This year marks Probate & Property’s 25th Anniversary. Although the magazine is relatively young, many changes have occurred in the practice of real property and trust and estate law since the magazine’s first issue in January 1987. This article reflects on some of the remarkable trends in the market during the past quarter-century and highlights some of the timely information and practical advice that Probate & Property has provided to its readers along the way.
Then and Now: Changes in the Legal Landscape
It will come as no surprise to Probate & Property readers that the number of lawyers in the United States has almost doubled during the past 25 years, growing from 723,189 in 1988 to 1,225,452 in 2011. Clara N. Carson, The Lawyer Statistical Report (Am. Bar Found. 2004); Am. Bar Ass’n, National Lawyer Population by State (2011), www.americanbar.org/content/dam/aba/administrative/market_research/
Although the overall number of lawyers has steadily increased, the membership of the ABA’s Section of Real Property, Trust and Estate Law has waxed and waned during this period. The Section had 29,411 members when the magazine began in 1987 and reached an all-time membership high of 34,052 three years later, representing about 10% of the ABA’s total lawyer membership in 1990. From 1991 to 2009, the Section’s membership fluctuated between 30,000 and 33,000 members, but fell during the economic downturn in 2009, dropping to 28,504 members that year. By August 2010, Section membership had declined to 25,904, which included 23,507 lawyers licensed in the United States, 293 associate members (not licensed in the United States), 2,104 students, and 59 student associates.
To some extent, the fluctuation in the Section’s membership mirrors some of the trends in the real estate market. While the total number of housing units has steadily increased, there have been dramatic shifts in the number of new housing starts since the mid-1980s. The U.S. Census reported a total of 102 million housing units, having a median value of $78,300, in 1990. U.S. Dep’t of Commerce, 1990 Census of Housing: General Housing Characteristics, United States Summary, Table 1, www.census.gov/prod/cen1990/ch1/ch-1-1.pdf. By 2009, the total number of housing units was estimated at nearly 130 million units with a median value of $185,400. U.S. Census Bureau, State and County Quick Facts, http://quickfacts.census.gov/qfd/states/00000.html.
New housing starts totaled 1.6 million in 1987 when Probate & Property first hit members’ mailboxes. U.S. Census, New Privately Owned Housing Units Started, www.census.gov/const/startsan.pdf. After the stock market collapse of October 1987, however, housing starts fell steadily for several years, reaching a low of about 1 million starts during the 1990–91 recession. Id. The market then experienced a period of steady growth, ultimately reaching a high of 2 million starts in 2005 before the housing bubble burst in the latter half of the decade. In 2010, only 586,900 starts were reported. Id.
Although the number of new housing starts has declined, the outstanding home mortgage debt has multiplied from $1.9 trillion in 1987 to more than $10 trillion in 2009. See U.S. Census Bureau, The Statistical Abstract 1990, at 503, www2.census.gov/prod2/statcomp/documents/1990-05.pdf; U.S. Census Bureau, The Statistical Abstract 2011, www.census.gov/compendia/statab/2011/tables/11s1191.pdf. That increase is probably not surprising, given that the average cost of a new house has more than doubled during that period, from $127,993 in 1987 to $271,517 in 2010. U.S. Census Bureau, Median and Average Prices of New Homes Sold in the United States, www.census.gov/const/uspricemon.pdf (figures represent average of the monthly price data). The good news for consumers, however, is that home loan interest rates have steadily declined over the past 25 years—from 10.20% in 1987 to about 4.69% in 2010. Federal Reserve, Contract Rates on 30-year Fixed-rate Conventional Home Mortgage Commitments, www.federalreserve.gov/datadown
In comparison to the ebbs and flows of the real estate market, trusts and estates have seen significant steady growth during the past 25 years. In 1982, Internal Revenue Service statistics indicated that 1.6 million trusts and estates had reported more than $39 billion in income that year. Gary J. Estep, Fiduciary Income Tax Returns, 1982, fig. A, www.irs.gov/pub/irs-soi/82fiintr.pdf. In 2009, approximately 3 million entities filed tax returns, reporting more than $134 billion in income. See IRS, Estate and Trust Income Tax Statistics (2009), www.irs.gov/pub/irs-soi/09estrustsnap.pdf. Here again, there is good news for consumers, as the estate and gift tax rates have markedly decreased in the past 25 years. Readers will likely recall the 55% tax rate for estates over $3 million in 1986, which dropped to 35% for estates over $5 million in 2011. Similarly, the gift tax rate has decreased from 60% in 1987 to 35% in 2010.
One notable trend in the trusts and estates market has been a concentration of assets among a decreasing number of fiduciary institutions. Statistics compiled by the Federal Deposit Insurance Corporation staff for this article indicate that 3,676 institutions managed total assets of $5.7 trillion in 1987. By 2010, the total managed assets rose to $87.2 trillion, but the number of institutions managing those assets had dropped to 1,556 as a result of consolidations and two banking crises that caused bank failures. The top 25 institutions held 69% of the trusts and estates assets in 1986, a figure that grew to 98% of the assets in 2010. At the very top of the market, the top five institutions held 41% of the assets in 1986 and 87% in 2010.
Similar concentrations occurred in the number of institutions offering common and collective funds and corporate trust services. In 1986, $263 billion in common and collective funds were managed by 743 institutions. By 2010, just 110 institutions were managing about $1 trillion in funds. It should also be noted that a reduction in the number of common and collective funds resulted when, in the first half of the 1990s, institutions began converting these funds into mutual funds. For corporate trust services, the number of institutions dropped from 1,529 in 1986 to 259 in 2010, while the outstanding principal amount of bonds for which banks serve as indenture trustee rose from $1.5 trillion to $14 trillion. In 1986, the top 15 institutions served as indenture trustee for about half of the outstanding principal amount of bond securities for which a bank was an indenture trustee; but by 2010, the top 15 institutions’ share had increased to about 98%.
Helping Readers Keep Abreast of Change
During this period of rapid change, Probate & Property magazine has been a reliable resource for RPTE members, providing timely updates on legal developments, thoughtful analysis on how those developments affect the day-to-day practice of RPTE members, and practical advice for effective lawyering. A look at some of the articles featured during the magazine’s first year illustrates some of the benefits that Probate & Property has provided to its readers through the years.
Had we heeded Louis Perlstein’s cautions in the January/February 1987 issue, for example, the country might have avoided the economic crisis fueled by the collapse of the mortgage-backed securities market in 2008. His article, What the 1920s Tell Us about Mortgage-Backed Securities Today, discussed the factors that led to huge losses in mortgage-backed investments during the depression years of the 1930s. “While the governmental role, both federal and state, diminishes, care must be exercised to insure that appropriate laws and regulations are put in place to avoid what happened in the 1920’s and 1930’s,” he wrote. Id. at 21. Sadly, his warnings were not heeded, and many of the factors he discussed in that article were among the culprits identified in the 2008 crisis.
That same issue contained an analysis of one of the issues that keeps property law on the U.S. Supreme Court’s docket on a regular basis. In the article, Will the United States Supreme Court Settle the Just Compensation Issue in Land Use Regulation?, John P. Trevaskis Jr. discussed the Court’s failure to provide a definitive standard for determining when land use regulations have become so excessive that they constitute a “taking” requiring compensation under the Fifth Amendment. Although the Court did provide some guidance in one of the pending cases that Trevaskis discussed, Nollan v. California Coastal Commission, 483 U.S. 825 (1987), the Court continued to develop its takings doctrine in a series of landmark cases during the next 25 years. One of the most recent decisions included the noteworthy pronouncement by a plurality of the Court that takings may result from judicial, as well as legislative, actions. See Timothy M. Mulvaney, Uncertainties Remain for Judicial Takings Theory, Prob. & Prop., Nov./Dec. 2010, at 10. We anticipate this takings doctrine to continue unfolding during the next quarter-century.
James M. Pedowitz’s article in the July/August 1987 issue announced some new developments on another thorny issue that continues to needle both real estate and trust and estate lawyers. In Modernizing the Rule Against Perpetuities, Pedowitz discusses the newly drafted Uniform Statutory Rule Against Perpetuities, calling it “a long step toward simplification of an unnecessarily complex aspect of the law.” Id. at 48. This simplification process continues to the present day as the American Law Institute prepares to roll out its recommendations for an overhaul of the Rule Against Perpetuities in its Restatement (Third) of Property (Wills and Other Donative Transfers). Look for news on this development in an upcoming issue of Probate & Property.
On the trusts and estates side, articles published during Probate & Property’s first year demonstrate the magazine’s commitment to publishing relevant and informative articles with practical applications. Indeed, many of the articles in the first volume of the magazine are still applicable to attorneys practicing today. The very first issue included an article from Pam Schneider on The New Generation-Skipping Transfer Tax. Although the 1976 Generation-Skipping Tax was repealed retroactively, the 1986 version is still skipping along 25 years later.
The article featured on the cover of the March/April issue, When Can a Lawyer Represent Both Husband and Wife in Estate Planning?, addressed topics that likely were relevant when the Statute of Wills was enacted in England and that may still be contested when will signings occur on Mars in the distant future. Author James R. Wade noted that “[a]n increased sensitivity to legal ethics has led probate lawyers to think more seriously about possible conflicts” and observes that “[c]ourses in legal ethics [are] now commonly offered in the law schools.” Id. at 13.
An especially eye-catching article from that same issue is by James E. Brill, Using Systems in Probate, which advised the reader to “[t]ake the sex out of probate.” Id. at 47. This quote might lead to inappropriate speculation about the nature of practice in 1987, and perhaps the prevalence of necrophilia at the time, but the author was simply making the sensible suggestion that, in drafting documents, a lawyer should be gender-neutral by using “‘decedent’s’ rather than ‘his’ or ‘her.’” Id. Although the article refers to “word processing equipment” instead of computers, many of the time-saving concepts highlighted in that article are relevant today, along with the motivation for standardization: “As legal time is reduced, the cost of providing the services is reduced, and this means higher profits for the firm or lower fees for the client and or both.” Id. at 46.
The May/June issue included an article with language that could be taken directly from an article today. In Employee Benefits: Primer on Retirement Plan Payment Methods for the Estate Planner, Robert M. Fields wrote:
“[I]t is essential for estate planning lawyers to have a working knowledge of the rules governing both the manner in which distributions from qualified plans may be made and the tax impact of such payments.” Id. at 44. The 1987 article also harkens back to a simpler time when it notes that “[p]rior to the enactment of the [1982 Act], the value of a decedent’s interest in a qualified plan or IRA generally was excluded from his or her taxable estate.” Id. at 47. If the pre-1982 rule doesn’t make an estate planner yearn for bygone days, what does?
Finally, in the July/August issue, Probate & Property clearly established itself as a provider of timeless advice. That issue included A Checklist of Predeath Planning for the Dying Client, in which Lynn Wintriss and Cristin P. Carnell observed that “[t]he first question to be asked is whether the client is competent.” Id. at 9. It’s refreshing to see that in 1987 the first question had nothing to do with a retainer or a fee agreement. Similarly, the final article in that issue provided A.L. Moses’s practical advice on Determining That Death Has Occurred. Like death and taxes, gaining valuable knowledge from Probate & Property is inevitable.
A Growing List of Editors and Contributors
Probate & Property has undergone some changes of its own during the past quarter-century. Although the magazine retains its attractive glossy paper format and a focus on the practical implications of the law, the magazine has had periodic transitions in its editorial board and a continuous flow of new contributors through the years—all of which has helped the magazine maintain its vitality and vibrancy.
The first editor of the magazine was Robert P. Wilkins Sr., a South Carolina trust and estate lawyer. “He did a lot of starting of magazines,” said Wilkins’s wife, Rose, who noted that Wilkins also started three other major publications—the Law Practice Management Section’s magazine, Law Practice; the South Carolina Bar newsletter; and, with Rose’s help in the 1960s, a nonlawyer magazine called Sandlapper, which was designed to market South Carolina’s positive qualities at a time when its reputation was suffering nationally. A 50-year practitioner, Wilkins retired in 2006 to spend more time with his wife, three living children, and eight grandchildren. Among his many other accomplishments, Wilkins was the original author of the popular Drafting Wills and Trust Agreements treatise and software. In 2006, he won the Law Practice Management’s Section’s highest honor, the “Sam Smith” Award, for lifetime achievement in the field of law practice management. In 2008, the governor of South Carolina honored Robert and Rose Wilkins with the Order of the Palmetto, South Carolina’s highest honor, for starting Sandlapper magazine.
Probate & Property has had six other editors in its 25-year history: Neill G. McBryde of Charlotte, North Carolina, Ann E. Houle of St. Paul, Minnesota, Kevin L. Shepherd of Baltimore, Maryland, Shannon J. Skinner of Seattle, Washington, Susan G. Talley of New Orleans, Louisiana, and Edward T. Brading of Johnson City, Tennessee. Most of the editors, including Wilkins, have served two- to three-year terms. Brading, the current editor, has been the exception, serving in the role for more than 10 years already—with no immediate plans to retire, we hope!
The editors have been ably assisted by a cadre of talented articles editors and associate articles editors. Thomas F. Featherston Jr. of Waco, Texas, is the current and longest-serving Trust and Estate Articles Editor, serving in this capacity since the March/April 2000 issue. The current Real Property Articles Editor is Brent C. Shaffer of Wilmington, Delaware, who took over the post in 2008. Other former Trust and Estates Articles Editors include Donna G. Barwick, Neill G. McBryde, Elizabeth L. Quick, Jerold I. Horn, Kenneth B. Wingate, and M. Read Moore. Other former Real Property Article Editors include Eugene J. Morris, S. Alan Medlin, Ann E. Houle, Kevin L. Shepherd, Shannon J. Skinner, Susan G. Talley, Edward T. Brading, and Michael J. Glazerman. Glazerman is the longest-serving Real Property Articles Editor, having held the post from 2001 to 2008.
The magazine also has been blessed with legions of Section members who have been willing to share their legal knowledge and practical expertise through articles or regular columns. More than 1,000 authors have contributed lead articles to the magazine during the past 25 years. Jonathan G. Blattmachr has been one of the most prolific writers, co-authoring four pieces on estate topics. Gerry W. Beyer has the second most lead articles, contributing three articles on estate planning. Seventeen other authors have contributed to the magazine more than once.
Since 1993, the magazine has recognized its all-volunteer writing staff with annual Excellence in Writing Awards for the best technology/law practice articles, best practical use articles, best cutting-edge articles, and best overall articles. More than 150 authors have received awards in the past 13 years. Sebastian V. Grassi Jr. has topped the list with three awards: two Best Practical Use Awards in 2009 for a series on estate planning for families with special needs children and one Best Practical Use Award in 2005 for a summary, checklist, and chart of marital deduction formulas.
While we’re speaking of awards, the magazine recently won one itself. Graphic Design USA presented one of its 2011 American Inhouse Design Awards to Probate & Property for its March/April 2011 cover design, which used a patriotic theme to illustrate an article on the Gatekeeper Initiative. Kudos go to Art Director Andrew Alcala, who has been producing fantastic artwork to illustrate the magazine since July/August 2002. Many thanks also go to the magazine’s long-suffering Managing Editor, Rick Bright, who has served in that position since November/December 2001.
For 25 years Probate & Property has remained a high-quality, dependable publication that lawyers have relied on for the latest information on real property and trust and estate law. From its very first issue, the magazine has dedicated itself to producing articles of practical value to the Section’s members, a fact that has not gone unnoticed by its intended audience. By its fourth issue in July/August 1987, the magazine was already receiving accolades from readers like Joseph P. Sullivan, of The Green Tree Company, who wrote: “I found myself clipping out more than four articles for future reference or to send to associates or clients.” Letter to the Editor, Prob. & Prop., Nov./Dec. 1987, at 4. That spirit of high-quality and practical value remains a hallmark of the editorial board today.
Congratulations to Probate & Property on 25 great years!