Friday, April 27, 2012

Our clients are increasingly concerned about the preserving the assets their children will inherit from them in the event of divorce. The New Jersey court in Tannen v. Tannen, 416 N.J. Super. 248, 3 A. 3d 1229 (2010) wrestled with the issue of the extent to which a trust created by parents should impact the award of alimony in a divorce.

In this case, after Mark and Wendy Tannen were married, they moved into a large house that was given to Wendy by her father. Several years later, (more…)

Thursday, April 26, 2012

Kimberly E. Civins and Brent A. Howard serve on the board of the 1873 Society Club, the junior board for the Atlanta Humane Society (“AHS”), and organized a Bryan Cave LLP walk team for AHS’ Pet Parade. The Pet Parade is an annual event that helps promote AHS and raises money for AHS while giving dogs exactly what they want, play time and a walk. The Bryan Cave walk team had a lot of fun and helped raise money for AHS. AHS is the oldest private charitable organization in Atlanta, founded in 1873. Originally chartered to protect women, children, and animals, AHS is now a widely recognized pet adoption center, clinic, and educational program provider, which has been serving Atlanta at 981 Howell Mill Road since the 1930s. AHS does not euthanize for time or space. To adopt, volunteer or donate, you can visit AHS’ website.

The Bryan Cave Team

The Real Bryan Cave Team

Tuesday, April 24, 2012

Generally, there are three basic goals of estate, generation skipping transfer, and gift tax planning: (1) the reduction of estate and gift taxes upon transfer; (2) the deferral of the estate, generation skipping transfer, and gift tax burden; and (3) ensuring for the necessary liquidity to pay the taxes when they come due.

We are in the midst of very volatile times which, at least for a foreseeable future, although no one knows for how long, can provide opportunities to achieve these goals in particularly beneficial and tax-efficient ways. This is the result of the present low interest rates and the drop in value of most types of assets, which allows clients to engage in some estate planning that may not be available when interest rates rise and values are driven higher.

Please see full Article for further information.

Tuesday, April 24, 2012

In Re: Stephen M. Gunther Revocable Living Trust, 2011 Mo. App. LEXIS 1293, October 4, 2011, is one of the first cases interpreting the duties of a trustee of a revocable trust during the settlor’s lifetime under the Uniform Trust Code. Here, the court ruled that under the provisions of R.S. Mo. §456.6-603 (a Uniform Trust Code provision), the trustee had duties only to the settlor while the trust was revocable.

In this case Stephen M. Gunther established a revocable trust for his own benefit in 1997, naming J. Barry Gunther as the initial trustee. Several years later, Stephen amended the trust to name himself as trustee and J. Barry Gunther as his successor trustee. Stephen died in 2009. Upon Stephen’s death, his two minor children became the residuary beneficiaries. A year after Stephen’s death, the beneficiaries sued the trustee seeking an accounting of the trust from its inception in 1997, except for the time when the settlor served as the trustee. The court affirmed the summary judgment in favor of the trustee that was granted by the trial court. (more…)

Monday, April 23, 2012


Effective May 1, 2012, new amendments to the Delaware Chancery Court Rules will materially change the required content of consent petitions to modify trusts. The official website of the Delaware judiciary describes the amendments as “help[ing] the Court protect trust assets of minor and unborn beneficiaries and ensur[ing] the integrity of the Court in the process of modifying trusts.”

So what’s the big deal? Let’s see . . .

For starters, the petition must specifically cover a lot of ground, including a lot of facts about the history of the trust, and nine separate points that must be pleaded “with particularity” (e.g., how the relief requested will affect current, vested future, and contingent beneficiaries; whether the relief requested will result in releases or indemnification of the fiduciary; and so on . . .).

Here are some other highlights:

  • A whole bunch of exhibits must accompany the petition, including the consent of the trustor of the trust, if living; a redlined version of the trust instrument; and a family tree;
  • A set of specific requirements as to the form and content of each consent; and
  • Detailed requirements regarding virtual representation, including a certification that no material conflict of interest exists between the consenting party and the person represented; and a detailed certification of the attorneys filing the petition.

While these new amendments will certainly make consent petitions to modify trusts longer, the sheer volume of information and exhibits that must now accompany a petition may, as a practical matter, make trust modification in Delaware cost prohibitive in a number of situations.

Thursday, April 19, 2012

With guest co-blogger Melissa Fernley.

Last month, prominent businessman and Florida socialite John Goodman filed a petition to adopt…his girlfriend. This unconventional move, coupled with Goodman’s notoriety as the multimillionaire founder of the International Polo Club Palm Beach, prompted news outlets around the world to pick up the story. The public responded with more than a few raised eyebrows, and many questions. Is this even possible? Is their relationship now incestuous? Why would someone do such a thing?

Yes, adult adoption is possible, and is allowed in many states across the country, including Missouri, although a few states require some sort of previous familial relationship. The result of such adoptions is not a traditional parent-child relationship, but rather a legal relationship that creates the same rights and responsibilities as would the adoption of a child. Adopted adults also become heirs of the adopting parent, although some states restrict the extent to which they can inherit. (more…)

Wednesday, April 18, 2012

The 7520 rate for May 2012 rose to 1.6%.

The May 2012 Applicable Federal Rates can be found here.

Tuesday, April 17, 2012

With research contributed by Melissa Fernley.

As the old saying goes, the two things you can’t avoid are death and taxes. But while the grim reaper may arrive unplanned, it’s generally understood in the U.S. that the taxman comes calling on April 15th – except when he doesn’t. This year, today, April 17th, is Tax Day. And last year, in 2011, it was April 18th. What causes this variation in the tax filing deadline? And why is Tax Day April 15th (ish) anyway? Read on for answers to all of your tax questions (that don’t actually relate to your taxes). (more…)

Thursday, April 12, 2012


I don’t want to get into a lot of detail about The Florida Bar v. Doherty, a recent attorney disciplinary proceeding from Florida, but just want to raise it as a cautionary tale for those practitioners who wear multiple hats for the same client.  You know – those practitioners who act as both estate planner and investment advisor for the same client; those practitioners who act as estate planner for a client and then get named as trustee, executor, etc. in that client’s estate planning documents; those practitioners who act as estate planner and annuity salesperson for the same client; and those practitioners who act as attorney and business partner for the same client.

It’s not that you cannot necessarily wear those multiple hats.  It’s just that, if you do, you better strictly follow the applicable rules – including any applicable rules of professional conduct.  These rules are, among other things, generally going to require you to advise your client in writing of the multiple, conflicting positions in which you find yourself when you assume multiple, concurrent professional roles on behalf of a client.

So, if you’re going to wear those multiple hats with one client, brush up on the rules first.

Thursday, April 12, 2012


Let’s say that you have a will executed in 2005 that provides something like “I give all the residue of my estate, including my homestead, to the Trustee serving under my Irrevocable Trust Agreement dated October 26, 1999, as amended or hereafter amended.”  In other words, you have a trust incorporated into the  will.

Now, let’s say you want to challenge the validity of that trust.  What should you do when you receive a notice of administration regarding that 2005 will?

In Pasquale v. Loving, a Florida appellate court held that, in order to challenge the validity of that trust incorporated into the will, you will first have to pursue remedies available at probate.  That’s what Dominic Pasquale, Jr. and Anthony Pasquale did when they received a notice of administration regarding the administration of the estate of Mary N. Porter.

When the Pasquales received a notice of administration, they filed a complaint against several individuals and trustees and a notice of independent action stating that a claim had been filed against the estate regarding all trust documents and the probate administration.  They later filed an amended complaint adding another trustee and personal representative of the estate as a defendant.  The “subject matter” of the complaint involved the alleged incapacity of the decedent and listed a number of trust amendments and will codicils that resulted in revocation of bequests to the Pasquales and reduction of the trust res.  The 2005 will was not specifically included in the list, but the complaint alleged that all testamentary documents executed after 2000 were null and void.

The trial court dimissed the complaint on the grounds that the complaint was not a will contest.  The court of appeals reversed.

The appellate court determined that the complaint was a will contest.  The will incorporated the trust and the will and trust documents had to be read together.  So to get at the trust, you had to get at the will first.  While the complaint didn’t specifically mention the 2005 will, it challenged the validity of all testamentary documents executed after 2000, and was filed in response to the notice of administration of the 2005 will.  Thus, while the complaint was “not a model of clarity,” it was still a will contest.

For a more in-depth discussion on the use of Pourover Wills and Revocable Trusts, see our post, “Why Do I Need a Trust?”