rights are included:

Health-care facility visitation rights.

Ability to grant consent for health care for a partner who is not competent. Health care providers could disclose patient information to the patient’s partner.

Automatic revocation of a domestic partner as the beneficiary for nonprobate assets if the partnership ends.

Automatic revocation of power of attorney granted to a domestic partner if the partnership ends.

Title and rights to cemetery plots and rights of interment.

Right to control disposition of a deceased partner’s remains, including right to make anatomical gifts, authorize autopsies and consent to remove partner’s remains from a cemetery plot.

Inheritance rights when the domestic partner dies without a will.

Administration of an estate if the domestic partner dies without a will or if the named representative declines or is unable to serve.

Making domestic partners beneficiaries of wrongful-death actions. Lawsuits for wrongful death could be brought on behalf of a surviving domestic partner.

Requiring that information recorded on death certificates inlude domestic partnership status.

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Woman’s Search for Her Birth Mother Leads to Share of Jell-O Fortune

Published on April 19, 2007 in Estate Litigation and Estate Planning. 0 Comments

This story has been making the rounds but I couldn’t resist this title not being on my blog.

The beneficiary (as I’m sure she is finally happy to be called) is Elizabeth McNabb who’s 1/3 share is worth about $3.5 million. And according to Law.com she deserves it, having cared for more than 160 emergency-care foster children during her life.

McNabb was the product of an affair and a well-kept family secret. Her father was married to another woman. Shortly after McNabb’s birth and adoption, her mother married another man.

McNabb’s great-grandfather, she also learned, was Orator Francis Woodward, a Leroy, N.Y., entrepreneur who purchased a business making a flavored gelatin known as “Jell-O” from his neighbor for $450 in 1899.

The rest is worth reading for both the law and the facts.

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“Till Death Do Us Part (again)” …

Published on April 19, 2007 in Estate Planning. 0 Comments

… is the funny and apropos title of a recently posted article by Richard E. Barnes of Elliott, Blackburn, Barnes & Gooding, P.C. in Valdosta, Georgia, in Prob. & Prop., March/April 2007, at 34.

Issues such as:

unresolved emotional issues

multiple sets of children

support obligations to a previous spouse or children and antenuptial agreements

substantial age differences in spouses

wealth disparities in spouses

estate tax apportionment

are just some of the special challenges that accompany clients who have been down the isle more than once.

Thanks again to the Wills, Trusts & Estates Prof Blog for posting this originally.

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2010 Will Never Come

Published on April 18, 2007 in Estate Planning. 0 Comments

Anyone who actually believes congress will let the estate tax disappear in 2010 is fooling themselves (and maybe their clients too!) This post by The Florida Probate Litigation Blog references the senate’s approval of an amendment to the Budget Resolution that would extend the 2009 estate tax rate (45%) and exemption ($3.5 million) through 2012.

Originally report here by the North Carolina Estate Planning Blog.

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Per Stirpes vs. Per Capita

Published on April 18, 2007 in Estate Planning. 0 Comments

I once spent 40 minutes on the phone with a client trying to run through, not just the definition of per stirpes and per capita, but the way the use of such terms would play out in the client’s estate plan. I wish I could have just referred him to Joel’s post.

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Private Letter Ruling 200709010 and The Automatic Allocation of GST Exemption

Published on April 18, 2007 in Estate Planning. 0 Comments

A boring title for a post but an interesting PLR. I first saw it posted on the Colorado Estate Planning Blog by Kreig Mitchell (who really appears to know his stuff).

Private Letter Ruling 200709010 addresses the situation where an estate planning client creates an estate plan intending to use their $1 million generation skipping transfer tax exemption, but then continues to make post-December 31, 2000 transfers to their irrevocable trust which benefits certain â€œskip persons.â€

However, the transfers to this particular type of irrev. trust are â€œindirect transfersâ€ that automatically use up the clientâ€™s GST tax exclusion amount if the client does not elect out of the automatic allocation. This election has to be made by the client by filing an â€œelection outâ€ statement to their Form 709 Federal Gift Tax Return for the year in which the gift is completed.

Mr. Mitchell wisely notes:

“If the estate planning client does not make this automatic allocation election, then the estate planning client may not have a sufficiently large generation skipping transfer tax exemption upon his or her demise, as may be required by the estate planning clientâ€™s estate planning documents.

Luckily the IRS, as is the case in this private letter ruling, is generally willing to allow estate planning clients to make this election by submitting a private letter ruling request prior to the IRS discovering the issue.”

Thanks Kreig!

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Shloss v. Estate of James Joyce: Settlement

Published on April 18, 2007 in Estate Litigation. 0 Comments

Its a fair use case but its an interesting one… And I can post it here because they sued an estate.

Stanford Law School’s Center For Internet and Society previously reported:

Last June we sued the Estate of James Joyce to establish the right of Stanford Professor Carol Shloss to use copyrighted materials in connection with her scholarly biography of Lucia Joyce. Shloss suffered more than ten years of threats and intimidation by Stephen James Joyce, who purported to prohibit her from quoting from anything that James or Lucia Joyce ever wrote for any purpose. As a result of these threats, significant portions of source material were deleted from Shloss’s book, Lucia Joyce: To Dance In The Wake.

In the lawsuits we filed against the Estate and against Stephen Joyce individually, we asked the Court to remove the threat of liability by declaring Shloss’s right to publish those deleted materials on a website designed to supplement the book. After the trying to have the case dismissed for lack of subject matter jurisdiction, the Estate gave up the fight. Joyce and the Estate have now entered into a settlement agreement enforceable by the Court that prohibits them from enforcing any of their copyrights against Shloss in connection with the publication of the supplement, whether in electronic or printed form.

They want fees too!

(Thanks to Lawrence Lessig for the post)

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