Source: https://lawprofessors.typepad.com/trusts_estates_prof/2005/12/index.html
Timestamp: 2019-04-22 22:27:03+00:00

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Justice Scalia was the funniest justice, at 77 "laughing episodes." On average, he was good for slightly more than one laugh - 1.027, to be precise - per argument.
The simple notation "[laughter]" does not, moreover, distinguish between "a series of small chuckles" and "a joke that brought the house down." Nor, Professor Wexler said, does it separate "the genuine laughter brought about by truly funny or clever humor and the anxious kind of laughter that arises when one feels nervous or uncomfortable or just plain scared for the nation's future."
For many years the Internal Revenue Service has sought to defeat the use of family limited partnerships and family limited liability companies (family holding companies) to achieve valuation discounts for transfer tax purposes. In this effort the Service has employed numerous theories and strategies, with varying success. This commentary considers the most recent theory advanced by the Service - that assets transferred to a family holding company are includible in the decedent's estate, at their full, undiscounted value, under section 2036 of the Internal Revenue Code. This commentary provides a simple roadmap to the government's position on this issue, as articulated in several recent cases. The purpose of the commentary is not to discuss these cases in detail, but rather to explain the government's position in general terms, with the goal of assisting practitioners in structuring transactions to avoid the problems identified.
In a complex securities fraud case, the Supreme Court of Texas addressed the propriety of a jury instruction regarding breach of fiduciary duty under former Trust Code § 113.059 [see now Trust Code § 111.0035].
The instruction failed to reflect the possibility that the standard of care may be modified by agreement. Because the instruction did not account for contractual modifications, the court determined it was overly broad and consequently defective.
Sterling Trust Co. v. Adderley, 168 S.W.3d 835 (Tex. 2005).
Earlier on this blog, here, here, here, and here, I have been reporting on the case of Lillian Glasser and the battle to control her and her $25 million fortune.
Calling the dispute a "legal fratricide" between sibling rivals that has consumed millions of dollars in attorneys' fees, Biery's order said "the end result ... is the creation of a Glasser chess game in which Mrs. Glasser has become a pawn."
His ruling sends parts of the case back to Bexar County Probate Court where a trial will be held over who should become the guardian of Glasser and her $25 million estate. But because the principal parties come from three states, Biery kept control over other issues.
The following is a summary of the recent Texas case of Ayers v. Mitchell, 167 S.W.3d 924 (Tex. App.—Texarkana 2005, no pet. h.).
Mother, Father, Daughter, and Son opened a joint bank account consisting of funds contributed by Mother and Father. Over time, Daughter obtained sole control over these funds and refused to return them to Father after Mother’s death. The trial court determined that Mother and Father had created an irrevocable oral trust with Daughter as the trustee and thus agreed with Daughter that Father could not regain the funds. The appellate court reversed.
The court began its analysis with Texas Property Code § 112.004 which provides that a trust must be in writing unless it satisfies the oral trust exception for personal property. For an oral trust of personal property to be enforceable, there must be a transfer of trust property to a trustee who is neither the settlor nor a beneficiary provided the transferor expresses trust intent either at or before the time of the transfer. The court reviewed the facts and determined that Father had not made a completed transfer of the bank account funds and thus no trust existed even though Father had expressed the requisite trust intent.
The court recognized that the Texas Trust Code does not define the term “transfer.” After examining cases dealing with the ownership of funds in multiple-party accounts, the court held that a transfer “must divest the [settlor] of all dominion and control over the trust res.” Ayers at 929. Father did not transfer the funds because he remained on the account and thus had the right to make withdrawals at any time. In addition, there was evidence of several occasions where Father directed the use of the funds in the account.
Note: In dicta, the court explained that even if Father had created a trust, it would have been revocable and the evidence established its revocation. For example, Father’s filing this lawsuit and asking for his money would have revoked any trust that he may have created.
Moral: All trusts should be in writing and the writing should clearly express the settlor’s intent.
This article is directed to all of those audiences, with the goal of informing them about the principal features of the legislation and its implications for their practices. In doing so, the article will identify most of the relatively small number of differences between the Virginia UTC and the official text of the UTC as adopted by the National Conference of Commissioners on Uniform State Laws ("NCCUSL").
Part II of the article begins with a summary of the reasons for adopting the UTC, both generally and in Virginia in particular. Part II then provides an overview of the development of the UTC leading up to its adoption by NCCUSL in 2000. Part II then describes the process leading to enactment of the UTC by the General Assembly. Part II also discusses the role of the official NCCUSL Comments in understanding and interpreting the Virginia UTC.
Part III of the article provides an overview of the Virginia UTC. It begins by describing the scope of the Virginia UTC, which applies exclusively to express trusts or trusts required to be administered as express trusts. Part III then describes the manner in which the statute implements the principle of effecting the express intent of the settlor. Part III also describes the few instances in which the terms of a trust instrument cannot override the rules set forth in the statute. Part III further describes the extent to which the common law and principles of equity will continue to govern certain matters concerning the administration of trusts. Part III then describes the function of each of the principal subdivisions of the statute and explains the principal ways in which the Virginia UTC varies from the original.
Part IV provides a detailed discussion of several key concepts utilized in the Virginia UTC, specifically the concepts of "knowledge," "qualified beneficiaries," and "representation," each of which plays a significant role in resolving matters of trust administration.
This discussion is followed by Part V, in which the article examines the numerous ways in which the Virginia UTC facilitates trust administration without judicial intervention.
In Part VI, the article examines several key substantive elements of the Virginia UTC, including the rules concerning judicial modification of trusts, rules governing the liability of trustees, and rules governing the rights of creditors of trust beneficiaries.
Finally, Part VII of the article offers some concluding remarks.
Earlier on this blog, here, here, and here, I have been reporting on the case of Lillian Glasser and the battle to control her and her $25 million fortune.
The case is now receiving national attention triggered by a story which appears in today's New York Times.
[T]he case highlights the checkerboard practices of local probate courts, which govern the transfer of property from people who die or are declared incompetent. The courts are not federally regulated, but in response to a growing number of interstate disputes, the National Conference of Commissioners on Uniform State Laws is drafting nationwide probate standards similar to those in the field of child custody.
Some states require residency, known as domicile, for a probate court to have jurisdiction. Other states, including Texas, require only physical presence. Experts say the lack of uniformity can be exploited by parties seeking legal venues where they enjoy an advantage.
Ralph Blumenthal, A Family Feud Sheds Light on Differences in Probate Practices From State to State, NY Times, Dec. 28, 2005.
Earlier on this blog, here and here, I have been reporting on the case of Lillian Glasser and the battle to control her and her $25 million fortune.
Stuck in San Antonio for the past 10 months as the central figure in a complex and contentious family probate battle, Lillian Glasser, a wealthy 85-year-old widow from New Jersey, is despairing of ever going home.
"I can't take it anymore. I'm afraid I'll never live to see New Jersey again. I think that's going to be the end of it, that I'll never make it back," Glasser said last week. "I never did anything. I'm the victim of a bunch of nuts."
According to Glasser's lawyer, friends and family members who speak to her regularly, her mood is becoming increasingly morbid and pessimistic. To one, she remarked bitterly that the only way she'll leave Texas is in a box.
"She is in essence, walking her last mile. She's in a desperate state here. If she doesn't get out of Texas, the woman is going to give up," said Karen Pena, Glasser's court-appointed lawyer in San Antonio.
John MacCormack, Hopeless holiday for courts' captive, San Antonio Express-News, Dec. 26, 2005.
Earlier on this blog, I reported on the case of Lillian Glasser and the battle to control her and her $25 million fortune. The posting, based on a newspaper article, painted a grim picture that Lillian was being held hostage and psychologically tortured.
You should be aware that Mrs. Glasser designated her daughter to serve as her agent at a time that Mrs. Glasser had capacity. She was represented by a well respected New Jersey lawyer who is a Fellow of the American College of Trust and Estate Counsel and the power was properly witnessed. The power of attorney was durable and when the treating physician certified Mrs. Glasser's lack of capacity, it was activated as it was a springing power.
Mrs. Glasser is now severely demented and although her daughter has accounted for all of her funds to the son, the court appointed attorneys and Judge Spencer, Mrs. Glasser's son has filed what he admits is a pre death will contest alleging that his rights have been tortiously interfered with as they pertain to his mother. Despite the fact that Texas does not allow pre death will contests, this dispute has lingered on under the guise that Mrs. Glasser wants to go "home". Mrs. Glasser's memory of "home" was when her husband and parents were alive which is no longer the case. When she got to New Jersey on her last visit, she requested to return to San Antonio. As you are aware, it is unfortunate that people who have dementia have little insight to the fact they lack the judgment or ability to make decisions where to live. She is not oriented to time and sometimes lives in the past. She is functioning on the intellectual equivalent of a young child per one of her treating physicians.
Mrs. Glasser resides in a lovely high-rise in San Antonio with round the clock care. She goes to her country club, gets massages, physical therapy and has regular visitors. She has a home in New Jersey and Florida and her grandchildren reside in San Antonio. Unfortunately, she no longer has the judgment or the ability to make decisions about her health and well being.
I think the record needs to be clear that Mrs. Glasser and her husband (who also had a power of attorney) both took the necessary steps to avoid the dispute that now exists. I also think it is important to point out to the professors who read your blog that more and more, guardianship proceedings are being utilized as pre death will contests. Perhaps a no contest clause should be put in a power of attorney for those jurisdictions who recognize the validity of such clauses or an arbitration clause should be incorporated into a power of attorney so individuals private lives do not become a source of newspaper articles and blogs. Even when agents are carefully selected, disgruntled relatives can still file litigation.
In a student note, J.M. Robinette discusses the case of Edmundson v. Estate of Fountain, No. 03-1459, 2004 WL 1475423, Ark. July 1, 2004. Wills -- Holographic Wills and Testamentary Intent -- Extrinsic Evidence is Inadmissible to Prove Testamentary Intent for Holographic Wills Lacking Words of Disposition, 27 U. Ark. Little Rock L. Rev. 545 (2005).
Few civil matters are as controversial as will disputes. These cases often pit family member against family member for recognition of their claim to the estate of a deceased loved one. Unlike formal wills in which ceremonial formalities prove the intention of the testator, when confronted with a holographic will the survivors of the deceased may question the intent of the document. One commentator observed that the majority of holographic wills were forgeries. Due to these concerns, holographic wills have great potential to incite disputes over the deceased's estate. Notwithstanding the potential for controversy, the holographic will survives as an inexpensive means for citizens to avoid intestacy. In fact, provisions for holographic wills are in both the Uniform Probate Code and the Restatement (Third) of Property.
This note will explore the controversy over testamentary intent in holographic wills brought about by the recent Arkansas Supreme Court decision Edmundson v. Estate of Fountain. Section II of this note will provide both the background facts of the case and the reasoning of the Arkansas Court of Appeals. After that, Section III will explore the historical background of the law of holographic wills, the early law in Arkansas and the development of the testamentary intent requirement, and the development of Arkansas law regarding the proof of testamentary intent. Next, Section IV will trace the reasoning of the Arkansas Supreme Court's majority and dissenting opinions in Edmundson. Finally, Section V will comment on the state of the law regarding both admission of extrinsic evidence to prove testamentary intent and the substantive facial requirements for a valid holographic will.

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