Wealth Strategies Journal:  “The King of Pop's mortal life has ended with debts in excess of $500 million but the value of his immortalized image could mean an immensely valuable future estate.  What can the estate-planning profession learn from the Michael Jackson estate? What kind of testamentary document was used? Was the trust well designed? How will intellectual properties be managed? What executor will preside over the Michael Jackson estate?”

Wealth Strategies Journal:  “Irrevocable life insurance trusts (‘ILITs') are commonly used to keep insurance proceeds outside the estates of the grantor-insured, the grantor's spouse, and the grantor's descendants (if a generation-skipping trust is used). As the name indicates, an ILIT is irrevocable and its terms cannot be amended after it is created. The irrevocability of an ILIT can create problems for grantors and their attorneys alike. For example, perhaps the ILIT is not a generation-skipping trust and the grantor now wishes to leverage his/her GST exemption with the policy or policies owned by the trust. Or maybe the grantor no longer wishes to provide for one or more of the beneficiaries of the ILIT, or desires to change the dispositive terms of the trust. So what can the grantor of an ILIT do if he/she is no longer happy with the terms of an ILIT?”

The Ohio Supreme Court imposed a $6,387,990 civil penalty against two companies and their owners for engaging in the unauthorized practice of law in Ohio.

[T]he Court found that American Family Prepaid Legal Corporation and Heritage Marketing and Insurance Services Inc., their co-owners, Jeffrey and Stanley Norman, and multiple employees of those firms engaged in more than 3,800 acts of unauthorized law practice by virtue of their participation in a “trust mill” operation from March 2003 through March 2005.

The Court noted that despite the fact that American Family used sales persons who had never been licensed as attorneys to “advise” customers about their estate planning needs and persuade them to purchase a trust, and that other non-attorneys in California actually prepared the trust documents, the company attempted to legitimize its unauthorized law practice by passing each transaction through a Columbus attorney, Edward P. Brueggeman. Brueggeman seldom spoke with the customers who were purported to be his “clients,” and was paid a flat fee by American Family for every trust document he approved.

In its decision, the Court wrote: “From the start of his employment until March 2005, Brueggeman had an office within American Family/Heritage offices on Citygate Drive in Columbus. Brueggeman did not pay rent and used the supplies and services provided by American Family and Heritage employees to perform his role. Brueggeman did not hire or supervise the American Family sales agents. Brueggeman, after receiving the agreement, sent a form letter to the purchasers of the plans thanking them for choosing him to prepare their living trusts and their estate-planning documents. The letter also stated that the drafting process would take four to six weeks and invited the customer to call him […]

The Trust Advisor Blog:  “Leading Trust Companies and Multi-Family Office Providers will Soon be Staffed with Advisors Trained in Family Formation Matters.  The role of a trustee is expanding. Trusts are evolving to harness medical advances. With the use of stem cells and other genetic material babies born today are expected to live over 100 years.  As part of this evolution, new state laws now make extracting live sperm from a dead body for later reproductive use legal.  Cryobanks around the country are receiving customer deposits of frozen reproductive cells which include stem cells, cord blood, sperm, eggs and embryos.  The courts have held that genetic material is property, like securities and may be bought, sold or transferred.”

Attorneys Jonathan G. Blattmachr and Alvina H. Lo wrote an article on the date on which an estate must value the assets of the estate for the purpose of determining the federal tax on the estate.

“The alternate valuation rules in Section 2032 can alleviate the hardship that a decedent's estate may experience as a result of a decrease in the value of the gross estate from the date of the decedent's death to the date on which estate tax has to be paid. These rules permit an executor to elect to value the gross estate, as a general matter, six months after the decedent's death provided that both the value of the gross estate and the federal estate tax (and certain generation-skipping transfer (GST) tax) would decline as a result of the election. Perhaps at no other time since the Great Depression, when alternate valuation was originally enacted, has the election been as useful for estates as it is in today's current economic downturn. This article discusses the impact of the Proposed Regulations under 2032 and the Kohler case, among other things. Many considerations must be kept in mind, including the income tax impact of a lower step-up in basis. Other complications that may arise involve the type of assets in the gross estate (such as retirement plan benefits that will be IRD) and the relationship between the marital deduction and a bypass trust.”

Wall St. Journal:  “Inherited IRAs don't work like regular IRAs.  If you inherit an IRA from anyone other than your husband or wife, you can't roll it into your own IRA.  And you can't consolidate IRAs you inherit from different people into one account.”

Fox10TV.com:  “Melanie Billings appears to have covered her tracks with a will. But attorneys say it's not valid.   The last will and testament of Melanie Billings was placed on file this week, at the Escambia County Probate Office. Attorneys for the family said Byrd didn't even leave behind a will. . . . But the family's attorney, Kramer Litvak, says the court doesn't have the power to honor Melanie's requests.”

Professor Bridget J. Crawford of the Pace University School of Law and Professor Mitchell Gans of Hofstra University School of Law article focuses on

the federal estate and gift tax treatment of copyright termination rights. The right of a creative individual to terminate prior copyright transfers serves to protect against economic exploitation. Once a copyright’s value has been established in the marketplace, the author (or the author’s heirs) enjoy a ‘second look' at the gift, sale, license or other transfer of a copyright. But copyright termination rights – intended to enhance the economic well-being of authors and artists – undermine estate-planning strategies available to owners of other types of property. There is no policy justification for such discrimination, and so this article proposes legislative changes that would level the playing field for wealth transfer tax purposes.

Probate Lawyer Blog:  “The highly publicized estate battles of several deceased celebrities have cast a bright spotlight on the importance of having the proper estate planning. Although mega-rich celebrities seem to be affected overwhelmingly by these brutal family squabbles, the new book.  ‘Trial & Heirs: Famous Fortune Fights!‘ is designed to help every family, regardless of income level, avoid the financial pitfalls that drained bank accounts and created huge family rifts for the dozens of superstars profiled in the book.”

Wall St. Journal:  “In the arcane netherworld of estate planning, thicketed with acronyms like SCINs, GRATs and IDGTs, and under the peculiar rules of the Internal Revenue Service, low interest rates enable you to transfer more wealth to your heirs tax-free. On top of that, you can buy an unusual bond specifically designed to protect your heirs from losing money if rates rise.  So, with yields near lows, now is the time to stop moaning about the lack of income and to start turning rock-bottom interest rates to your advantage.  If your children are about to borrow money and you think they are a good credit risk, you might wish to be their banker yourself.”

Baltimore Sun:  The newspaper reprints its 1849 obituary for the famous American poet and author Edgar Allen Poe.  The story also includes other news in the same newspaper issue.

University of Louisville – Louis D. Brandeis School of Law professor James T.R. Jones' article entitled “Body, Body, Who Gets the Body? The Resolution of Bodily Remains Cases” discusses fights over the remains of deceased people.

What do celebrity Anna Nicole Smith; Godfather of Soul James Brown; baseball immortals Ted Williams and Kirby Puckett; artist Mark Rothko; some United States service members killed in the Iraq War; and even the Reverend and Mrs. Billy Graham have in common? All have been the objects of disputes over who controls final disposition of their mortal remains. Those, in turn, have brought into public scrutiny an ancient legal issue – who decides the place and method of disposal of the bodies of the dead. From antiquity, the law was ordinarily careful to honor the written or oral directions of the deceased. If a decedent did not express a preference, then burial was determined by the surviving spouse, and if there were none by the next of kin.

The abstracted article reviews the various disputes involving those listed above, as well as some less famous individuals. It concludes attorneys strongly should encourage their clients to state, either in their wills or other written documents, their choice for burial arrangements. Lacking that, they at least orally should indicate their desires on that subject to their next of kin. Doing so can avoid unseemly post-mortem disputes which can turn what should be a solemn and dignified process into a circus-like sideshow event.

The Probate Lawyer Blog:  “The will of the late Senator Edward Kennedy was filed with a Massachusetts probate court late last week, providing a peek behind the curtain of the famed Kennedy family.  Kennedy died on August 25, 2009, from brain cancer, at age 77.  He was survived by his wife of 17 years, Victoria, his three children, and two step-children.  Here is a copy of his will, courtesy of FOX TV in Boston:  Download Ted Kennedy's will.”

The Trust Advisor Blog:  “Nevada’s Financial Institutions Division, the state agency that supervises trust companies, and its Commissioner George E. Burns can celebrate a long fought victory for promoting major trust company regulatory reforms and carrying them through the legislature to the Governors’ desk.  The new law, Nevada Senate Bill SB-310, provides for $1 million in capital to be posted, a 330% increase in the requirement needed to license and maintain a retail trust company in the state.”

Americans love their pets.  Arizona and forty-one other states authorize the creation of a trust for the benefit of animals.  The purpose of a pet trust is to provide funds to pay for the care of pets after the death or disability of the trustmaker(s).  Pet trusts usually provide that when the last animal dies, the balance of the funds allocated to the pet trust goes to loved ones or to charity.

I prepare pet trusts for my Arizona estate planning clients who want to insure that their pets are cared for.  Most of the time pet trusts are created as part of a revocable living trust.