Keeping Current—Probate

Keeping Current—Probate offers a look at selected recent cases, tax rulings and regulations, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.

Keeping Current—Probate Editor: Prof. Gerry W. Beyer, Texas Tech University School of Law, Lubbock, TX 79409; gwb@ ProfessorBeyer.com. Contributors: Julia Koert, Paula Moore, Prof. William P. LaPiana, and Jake W. Villanueva.

Cases

JURISDICTION: Courts in state of probate administration have personal jurisdiction over out-of-state attorneys. The decedent and his spouse retained an Illinois law firm to draft their wills and update their estate plan. The will and other documents stated that the decedent’s domicile was in Florida. After the decedent’s death, the will was admitted to probate in Florida, and, eventually, the successor executor filed a malpractice suit against the firm in a Florida court. The trial court denied the firm’s motion to dismiss for lack of personal jurisdiction, and the intermediate appellate court affirmed in Neal, Gerber & Eisenberg LLP v. Lamb-Ferrara, 388 So. 3d 1112 (Fla. Dist. Ct. App. 2024). The court found that Florida’s long-arm statute, Fla. Stat. § 489.193, was satisfied because even though the Illinois firm made no appearance in the Florida proceeding and had no physical presence in the state, the estate’s Florida counsel took direction from the Illinois firm that prepared most of the filings and reviewed those created by Florida counsel, with which it exchanged hundreds of emails. The nature of work done by Illinois firm also satisfies the minimum contacts requirement of the constitutional test for due process.

PRIVILEGE: Physician-patient privilege yields to probate contest. Colorado law gives physicians, surgeons, and registered nurses an absolute privilege with respect to patient information. Colo. Rev. Stat. § 13-90-107(d) (1). In a case involving a will contest in which one of the contestants sought the testator’s medical records, the Colorado Supreme Court held in In re Estate of Ashworth, 549 P.3d 1003 (Colo. 2024), that the physician-patient privilege survives the death of the patient for the same reason the attorney-client privilege survives the death of the client: to promote candor in giving advice. A testamentary exception applies to both privileges, however, to promote the settlement and administration of the decedent’s estate in accordance with the decedent’s testamentary intent.

TRUSTS: Amendment of revocable trust by agent is void. After the settlor became incapacitated, the settlor’s nephew as agent amended the settlor’s revocable trust to remove charitable beneficiaries and substitute himself. The District of Columbia Court of Appeals in Garner v. University of Texas at Austin, 317 A.3d 333 (D.C. 2024), affirmed the trial court’s invalidation of the amendment, holding that there was no evidence the agent acted in accordance with the common law duty to act in good faith and to carry out the principal’s intent and if intent is unknown, to act in the principal’s best interest. In addition, the broad exculpatory provision in the power of attorney stating that no action taken by the agent can be considered self-dealing or a violation of fiduciary duty does not relieve the agent of the duty to act in accordance with the common law duty.

TRUSTS: Creditor can levy on property held in revocable trust to satisfy debt of one of two co-settlors. A creditor sought a judgment lien on the debtor’s home held in a revocable trust created by the debtor and the debtor’s spouse, of which both were also cotrustees and beneficiaries. Both had the power to “jointly or individually” revoke the trust or to withdraw any property from it. The Indiana intermediate appellate court in Sumrall v. LeSEA, Inc., 234 N.E.3d 230 (Ind. Ct. App. 2024), affirmed the grant of the lien, holding that the debtor’s power to withdraw all the trust property meant that lack of notice to the spouse as cosettlor and co-trustee did not violate the spouse’s due process rights.

TRUSTS: Emails are not trust amendments. The successor trustee of the decedent’s revocable trust petitioned to have emails exchanged between the decedent, the successor trustee, and the decedent’s attorney, and the client questionnaire completed by the decedent recognized as amending the trust. The trust required amendment by a writing signed by the settlor and delivered to the trustee. In Trotter v. Van Dyck, 322 Cal. Rptr. 3d 622 (Cal. Ct. App. 2024), the California intermediate appellate court affirmed the denial of the petition because amending the trust is not a “transaction” to which the California enactment of the Uniform Electronic Transactions Act (Cal. Civ. Code § 1633.3) applies. In addition, the emails and questionnaire did not express the intent to amend the trust but rather showed the intent that any amendment be carried out by documents to be prepared by the attorney.

TRUSTS: Funding of revocable trust is a conveyance. The decedent executed a revocable trust, the terms of which assigned to the trustee the property listed on “Schedule A.” The sole item on Schedule A was the decedent’s homestead. After the decedent’s death, the trust was recorded. An heir of the decedent petitioned to quiet title to the property on the theory that the property had never left the probate estate. The trial court found in favor of the trustee; the heir appealed, and the Florida intermediate appellate court affirmed in Fuentes v. Link, 394 So.3d 684 (Fla. Dist. Ct. App. 2024). Florida law requires both deeds and most revocable trusts to be signed before two witnesses in the same fashion as a will. Fla. Stat. § 689.01(1) (deeds); Fla. Stat. § 736.0403(2)(b) (trusts). Florida law does not require a deed to be in any particular form. The trust instrument was, therefore, a valid conveyance, and the trust terms, which required the trustee to manage the trust property and distribute it on the decedent’s death, were sufficient to show delivery of the deed.

TRUSTS: Trust terms prevent amendment by agent. The settlor’s agent amended the settler’s revocable trust to make it irrevocable and thus “lock in” the agent’s interest in the trust. The trust terms permit the settlor’s agent to exercise “any right or power” on the settlor’s behalf other than to amend the trust by will or to exercise “any right or power that would constitute a general power of appointment if held” by the settlor’s agent. In Kosmann, Trustee v. Brown, 903 S.E.2d 567 (Va. Ct. App. 2024), the Virginia intermediate appellate court affirmed the invalidation of the amendment because the statutory definitions of “power of appointment,” Va. Code § 64.2-701, and of “presently exercisable general power of appointment,” Va. Code § 62.2-1600, include the exercise of the power to amend to benefit the person making the amendment.

UNDUE INFLUENCE: Only preponderance of the evidence is needed to support finding of undue influence. In Traylor v. Kraft, 552 P.3d 351 (Wyo. 2024), the Wyoming Supreme Court clarified the law of undue influence, holding that the case law requiring “clear proof” or evidence “clearly demonstrating undue influence” does not elevate the burden of proof from preponderance to clear and convincing.

TAX CASES, RULINGS, AND REGULATIONS

TRUST: Late small business election allowed. A trust owned shares of an S corporation. The trust was owned entirely by an individual until that individual died. The trustee inadvertently failed to make the electing small business trust designation. As a result, the S corporation election terminated. PLR 202438011 determined that because the termination of the S corporation election was inadvertent and not motivated by tax avoidance or retroactive tax planning, the corporation will continue to be treated as an S corporation so long as the trustee files the proper election within 120 days of the letter.

Literature

CONNECTICUT—REAPPEARANCE OF THE PRESUMED DEAD: Juliana Greco points out that it is not uncommon for people to vanish without a confirmed death in “The Living Dead: A Proposed Connecticut Statute for Handling Missing Persons and the Consequences of Reappearance,” 37 Quinnipiac Prob. L.J. 365 (2024). When these presumed dead individuals reappear, however, significant legal complications result. Connecticut’s current laws are unclear in such situations. Therefore, Greco compares Connecticut’s statute with those of Pennsylvania and New York, suggesting that Connecticut should consider adopting more comprehensive laws to declare someone deceased and distribute their estate legally.

CONSERVATION EASEMENTS:

In Birdies, Bogeys, and Bogus Deductions: An Argument for a Simpler Approach to Conservation Easement Valuations, 59 Wake Forest L. Rev. 537 (2024), Allison Lizotte investigates how wealthy golf course owners have used conservation easement deductions to lower their taxes. The IRS has faced difficulty regulating these deductions, resulting in an unfair advantage for wealthy individuals. Lizotte advocates for a more straightforward valuation method to ensure a fairer tax system.

CY PRES: In Confusing Cy Pres, 58 Ga. L. Rev. 17 (2023), Ryan Christopher examines how American courts have used cy pres and equitable deviation to extend the life of a charitable trust. In this empirical study of American court cases, Christopher identifies factors influencing judges’ accurate or inaccurate use of these doctrines. Further, the findings from this empirical study may help clarify the doctrine, promote charitable trust-making, and define the roles of judges in shaping trust law.

DATA PROTECTION: In Unraveling the Gordian Knot for Data Trusts—The Next Leap Forward for Equity, 25 Tul. J. Tech. & Intell. Prop. 147 (2023), Kan Jie Marcus Ho explores the growing data governance field. Although governments have tried to make rules to protect people’s data, these rules are insufficient. This article suggests a different approach: using a “data trust” system to give people more power to protect their own data. Additionally, the principles of fiduciary law and the law of trusts could better protect users’ rights regarding their data online. Ho aims to show how these principles can be used to hold online service providers accountable for how they handle user data in both the United States and the United Kingdom.

DEATH DETERMINATION: In Life and Death Matters in Conflict of Laws, 97 Tul. L. Rev. 703 (2023), Alyssa A. DiRusso delves into the intricacies of determining legal death by highlighting the challenges posed by advancements in medical technology and the inconsistencies in state laws. Prof. DiRusso proposes two possible solutions to create a clear and consistent standard for determining death: the domicile rule and the decedent situs rule, ultimately endorsing the latter for its administrative feasibility.

FAMILY FARMS: In his Comment, Cultivating Stability: Property Tax Reforms for Family-Owned Farms and Their Impact on Agriculture’s Future, 16 Est. Plan. & Cmty. Prop. L. J. 545 (2024), Joshua Mendez discusses the uncertain future of the agricultural industry as the average age of farmers approaches 60, which could soon lead to significant turnover in labor and ownership. Family-owned farms, making up nearly 97 percent of all US farms, are vital for food production. Mendez examines the farmers’ challenges during this transition, particularly the inconsistencies in state property tax regulations and exemptions. Finally, Mendez advocates for policies that empower farmers to make their own decisions to enhance stability in this volatile sector.

FIREARMS: Andrew Lisenby points out a conflict between the Gun Control Act of 1968 and property rights in his Comment, Dispossession of Firearms: Caught in the Crossfire of Legal Impossibility, 16 Est. Plan. & Cmty. Prop. L. J. 503 (2024). Although those deemed to have a firearm disability are prohibited from possessing firearms, they still maintain ownership rights in their firearms. This creates a legal dilemma. Lisenby proposes (1) “amending the statute to include a grace period for managing property after gaining a firearms disability and (2) including a rebuttable presumption against possessory interests for future acquisitions of prohibited property,” thereby balancing public safety with constitutional property rights.

ILLINOIS—DURABLE POWERS OF ATTORNEY—ACCEPTANCE: In Behind the Curtain, Ill. B.J., Apr. 2024, at 18, Ed Finkel discusses “[w]hen banks deny access to those with powers of attorney, and what to do about it.”

ILLINOIS—DURABLE POWERS OF ATTORNEY—FIDUCIARY DUTY: Unlike under the law of many states, in Illinois, agents “have a fiduciary relationship with the principal and that fiduciary relationship begins the moment the POA is signed” rather than when the agent begins acting under the POA. In Instant Karma, Ill. B.J., Apr. 2024, at 26, Robert S. Held explains this rule and how attorneys should “exercise caution in advising their clients in naming agents under property powers of attorney.”

LGBTQ+: In First Comes Love: Advocating for a Revival of Pre-Obergefell Estate Planning Vigor for LGBTQ+ Couples and Families, 58 U. Rich. L. Rev. 83 (2024), Kimberly Furtado notes that LGBTQ+ advocacy groups provided valuable estate planning resources before samesex marriage, but these resources diminished after Obergefell. Given the current political climate’s uncertainty about LGBTQ+ rights, including marriage, the community should strengthen its advocacy to ensure equal protection for all LGBTQ+ individuals, including those who choose not to marry.

PERPETUAL TRUSTS: Liam Cronan examines the resurgence of perpetual trusts, which can shield wealth from taxes indefinitely, in And the Heirs of His Trust Corpus: How the Fee Tail and Historical Limitations on Perpetuities Can Inform the Law of Perpetual Trusts, 103 B.U. L. Rev. 659 (2023). He compares these trusts to historical perpetuities and explores potential solutions, such as new statutes or reinterpretations of existing trust laws.

SUCCESSION PLANNING: In Succession Planning and the Approaching Massive Transfer of Wealth, 103 Mich. B.J. 24 (2024), Gerard Mantese and Ian Williamson explore how the massive transfer of wealth in the United States has increased the importance of succession planning for business owners. This article discusses key contract clauses, relevant case law, tax considerations, and estate planning strategies for successful succession planning. They emphasize the importance of careful planning to ensure a smooth transition of ownership.

TEXAS—DECANTING: Jeffrey Chadwick explores how decanting has grown in popularity since Texas adopted a decanting statute in 2013 in A DecadePlus of Trust Decanting in Texas, 16 Est. Plan. & Cmty. Prop. L. J. 351 (2024). Decanting has become essential in every estate planner’s toolbox to modify an irrevocable trust. As the law evolves and improves, Chadwick reminds readers that decanting is just one option among several alternatives, such as trust combinations, divisions, and judicial modifications. If decanting is the best option, trustees must ensure compliance with Texas law and avoid any adverse tax consequences.

TEXAS—REPRESENTING

SPOUSES: In When Estate Planning Met Marital Property Law, 16 Est. Plan. & Cmty. Prop. L. J. 404 (2024), Brian Corove highlights critical examples of the intersection between estate planning and marital property law, offering guidance to avoid unintended consequences.

TEXAS—SLAYERS: In If You Kill Your Honey, Don’t Expect the Money: The Rights of a Killer in Texas to Share in His Victim’s Estate, 16 Est. Plan. & Cmty. Prop. L. J. 431 (2024), Gus Tamborello explores the story of Ross Lawrence, who, while suffering from severe mental illness, killed his parents with a sledgehammer in what he claimed was a “mercy killing.” Ross was found incompetent to stand trial due to schizophrenia, leading to delays in both criminal and civil cases as relatives sought to prevent him from inheriting his parents’ estate. Texas law requires a finding of both willful and wrongful conduct when determining whether a slayer should be denied inheritance. Thus, it remains uncertain whether he will benefit from the funds while still deemed incompetent.

TEXAS—SURROGATE DECISION

MAKERS: In her Comment, Keeping Surrogate Decision Makers out of the Court: A Proposed Amendment to Texas Health and Safety Code Sections 313.004 & 166.039, 16 Est. Plan. & Cmty. Prop. L. J. 465 (2024), Sarah Kronenberger explains that when equal-priority surrogate decision-makers disagree on medical decisions for an incapacitated person, the only remedy is judicial intervention. This is neither practical nor ethical in urgent situations. Instead, Kronenberger suggests amending the Texas Health and Safety Code §§ 313.004 and 166.039 to provide a more efficient solution.

WYOMING—EXPERIENTIAL

ESTATE PLANNING: In The Importance of Experiential Estate Planning: Preparing the Next Generation of Lawyers and Serving Wyoming, 47 Wyo. Law. 24 (2024), Emily Harmon examines the growth of the University of Wyoming College of Law’s Estate Planning Practicum. This law school clinic provides free estate planning and probate services to those in need while offering law students valuable hands-on experience.

Legislation

CALIFORNIA permits a trustee to terminate a trust if the fair market value of the principal of the trust does not exceed $100,000, an increase from the $50,000 threshold under prior law. 2024 Cal. Legis. Serv. ch. 76.

CALIFORNIA provides remedies for deepfakes and other unauthorized use of a personality’s name, voice, signature, photograph, or likeness. 2024 Cal. Legis. Serv. ch. 258.

ILLINOIS restricts the creation and distribution of deepfake identities and digital replicas without authorization. 2024 Ill. Legis. Serv. P.A. 103-836.

NEW HAMPSHIRE modernizes its unitrust provisions. 2024 N.H. Laws ch. 292.

PENNSYLVANIA provides that individuals convicted of elder abuse of a decedent are prevented from inheriting or otherwise acquiring the assets of the decedent to the same extent as a slayer would be limited. 2024 Pa. Legis. Serv. Act 2024-40. n

The Section acknowledges the generous support of the following sponsors for their involvement in this year’s National CLE Conference: