Publications
Section of Real Property, Probate, and Trust Law

P R O B A T E   &   P R O P E R T Y
March/April 2006
Vol. 20 No. 2
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Section News

  Student Writing Contest Winners Announced

The 2005 first place winner of the Jacques T. Schlenger Student Writing Contest is Craig S. Kaufman, Temple University, for his submission, “Sympathy for the Devil’s Advocate: Assisting the Attorney General When Charitable Matters Reach the Courtroom.” Second place winner is Adrienne Iwamoto Suarez, University of Hawaii, for her essay, “Covenants, Conditions and Restrictions on Free Speech?” In third place is Jennifer Felten, Southwestern University, for her essay, “Brownfield Redevelopment 1995–2005: An Environmental Justice Success Story?”

The competition was named in memory of Jacques T. Schlenger, a nationally renowned estate planning lawyer, founder of the Venable Foundation, and a member of the Section for 45 years. The award was co-sponsored by the Venable Foundation, which was established in 1981. The foundation promotes the health and well-being of the communities where Venable clients and lawyers work and live and supports a wide range of civic, cultural, and charitable endeavors as well as public interest law and legal education.

The award was designed to foster interest, encourage legal scholarship, and reward law student writing on real property, probate, and trust law subjects of general and current national interest. The competition was open to all full-time law students in ABA-approved law schools in the United States and its possessions.

   

PROFILES IN MEMBERSHIP

 

Susan G. Talley

Susan Talley is an outgoing Real Property Supervisory Council Member, with responsibility for the residential group of committees. Her most rewarding experience in the Section has been her service on the Probate & Property board of editors, as an associate editor, the real property articles editor, and as editor-in-chief. She also fondly remembers the year she served on the nominating committee, which gave her the chance to meet many Section members for the first time.

Susan is a member of the Stone Pigman law firm in New Orleans. Her practice is concentrated on commercial real estate, including acquisition, finance, and leasing work. She cites the networking opportunities that the Section offers as an invaluable benefit to her practice. Her involvement in the Section led to her membership in the American College of Real Estate Lawyers, the Anglo-American Real Property Institute, and the American College of Mortgage Attorneys. Section members have served as ready resources when her clients have needed counsel outside of Louisiana.

Most important to Susan, however, are the friendships she has made through the Section. The significance of her ABA circle of friends became abundantly clear in the immediate aftermath of Hurricane Katrina, when over a thousand e-mails poured into her mailbox. “Being able to read messages of heartfelt concern from lawyers throughout the country helped sustain me during the tumultuous months of September and October, when I was unexpectedly enrolling my son in boarding school, living in temporary quarters, absent from my home, and unable to determine its condition (which turned out to be mostly fine), and working with my partners to help our clients and employees in a time of crisis. Those messages meant all the world to me.”

Back home in New Orleans, Susan is an active supporter of a number of charitable organizations. She serves as the vice chancellor for real estate of the Episcopal Diocese of Louisiana. Susan’s husband, Jay Gulotta, is an active member of the ABA’s Litigation Section. Their teenage son, George, has been attending ABA meetings since he was a toddler. For leisure, Susan enjoys playing the piano, cooking, and traveling. Right now, however, her energies and spare time are focused on the efforts to rebuild her beloved home town.

 

Steve R. Akers

Steve R. Akers is a managing director of Bessemer Trust, where he works with clients and their attorneys on estate planning matters and counsels the company on trust law matters.

Steve first became involved with the Section in the early 1990s when he co-chaired a task force to prepare comments to the IRS on behalf of the Section regarding proposed regulations under the newly enacted (at that time) chapter 14 valuation sections. He worked with various subcommittees involving a number of attorneys to assemble a large package of comments to the IRS on these important regulations. The project involved many leaders of the RPTE Section and the Tax Section of the ABA.

Steve has served the Section in various ways. He recently completed a term as the Finance and Corporate Sponsorship Officer and is currently the Probate and Trust Vice-Chair of the Section. He has represented the Section by serving as co-chair of the ALI-ABA Estate Planning for Family Business Owners course from its inception and over the last 14 years.

“I am proudest of the wide variety of CLE and writing activities that I have been able to participate in. One of the most recent ways of reaching attorneys throughout the country is through Section teleconferences. For example, in December I was able to talk with over 350 attorneys from all over the country on a Section teleconference. My primary goal during my years as officer is to ‘reach out’ and involve more and more attorneys around the country by taking CLE and committee activities into their offices through teleconferences, webcasts, and so on. My dream would be to have hundreds of attorneys each month join in teleconferenced committee meetings to network and address burning issues of the day in areas that interest them.”

“Section activities have benefited my career by creating opportunities to work closely with some of the top estate planning experts in the country.” Steve is also active on the Advisory Committee and in speaking at the University of Miami Heckerling Institute on Estate Planning and serves on the Strategic Planning Task Force of the American College of Trust and Estate Counsel.

Steve loves to play golf. “I can just enjoy myself and the beauty of golf courses.” (He scored a hole-in-one at a recent Section meeting in Colorado.) Steve’s wife, Gail, accompanies him on various Section activities, and his two daughters, Amy and Shelbi, have also attended some Section trips.

 

Young Lawyers Network

 

Wills vs. Revocable Living Trusts

Endlessly debated in estate planning circles is which is the better primary estate planning document, a will or revocable living trust. As usual, it depends. Knowing the relative merits of the documents is critical to serve your clients effectively. Here are several things to consider when you are choosing whether to recommend a will or revocable living trust.

Wills

Wills offer a measure of simplicity. A will is one document, as opposed to a trust, which also requires a “pour-over” will—“pouring over” any assets not transferred into the trust during the grantor’s life.

• Clients are usually more comfortable with a will, because clients often lack familiarity with trusts. (The corollary is the client who insists on a trust because of what he or she heard on a financial program on television.)

• Wills are typically less expensive in the planning stage because there are no costs associated with funding a will, unlike a trust.

• Wills require only a low level of testator capacity for execution.

• Wills can provide for guardians of minor children, unlike trusts.

• Wills are effective only on probate, which usually can occur only after death.

• The probate of a will is a judicial proceeding that requires notices and service of process, as well as potentially opening the details of the estate to public scrutiny. But if your state’s probate code allows for some type of informal or independent administration, then the details of the estate do not necessarily become a matter of public record.

• Wills do not assist in disability planning. Separate instruments are required to plan for the disability of the testator, such as a power of attorney to manage property and a health care proxy to allow an agent to attend to the testator’s personal needs.

• Wills operate only on “probate” assets or “testamentary” assets (assets either in the client’s name alone or when the beneficiary predeceases the client).

Revocable Living Trusts

• A trust is usually effective immediately, although funding of the trust may occur at a later time.

• A trust operates to avoid probate, but only for the assets in the trust at the time of the grantor’s death. For a trust to be effective, the trust needs to be funded during the grantor’s life and a “pour-over” will is used to transfer any remaining assets at death.

• A trust provides for the disability of the grantor by allowing a successor trustee to continue to manage trust assets regardless of the grantor’s condition; however, a health care proxy also should be considered to attend to the grantor’s personal needs. The trust is considered more effective in dealing with disability, as opposed to a power of attorney for property, which is often met with resistance by banks, brokerage companies, and others. But a power of attorney for property, including the power to transfer assets into the trust, can be critical to fully funding the trust if the grantor becomes incapacitated.

• Trusts offer a measure of privacy for the deceased grantor. If any disputes arise between the successor trustee and beneficiaries, however, it is likely that the trust terms will become a matter of court record despite  the grantor’s wishes.

• Because the trust is an agreement between the grantor and trustee, the grantor must have sufficient capacity to enter into a contract, which is typically a higher standard than that to execute a will.

• Trusts are generally more expensive in the planning stage because of the costs associated with funding the trust. Ensuring full funding of the trust may require hours of work and dozens of forms, deeds, and assignments. Arguably, the costs are offset, however, when considering the probate expenses avoided if the trust is completely funded.

 

Ask the Mentor

Query: How do I get involved in a CLE program or write something for a RPPT publication?

Most CLE programs are generated by RPPT’s substantive committees. A substantive committee is concerned with concrete legal practice areas, and lists of the RPTE Section’s substantive committees can be found at: Real Property, www.abanet.org/rppt/cmtes/rp, and Probate & Trust, www.abanet.org/rppt/cmtes/pt. The best way to get involved in CLE programming is to join a substantive committee and express your interest to the group chair or committee chair, whose roles include providing opportunities to Section members.

The RPTE Section publishes two periodicals ( Probate & Property magazine and the Real Property, Probate and Trust Journal) and three electronic newsletters ( E-Dirt, E-STATE, and the RPPT Bulletin). Through its Books and Media Committee, the Section also provides a long and continually growing list of monographs. Contact information for the editors and the editorial criteria for each publication can be found on the web. Visit the PUBLICATIONS link ( www.abanet.org/rppt/publications) on the RPPT home page.

 

Letter to the Editor

 

I want to thank you for your article in the July/August 2005 issue of Probate & Property questioning the constitutionality of state estate taxes imposed by decoupled states on real and tangible personal property sited in other states that impose no estate taxes (or estate taxes that are less than the pre-EGTRRA state credit). The state of Maine estate tax for residents has been calculated by allowing the deduction from the pre-EGTRRA state credit of the “lesser” of (1) the taxes imposed by other states on real and tangible personal property in those states and (2) a proportional amount of the state credit based on the ratio of non-Maine real and tangible personal property to the federal gross estate. In my situation, the client personal representative and his deceased spouse had each owned a tenancy-in-common interest in a Florida condominium at the time of her death. Because Florida’s estate tax is now unenforceable, the result was the imposition of Maine estate tax on the Florida real property. Citing the Treichler and Frick U.S. Supreme Court cases, we requested a refund of the additional tax that resulted. Today, we received a decision from the director of the Appellate Division of Maine Revenue Services. That decision concluded that the calculation of the Maine estate tax in that manner “likely violates” the Due Process Clause of the U.S. Constitution. Accordingly, a refund check will be forthcoming sometime in the next few weeks.

 

R. Lee Ivy

Jensen Baird Gardner & Henry

Portland, Maine

 




P R O B A T E   &   P R O P E R T Y
March/April 2006
Vol. 20 No. 2
Other articles from this issue
Articles from other issues of Probate and Property