Real Property, Trust and Estate Law Journal - 2014

Real Property, Trust and Estate Law Journal - 2014

Fall 2014, Vol 49, No 2

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These articles are available to download for ABA RPTE members only.

American Dream in Flux: The Endangered Right to Lease a Home
Andrea J. Boyack
Homeownership in the US is on the decline and the percentage of the population that rents their residence is growing. Renters present a distinct demographic compared to owners, and most of the more vulnerable segments of society rent their homes. But the law prohibits renting a home in some neighborhoods. Occasionally, zoning provisions hamper the ability of would-be tenants and would-be landlords to rent. More typically, however, community restrictive covenants are what block rentals. Zoning prohibitions on rentals have been attacked as violations of property rights. But in condominiums and other privately governed neighborhoods, segregation of renters from owner occupants has been continually upheld by the courts and has been consistently promoted as policy by government and quasi government entities. These policies and legal structures harm not only the rights of would-be landlords but also would-be tenants in such communities. Community rental restrictive covenants perpetuate broader social harms as well. It is time to rethink the desirability of these restrictions, even in the “private” context of neighborhood covenants.

A Tale of Two Privities: Conflict Among the Circuits on the Role of Privity of Contract and Privity of Estate in the FDIC’s Assignment of Failed Bank Leases
Shelby D. Green
This Article explores whether privity of contract is required for a landlord to have standing to show privity of estate and hold an assignee liable for rent. Central to the discussion are two rulings by the Second Circuit and the Fifth Circuit regarding the failure of Washington Mutual Bank, and the resulting uncertainty concerning the enforceability of the terms of subsequent lease assignments. Although the facts in each case were nearly identical, the circuits’ decisions split on the issue of privity of contract. The circuits disagreed as to whether privity of contract is required for a landlord to have standing to show privity of estate and hold an assignee liable for rent. The author explores this divergence and reasons that based upon the principles of property law, it is not necessary to establish privity of contract to show privity of estate. Ultimately, the author concludes that proving privity of estate is a matter of evidence, not a matter of standing.

A Critical Research Agenda for Wills, Trusts, and Estates
Bridget J. Crawford & Anthony C. Infanti
The law of wills, trusts, and estates could benefit from consideration of its development and impact on people of color; women of all colors; lesbian, gay, bisexual, and transgender individuals; low-income and poor individuals; the disabled; and non-traditional families. One can measure the law’s commitment to justice and equality by understanding the impact on these historically disempowered groups of the laws of intestacy, spousal rights, child protection, will formalities, will contests, and will construction; the creation, operation and construction of trusts; fiduciary administration; creditors’ rights; asset protection; nonprobate transfers; planning for incapacity and death; and wealth transfer taxation. This Article reviews examples of what the authors call “critical trusts and estates scholarship” and identifies additional avenues of inquiry that might be fruitfully pursued by other scholars who are interested in bringing an “outsider” perspective to their work in this area.

Onus Fiduciae Est Omnis Divisa in Partes Tres: A Statutory Proposal for Partitioning Trusteeship
James P. Spica
This Article proposes an adaptation of Uniform Trust Code provisions expressly to authorize settlors to partition trusteeship into separately acceptable, unblended trust relations pertaining to investment, dispositive discretions, and the residuum of trustee functions. The resulting fiduciary regime is entirely distinct from a cotrusteeship for purposes of determining each “separate trustee’s” authority and liability, separate trustees are statutorily disabled from accepting one another’s fiduciary duties, interpretive difficulties are avoided by the requirement of an express reference to the statute, and the regime overlies whatever facility for directed trustees and excluded cotrustees may already exist under the adapting jurisdiction’s version of the Code. Thus, fiduciary responsibility for a given res may involve two or more separate trustees, viz., a separate “resultant trustee” and either a separate investment trustee or one or more separate discretionary distributions trustees, and any of those separate trusteeships may itself comprise a cotrusteeship or be subject to the direction of a trust protector.

Mandatory Arbitration Clauses in Donative Instruments: A Taxonomy of Disputes and Type Differentiated Analysis
Jessica Beess and Chrostin
Arbitration clauses have become increasingly more common in wills and trusts as a means to avoid the court system, and as a way to benefit from the alleged advantages of alternative dispute resolution. The majority of current literature on this topic focuses on whether the beneficiary has consented to arbitration. However, this article poses a different question—even if mandatory arbitration clauses in testamentary instruments are enforceable, should they be enforceable as a matter of public policy? The author asserts that analyzing testamentary disputes by type—validity disputes and administrative disputes—reveals that the benefits of arbitration do not translate to either type of dispute.

Spring 2014, Vol 49, No 1

(Full PDF)
These articles are available to download for ABA RPTE members only. 

What We Have Learned From The Mortgage Crisis About Transferring Mortgage Loans
Dale A. Whitman
The vast expansion of the secondary mortgage market posed great challenges to the legal principles governing the mortgage transfer system. Not only were parties not adhering to the rules set forth under the Uniform Commercial Code, but even some courts were conflating basic principles such as the difference between ownership and entitlement to enforce. This Article analyzes several critical legal principles of the transfer process, and discusses what led to the system’s dysfunction during the mortgage crisis, while proposing a more user-friendly system for both lenders and borrowers.

The Physician Orders For Live-Sustaining Treatment (POLST) Coming Soon To A Health Care Community Near You
Robert B. Wolf, Marilyn J. Maag and Keith Bradoc Gallant
The estate, trust, and elder law community is seasoned in explaining and assisting in the implementation of advance health care directives. While directives are useful because they allow patients who are 18 years old and older to provide instructions for future treatment, they often fall short of conveying patients’ current wishes in light of existing conditions. POLST forms aim to fill this gap and provide consistency for patients who have a serious life-threatening illness. Through a decision-making process with their health care professionals, POLST give patients the tools for deciding upon and documenting their medical treatment preferences, thereby keeping the patients in control of their end-of-life treatment.

What’s Wrong With A Federal Inheritance Tax?
Wendy C. Gerzog
Scholars have proposed a federal inheritance tax as an alternative to the current federal transfer taxes, but that proposal is seriously flawed. In any inheritance tax model, scholars should expect to see significantly decreased compliance rates and increased administrative costs because, by focusing on the transferees instead of on the transferor, an inheritance tax would multiply the number of taxpayers subject to the tax.
This Article reviews common characteristics of existing inheritance tax systems in the United States and internationally—particularly in Europe. In addition, the Article analyzes the novel Comprehensive Inheritance Tax (CIT) proposal, which combines some elements of existing inheritance tax systems with some features of the current transfer tax system and delivers the CIT through the federal income tax system.


Winter 2014, Vol 48, No 3

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These articles are available to download for ABA RPTE members only.

Reconciling Nonprofit Self-Dealing Rules
Ellen P. Aprill
Self-dealing restrictions play a key role in the regulation of nonprofit organizations. This Article argues that most self-dealing rules applicable to tax-exempt nonprofits are too lenient, but that those applicable to private foundations are too strict. It recommends reforming nonprofit self-dealing restrictions by establishing advance administrative approval of such transactions. This reform also offers the advantage of creating a common ground between state nonprofit and federal tax regimes.

You Don’t Know What You’ve Got Till It’s Gone: Time-Barred Claims Under The Uniform Trust Code
Alan Newman
Prior to the Uniform Trust Code, statutes of limitations and the laches doctrine operated to prevent a beneficiary’s claim against a trustee for breach from being time-barred before the beneficiary knew or had reason to know of the claim. Because of its mandatory information and reporting rules for trustees, generally that also will be the case under the UTC. Most jurisdictions that have enacted the UTC, however, either omitted its mandatory information and reporting rules or significantly weakened their effectiveness. In such jurisdictions, there is a substantial risk that beneficiaries’ claims for breach against trustees will be time-barred without their having had an opportunity to protect their interests. This Article addresses how that can occur, proposes legislation to prevent it, and analyzes arguments courts might employ to prevent it in the absence of such legislation.

Dependent Relative Revocation: Presumption Or Probability?
Richard F. Storrow
A primary goal of the law of wills is to carry out the testator’s intent. However, when a testator dies leaving a succession of wills or having expressed to an attorney his or her plan to execute a new will, ascertaining the testator’s intent can be difficult. The problem is especially challenging when a court attempts to rationalize the testator’s intent with the principle of law that disallows correcting wills. This Article explores how courts have used the doctrine of dependent relative revocation to determine which testamentary scheme should be admitted to be probate. The application of this doctrine has unfortunately become untidy and unpredictable, due in part to the failure of courts to position their use of dependent relative revocation within the traditional framework of will interpretation. This Article explains the advantages of adopting a two-step interpretive process for applying the doctrine.

Equity In Times Of Mortgage Crisis
Steven W. Bender
The notion that equity is available to both lenders and borrowers in foreclosure is widely accepted. Yet, during times of a mortgage crisis, equity does not act to avoid certain injustices. This Article, premised on the historical and modern applications of equity, suggests increasing the role of equity without completely disregarding contractual obligations between lenders and borrowers.