Yearly Archives: 2016
Jun 14, 2016 Paula Monopoli
Language matters. In her recent article, Not Your Mother’s Will: Gender, Language, and Wills, Karen Sneddon details just how much language matters in the context of wills and trusts. In a comprehensive review of linguistic theory and its intersection with inheritance law, Sneddon illuminates how will clauses and trust structures reflect gender schemas about men and women.
Sneddon first lays a foundation for her hypothesis that will drafting reflects masculine and feminine roles and norms by acquainting the reader with basic linguistic theory. She notes that wills are one of the most personal and oldest forms of legal writing. Sneddon goes on to introduce the concept of androcentrism as a driver of language-based gender norms. Phrases that focus on men as the typical and women as the atypical mirror what Sneddon describes as the remnants of patrimony. Cultures perform and reproduce gender through language. Using terms like “executor” and “executrix” implies that the latter is the less important variation on the central role. Interestingly, Sneddon asserts that prior to the nineteenth century there were fewer gender distinctions in language and actually more female executors. She suggests that the rise of Victorian ideals relating to the delicate nature of womanhood may have contributed to this shift away from women performing such public duties and that the increase in the gendered form “executrix” reflects those societal changes.
Sneddon proceeds to give the reader several striking examples of form book instructions and sample clauses that clearly reflect gendered views of women. For example: “As one author generalized in 1970, ‘Many older women with no family (and usually with estates that do not exceed $2,000) want to leave each memento they own to a different person.’”
These gender schemas are reified when included in form books in ways that are subtle but powerful. Sneddon highlights this entrenching effect when she writes, “Some modern form books continue to endorse gendered recommendations, such as a form that limits a daughter’s ability to appoint property to her husband. The form book does not present a similar sample provision to limit a son’s ability to appoint property to his wife.”
In addition to specific language in the text of instruments, Sneddon points out the gendered nature of estate planning structures like qualified terminable interest property trusts (QTIPs). For example: “Due to life expectancies, QTIPs are more frequently created for female spouses with the ultimate disposition of the trust property then being directed by the deceased male spouse.”
Sneddon goes on to note additional examples of gendered terms, like “testator” and “testatrix,” that imply the norm is male and the feminine version is the “other.” She gives examples of cases, form books and even a fairly recent ABA Probate & Property article that use gendered terms like “testatrix.” Sneddon argues that the continued use of these gendered labels, despite attempts to gender-neutralize the language of inheritance law, reinforces the idea that men and women can be expected to behave differently in bequeathing property and making dispositive decisions that reallocate their property after death. The use of such terms also diminishes women and tends to make them less visible in discourse within the field. Positing women as the “other” and the persistence of androcentrism in language slows our progress toward gender equality.
While I highly recommend this article to all those interested in both inheritance law and gender equality, it could be more succinct. That said, one reason it is fairly long is that the footnotes contain such a rich array of sources, some of which are tangential to the main point about gendered language, but all of which are fascinating to read.
In conclusion, Sneddon’s readers will be exposed to intellectual disciplines, like linguistic theory, that give new depth to the words in testamentary instruments as one reads them in the future. Readers will also think more carefully about the choice of words as they draft instruments for their clients. And since being thoughtful wordsmiths is one of our primary roles as estate planners, that’s a very good thing.
May 25, 2016 Gerry W. Beyer
Ante-mortem probate addresses a glaring deficiency with the post-mortem probate model prevalently used in the United States. In post-mortem probate contests the key witness—the testator—is deceased, leaving the courts with only indirect evidence of the testator’s capacity and freedom from undue influence. The relative ease with which individuals dissatisfied with the testator’s choice of beneficiaries may manipulate this indirect evidence encourages spurious will contests. In ante-mortem probate the testator executes a will and then asks for a declaratory judgment ruling that the will is valid, that all technical formalities were satisfied, that the testator had the required testamentary capacity to execute a will, and was not under undue influence. The beneficiaries of the will and the heirs apparent are given notice so they may contest the probate of the will. In addition to providing greater certainty to the testator of the will’s validity, the procedure makes will contests less likely. But ante-mortem probate is not without its price: The ante-mortem process may be extremely disruptive to the testator and the testator’s family. The testator may not wish to disclose the contents of the will nor to face the potential embarrassment that may occur if testamentary capacity is litigated. It involves additional costs and may raise due process and conflict of laws problems.
Susan G. Thatch’s article concisely discusses the advantages and disadvantages of implementing an ante-mortem probate statute in New Jersey and, by analogy, in any state. The article focuses on the debate of whether allowing ante-mortem probate is useful to testators or harmful to families by reviewing the ante-mortem probate model currently used by five states, as well as other models which scholars have suggested. The article takes the view that if the suggested statute is implemented, it should supplement instead of supplant traditional probate options already available to New Jersey citizens. Figuring out the best way to ensure peace of mind for the testator while fully considering the arguments for and against an ante-mortem probate statute forms the foundation of the article.
The article describes three principal models suggested for successfully structuring and implementing ante-mortem probate—the contest model, the conservatorship model, and the administrative model. Although all currently enacted state enabling statutes adopt the contest model, Ms. Thatch explains how each of the models operate and the benefits and disadvantages of each one. Overall, all of the models allow a court to determine if “the testator had adequate testamentary capacity and was free from undue influence” while the testator is still alive. The difference between the models is the extent to which beneficiaries and heirs are required to be notified and represented. By examining both the model currently used and those suggested by scholars, Ms. Thatch provides a comprehensive look at how New Jersey could structure its statute.
Ms. Thatch then analyzes the statutes in the five states where ante-mortem statutes is available—North Dakota, Ohio, Arkansas, Alaska, and New Hampshire. All of the states have statutes based on a variation of the contest model. Ms. Thatch acknowledges that North Dakota, Ohio, and Arkansas, states that have allowed ante-mortem probate since the 1970s, have reported a low usage of the ante-mortem probate procedure. However, Ms. Thatch explains that North Dakota and Ohio practitioners reported that it was valuable to have the statute available.
The article addresses how implementing an ante-mortem procedure in New Jersey would help practitioners have a valuable probate tool available to them. Although Ms. Thatch describes the current alternatives available to safeguard a testator’s intent, such as video-recording the will execution ceremony, creating an inter-vivos trust, using an inter-vivos transfer, and adding a no contest clause, the article explains why all of these options are not enough to ensure that the testator’s capacity will not be contested or that a beneficiary or heir will not claim undue influence.
In addressing the reasons for allowing ante-mortem probate, the article mentions the risk presented by the growing demographic of elderly citizens. Elderly citizens are at a greater risk of either being taken advantage of or having guardians inappropriately allocate or dispose of assets. Testators might benefit from having these pre-death probate disputes handled by ante-mortem probate. Additionally, ante-mortem probate can help ensure that the testator’s intent is not frustrated if the testator decides to depart from “deeply held societal values” when distributing assets. However, the article also mentions that the downside of allowing ante-mortem probate is that it can create family strife. The testator can determine whether the benefits of ante-mortem probate would exceed the potential difficulties. Because there are arguments for and against ante-mortem probate, the New Jersey Law Revision Committee will take into consideration the area of law and practitioners’ opinions before deciding whether the statute would be useful to testators and practitioners in New Jersey.
As a long-time advocate of ante-mortem probate, I highly recommend this article. Ms. Thatch makes well-reasoned arguments for allowing ante-mortem probate after considering both the value the statute could provide to testators and practitioners and the implications that may arise from its use.
[Special thanks to the outstanding assistance of Elizabeth Nanez, J.D. Candidate May 2016, Texas Tech University School of Law, for her assistance in preparing this review.]
May 9, 2016 Solangel Maldonado
Two years ago, my friend Myra died of cancer. She was survived by her husband Scott and their six-year old daughter Isla, as well as her parents, siblings, and many nieces and nephews. As Scott tried to make sense of his wife’s death, he was somewhat comforted by the knowledge that her pension and life insurance would cover the mortgage and keep their daughter in the only school she had ever known—the school where her mother had taught kindergarten.
Scott’s comfort was short-lived. Although Myra did have a pension and life insurance, neither Scott nor their daughter were the beneficiaries. When Myra began working as a school teacher many years ago, she designated her mother and only nephew at the time as the beneficiaries of her life insurance and state pension. Years later, she married Scott and had a daughter together, but never updated her beneficiary designations. She simply forgot. But she also believed that because she did not have a will, Scott would inherit everything she owned and use it to take care of their daughter. She was wrong. Although Scott inherited her very modest intestate estate, her pension and life insurance benefits went to her mother and oldest nephew instead of Scott—her intended beneficiary and intestate heir. The family was torn apart and Isla has had almost no contact with her maternal relatives since her mother’s death.
In their article, Revisiting the Revolution: Reintegrating the Wealth Transmission System, Professors Melanie B. Leslie and Stewart E. Sterk illustrate the law’s failure to address the problems created by the proliferation of non-probate instruments. This failure has deprived intended beneficiaries, like Scott, of assets that the decedent intended them to take and has also enabled wrongful takers, including former spouses, to receive assets that the decedent clearly did not want them to have.
Many individuals hold the bulk of their assets in non-probate instruments, such as retirement accounts, life insurance contracts, payable on death (POD) bank accounts, and revocable trusts. These instruments are not governed by wills law doctrines or the default rules of intestacy—rules that aim, among other goals, to honor decedent’s likely intent. Yet, the law does little to effectuate (and sometimes even frustrates) the decedent’s intent when her assets are held in non-probate instruments. As Leslie and Sterk demonstrate, these non-probate instruments have led to a fragmented and uncoordinated wealth transfer system in which donors, lawyers, and beneficiaries often lack accurate and complete information. They have also increased both the likelihood of error when creating an estate plan and the risk that wrongful takers of assets held in non-probate devices will squander them before their rightful beneficiaries have an opportunity to claim them.
Leslie and Sterk remind us that these problems were not unforeseen. They note that thirty years ago Professor John Langbein cautioned that non-probate transfers would create some potential challenges but he was optimistic that these would be addressed by lawmakers and financial intermediaries. Yet, they have not been. Leslie and Sterk’s examination of the beneficiary forms provided by insurance companies demonstrate that these forms are rarely designed to carry out the donor’s intent. In fact, they are often downright confusing—even to experts like Leslie and Sterk. In addition, state legislators have failed to extend wills law doctrines that are designed to effectuate the decedent’s intent (such as anti-lapse statutes, revocation-upon-divorce rules, and doctrines dealing with spouses and children omitted from a will) to non-probate assets.
In Leslie and Sterk’s view, the benefits of avoiding probate are sufficiently advantageous that we should not throw the baby out with the bath water. Consequently, they focus on reforms that would allow donors to continue to transfer wealth outside of the probate process while also ensuring that non-probate transfers accurately reflect the donor’s intent. For example, they recommend the creation of statutory forms for non-probate transfers to ensure donors understand the transfers they are making. They also recommend that states require custodians of non-probate assets to notify the decedent’s spouse and children of their existence and that they wait thirty to sixty days before distributing the assets to the designated beneficiaries to ensure that they are not dissipated before the intended takers have an opportunity claim them.
Their most important proposal, in my view, is one that some states and the UPC have adopted, but not fully. Leslie and Sterk propose extending all of the wills law doctrines designed to carry out decedent’s intent to non-probate instruments. Although some states apply certain intent-furthering doctrines (like revocation-upon-divorce) to both probate and non-probate instruments, they have not extended all of these doctrines to non-probate devices. Had the rule dealing with an omitted spouse in a will (UPC 2-301) applied to Myra’s pension and life insurance, Scott would have received Myra’s entire pension and life insurance, as she wished.
Leslie and Sterk’s most controversial reform is probably their recommendation to grant executors and administrators authority to alter the decedent’s non-probate transfers when they believe the transfers would thwart the decedent’s overall estate plan. Such power risks increased litigation from beneficiaries who receive less after the executor’s or administrator’s adjustments than under decedent’s designation (as Leslie and Sterk acknowledge). It could also take us down a dangerous road that, in my view, is best avoided. It is quite challenging for neutral factfinders in a courtroom with clear evidentiary rules to determine a decedent’s wishes. I think it would be more difficult, maybe impossible, for an executor or administrator (who is often a family member or friend) to objectively ascertain decedent’s wishes even if she lacks a financial interest in the disposition of assets.
One of Leslie and Sterk’s reforms directly addresses the problem of forgetful donors. They propose creating a nationwide voluntary registration system that would list each individual’s nonprobate transfers. Anytime a registered individual (again, registration is voluntary) attempts to make a transfer, the financial intermediary would remind her about her past designations. This reminder might be all some individuals need to help them coordinate their non-probate transfers and incorporate them into their overall estate plan. Other donors, like Myra, might benefit from an annual email reminder to check their beneficiary designations to make sure they reflect their wishes.
My initial reason for selecting this article as a Jotwell read was personal as I saw firsthand how a nonprobate transfer tore a family apart. However, the reforms Leslie and Sterk recommend are sure to help carry out the intentions of countless decedents even when they chose to avoid probate.
Apr 25, 2016 Sergio Pareja
Over the past few decades, most states have repealed the Rule Against Perpetuities or significantly extended the time period during which trusts may continue to exist. As a result of these changes, estate planners frequently attempt to extend the terms of trusts that were originally created to comply with the Rule Against Perpetuities. They primarily do this through modification doctrines, such as equitable deviation.
In this article, Dean Reid Kress Weisbord argues against the use of modification doctrines to extend the duration of trusts beyond the Rule Against Perpetuities period that was in effect when the trust was created. In addition, he recommends that the drafters of the Uniform Trust Code (the “UTC”) modify the UTC to clarify that modification doctrines do not permit the addition of beneficiaries to the trust who were not identified in the original trust instrument.
In Part I of his article, Dean Weisbord discusses the reasons for opposition to “dead hand control” and the historic application of the Rule Against Perpetuities to minimize long-term dead hand control. In this section, he notes that there are three primary arguments against dead hand control. First, long-term dead hand control creates inflexible restrictions that fail to account for a change of circumstances. Second, the large number of beneficiaries that could exist if a trust were allowed to exist for many generations would create an unmanageable administrative task for the trustee. Third, long-term trusts contribute to the concentration of wealth in upper class families, worsening the gap between rich and poor in our society.
In Part II, Dean Weisbord explores the considerations that a trustee should weigh in deciding whether to file a petition to extend the duration of an irrevocable trust. These considerations include the settlor’s intent, whether the jurisdiction retroactively repealed or abrogated the Rule Against Perpetuities, the transfer tax consequences of extending the trust’s duration, whether there are fraudulent transfer law implications to extending the trust duration, and the trustee’s potential for a conflict of interest in seeking to extend the duration of the trust.
In Part III, Dean Weisbord examines the doctrine of equitable deviation and focuses on how it can be applied to extend the duration of an irrevocable trust. As a general matter, equitable deviation permits the modification of a trust if circumstances arise that the settlor did not anticipate and if modification will further the purpose of the trust. The rationale for this doctrine is that, based on our knowledge of the settlor’s intent, the settlor would have selected different trust terms if he or she had been aware of current circumstances.
The reasons that support using the doctrine of equitable deviation to extend the duration of a trust include the following: (1) a settlor may have intended to create a perpetual trust but failed to consider the possibility that the Rule Against Perpetuities would be repealed or abrogated, (2) there is a related doctrine that allows the modification of a trust to achieve the settlor’s tax objectives, (3) a jurisdiction that retroactively repeals the Rule Against Perpetuities has in effect nullified the requirement that a trust have an ascertainable beneficiary, (4) the law should not discriminate against a settlor who intended to create a perpetual trust but created an irrevocable trust before repeal of the jurisdiction’s Rule Against Perpetuities, and (5) the jurisdiction’s repeal of the Rule Against Perpetuities shows a public policy favoring perpetual trusts.
The reasons against using the doctrine of equitable deviation to extend the duration of a trust include the following: (1) trust term extension hurts current beneficiaries by converting their remainder interests into lifetime interests, (2) equitable deviation exists to implement the settlor’s intent as it existed when the trust was created but it might be used in this case to reconsider the settlor’s original intent, (3) creating new future beneficiaries undermines the core trust law requirement of definite, ascertainable beneficiaries, and (4) there is too much risk of misinterpreting a deceased settlor’s intent.
After analyzing the reasons for and against utilizing the doctrine of equitable deviation to extend the terms of a trust, Dean Weisbord concludes that the arguments against extension outweigh the reasons in favor. The strongest consideration appears to be that current beneficiaries are hurt by converting their remainder interests into lifetime interests.
In Part IV, Dean Weisbord analyzes broader issues with trust term extension and its potential for misuse by corporate fiduciaries. The main issue he sees is the financial incentive of corporate trustees to lobby for trust term extension. The existence of more long-term trusts means more business for corporate trust companies, and they have a huge financial incentive to advocate for repeal of the Rule Against Perpetuities. This repeal not only extends their business interests in current trusts, but it helps their state to attract additional trust business. As mentioned, Dean Weisbord concludes that the UTC should be modified to prohibit the addition of beneficiaries who were not in the original trust instrument.
Dean Weisbord has written an interesting and thought-provoking piece. I find the argument that trust modification to extend the duration of a trust hurts current beneficiaries to be particularly compelling. At a minimum, it seems that the only time when trust modification to extend trust duration should be allowed is when all the beneficiaries provide informed consent.
Mar 25, 2016 Browne Lewis
Some multi-parent families are created by law and others are created by science. California and a few other states have acknowledged that a child can have more than two legal parents. Professor Daar calls these multi-legal families or families in law. In their quest to serve their patients, physicians seek ways to enable infertile couples to have healthy children. Those doctors make their “treatment” decisions without considering the legal consequences of their actions. For example, in an attempt to lessen the possibility of a child inheriting a medical ailment from his or her mother, doctors may replace unhealthy mitochondrial with material obtained from the oocyte of a healthy female. The use of this mitochondrial manipulation technology (MMT) may result in a child being conceived using an oocyte containing mitochondrial DNA from two women. Professor Daar refers to this as a multi-genetic family or a family in genetics. Numerous articles and books have been written about multi-parent families. Most of the scholarly literature discusses the family law issues that arise because of the existence of these types of families. In her article, Professor Daar goes in a different direction. She focuses upon the impact that the recognition of multi-parent families may have on the intestacy system.
Professor Daar makes the distinction between legal parents and genetic parents. She explores the steps that can be taken in order for the intestacy system to accommodate multi-legal families. In multi-legal cases, more than two persons have been adjudicated as the child’s legal parents. The article also discusses the intestacy system’s treatment of multi-genetics families. In those situations, even though the parents and the children are related by genetics, their relationships may not be legally recognized. Professor Daar examines the manner in which the children and adults in these families may be treated under the intestacy system. Professor Daar analyzes the options of including multi-parent families under existing intestacy systems, creating new intestacy schemes to accommodate them, or excluding multi-parent families from the intestacy system. Professor Daar analyzes the treatment of multi-parent families under the existing intestacy system. As a part of that analysis, she compares multi-legal families to other nontraditional families. With regards to multi-genetic families, Professor Daar evaluates the treatment of families that are connected to the decedent by blood.
American succession law has changed to accommodate the needs of children who are part of nontraditional families. Professor Daar discusses the rules that apply to stepchildren and adopted children. In most states, stepchildren are not permitted to inherit from their stepparents. However, in a few states, stepchildren may be able to inherit if there are no genetically-related heirs in order to prevent the estate from going to the state. At least one state allows stepchildren to inherit if the stepchild-stepparent relationship started when the child was a minor and clear and convincing evidence indicates that the stepparent would have adopted the child if a legal barrier had not existed. When a child is adopted, the genetic parent-child relationship is severed and the adoptive parent-child relationship is created. Therefore, adopted children can typically only inherit from and through their adoptive parents. Nonetheless, if a child is adopted by his or her stepparent, that child may be permitted to inherit from both the adoptive and genetic parents. The Uniform Probate Code and some states also permit dual inheritance if a child is adopted after the death of both genetic parents. Professor Daar concludes that in states that permit more than two legal parents, the child would be allowed to inherit from and through all of the parents. Thus, these multi-parent children would be legally better off than stepchildren and adopted children. Unlike stepparents and parents who put their children up for adoption, parents in multi-legal families would benefit from being able to inherit from the children.
The law is not likely to treat multi-genetic parents like other non-traditional families. For instance, in cases involving children conceived using assisted reproductive technology, the person donating gametes are not considered to be legal parents of the resulting children. The person donating the mitochondria in MMT will probably be treated like an egg or sperm donor. Hence, that person will probably not be given legal parent status. Since the parent-child relationship would be based on genetics and not law, Professor Daar looks at cases where the right to inherit under the intestacy system is strictly based on genetics. In the case of remote heirs, the law gives preference to distance relatives over close friends. However, non-marital children have to be acknowledged in order to obtain the right to inherit from their fathers. Genetics alone is not enough to create the father-child relationship. Professor Daar concludes that a multi-genetic parent would probably not be treated like other genetically-related persons because it would be difficult to trace the person’s relationship to the decedent to a common ancestor.
Professor Daar examines the viability of an intestacy system that creates a special category for mitochondrial heirs. Under that proposed system, persons contributing genetic material would inherit to avoid having the property escheat to the state. The benefit of this approach would be to ensure that someone genetically-related to the decedent would take the property. This is in keeping with the intestacy system’s preference for transferring property to genetically-related persons. Professor Daar identified three shortcomings of this proposed scheme. The first weakness she points out is that only persons of a female lineage would be able to inherit because the genetic link in MMT situations is based on mitochondrial DNA that only comes from females. Thus, this intestacy scheme would lead to gender discrimination and inequality among similarly situated descendants. Professor Daar’s second concern is related to the integrity of the intestacy system. It may be difficult to identify particular heirs because the parents may not tell anyone that the child was conceived using MMT. Moreover, if someone claimed to be genetically-related to the decedent, proving that fact through testing may be complicated and expensive. Lastly, Professor Daar maintains that, giving mitochondrial families inheritance rights would directly conflict with the manner in which the law treats families created using gamete donations.
Professor Daar argues that, for intestacy purposes, a parent-child relationship should not exist between persons in multi-genetic families created using MMT. Professor Daar bases her argument on the fact that the law does not give other children conceived using assisted reproductive technology the right to inherit under the intestacy system. She also contends that giving intestacy rights to multi-genetic families does not make sense from a legal, practical or social sense. The ways in which families are formed will continue to evolve. Eventually, legislatures and courts will comprehend that the current law is not adequate to deal with the unique issues faced by those nontraditional families. Professor Daar’s article makes a valuable contribution to a conversation that will continue to be necessary as long as there is not a strong connection between the needs of multi-parent families and the intestacy system.
