RPPT Bulletin

December 2002

Download the pdf version of the bulletin (click here)

The RPPT Bulletin is emailed out on a bi-monthly basis to all Section members to keep up-to-date on the activities of the Section.

The RPPT Bulletin is emailed out on a bi-monthly basis to all Section members to keep up-to-date on the activities of the Section.

Update on the Gatekeeper Initiative†
The federal government and other governments are considering the extent to which lawyers and other professionals should be required to aid law enforcement agencies in the multi-lateral fight against money laundering and terrorist financing. Known as the "Gatekeeper Initiative," the Financial Action Task Force ("FATF") is proposing that certain professionals, such as lawyers, should be enlisted to serve as "gatekeepers" to the international financial and business markets (FATF is an inter-governmental body consisting of 29 countries and two international organizations that was established to develop and promote anti-money laundering policies at the national and international levels).

The ABA has taken an active role in defining the appropriate role of lawyers in U.S. government efforts to combat money laundering and terrorist financing. Most recently, the ABA Task Force on Gatekeeper Regulation and the Profession ("Task Force") participated in an open forum in Paris convened by FATF on October 8, 2002 to obtain input from the private sector on the so-called Consultation Paper issued by FATF on May 30, 2002. The Consultation Paper proposes that certain anti-money laundering measures be extended to lawyers, such as (1) increased regulation and supervision of the legal profession, (2) increased due diligence requirements on clients, (3) new internal compliance training and record-keeping requirements for lawyers and law firms, and perhaps most significant, (4) new "suspicious transaction reporting" ("STR") requirements mandating that lawyers report to a government enforcement agency or a self-regulatory organization information that triggers a "suspicion" of money laundering relating to a client activity. The Consultation Paper indicates that lawyers would be prohibited from informing their clients when a STR has been filed with the government. This is the so-called "no tipping off" rule. The Consultation Paper proposes that the STR requirement be enforced through criminal and civil penalties.

At the Fall Council meeting in Albuquerque, Gideon Rothchild and Kevin Shepherd (a member of the Gatekeeper Task Force) led a discussion on the Gatekeeper Initiative. Gideon's discussion focused primarily on the concerns of the Gatekeeper Initiative in the context of trusts and trust lawyers while Kevin's presentation dealt with the general ethical and legal implications of the Gatekeeper Initiative. Gideon has been active in the Gatekeeper Initiative, and was involved in preparing a response for the American College of Trust and Estate Counsel to the Consultation Paper.

At the upcoming 2003 Mid-Year meeting in Seattle, the Task Force will introduce a resolution to the ABA House of Delegates that will, among other things, call on the United States government to refrain from enacting any law, regulation, or policy that compels lawyers to disclose confidential information to government officials or otherwise compromises the independence of the bar, while taking action to combat money laundering. This resolution will allow the ABA to speak authoritatively for the legal profession on the Gatekeeper Initiative.

The U.S. Government has not yet developed a position on the Gatekeeper Initiative. However, it is anticipated that the U.S. Government will begin to do so in the near future, given the FATF's actions to date, as well as the activities of other governments around the world. The Section will continue to stay on top of this critically important issue to the profession.

† This article is derived from the report prepared by the Task Force that accompanies a resolution that will be presented to the ABA House of Delegates at the 2003 Mid-Year Meeting.

The Real Estate Opinion Letter Guidelines, a joint effort of our Section's Legal Opinions in Real Estate Transactions Committee and its ACREL counterpart, has been finalized. At the fall meeting of the RPPT Section, the Real Estate Opinion Letter Guidelines were approved by the Section Council. Formal approval from ACREL's governing body is expected soon.

The Guidelines project was developed in response to the recent revisions by the ABA Business Law Section of the Guidelines for the Preparation of Closing Opinions that were initially adopted as part of the Accord process.

The Real Estate Opinion Guidelines are intended to be used in connection with the preparation and negotiation of third party legal opinions rendered in connection with real estate secured loan transactions and adopt in their entirety the provisions of the Business Law Section Guidelines.

The Guidelines are now a single, integrated set reflecting the current state of customary real estate opinion letter practice. They address many issues, relevant to both real estate and business law opinion practice, and should provide guidance to opinion givers regarding closing opinions. The Real Estate Opinion Guidelines can be found at www.abanet.org/rppt/cmtes/rp/i5/home.html. A program to discuss the Guidelines at the Spring Symposia in New York on Thursday, April 3rd at 3:45 PM.

Transfer Tax Reform Task Force
The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) enacted by Congress in 2001 phases out over nine years the estate and generation-skipping transfer taxes, repeals for one-year the estate and GST taxes in 2010, and reinstates the estate and GST taxes in 2011. The provisions of EGTRRA create significant uncertainty for clients in estate and financial planning matters. The Section leadership believed that Section members and the public would benefit if a group of individuals knowledgeable in the tax law studied and prepared a report on the estate, gift, and generation-skipping transfer tax system. Accordingly, the Section took a leading role in creating the Task Force on Transfer Tax Reform. The Task Force is a multi-organizational group comprised of representatives from the ABA Sections of Real Property, Probate and Trust Law, and Tax Law; the AICPA, the American College of Trust and Estate Counsel, the American College of Tax Counsel, and the American Banker's Association. The purpose of the Task Force is to prepare a comprehensive report for submission to Congress, Treasury and the public which analyzes technical and transitional consequences of the significant changes enacted in 2001 with respect to the gift, estate and generation skipping taxes, and various alternative legislative measures that might be adopted to eliminate the substantial uncertainties that taxpayers and their advisers now face under the existing transfer tax system. The Task Force has received grants from the American Tax Policy Institute and the ACTEC Foundation. University of Minnesota Law Professor Mary Louise Fellows has been retained to serve as reporter for the project. The work of the Task Force is well under way and the Task Force expects to complete the project by the end of the year.

New Probate Committee - Bioethics
Bioethics is a new committee dealing with ethical issues involving reproductive technologies, termination of medical treatment, decision-making for wards and minors regarding medical treatment and participation in drug treatment programs, and property interests and claims regarding body tissues and genetic information. The Committee will focus on assisting practitioners in advising clients on the inheritance and support obligations arising from various assisted conception procedures, drafting estate planning documents to deal with surrogacy, post mortem
conception, and the ownership and control of gametes and frozen embryos, and dealing with estate administration and trust issues regarding the progeny of such births. Its initial focus will be to prepare a primer for practitioners on such issues, creating model provisions for fertilization clinic agreements to deal with inheritance issues and the use of gametes and frozen
embryos, and dealing with requests to trustees for invasions to finance such
reproductive treatments. The Committee also will deal with proposed revisions to the Uniform Parentage Act and will provide liaison to the
Standing Committee on Bioethics and the Law.

To join this or any of our other committees, please visit:

Winners of the 2002 Jacques T. Schlenger Student Writing Contest

The grand prize winner is Benjamin C. Brown of Washington & Lee School of Law in Lexington, Va., for his essay, "Deductions for Claims Against Estates: Should Post-Mortem Events Play a Role in Valuation?"

Second place winner is Virginia Brown of the University of Connecticut School of Law, West Hartford, Conn., for her essay, "Improving Mechanisms for Avoiding and Fairly Resolving Attorney Fee Disputes in Trust and Estate Administration."
In third place is Lynn M. Lizotte of the Ohio State University Moritz College of Law. For her essay, "Probate Mediation."

The competition was established in 2001 and is named in honor of Jacques T. Schlenger, a nationally renowned estate-planning lawyer, philanthropist, founder of the Venable Foundation, and a member of the Section for 45 years.

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 is open to all full-time law students in ABA-approved law schools in the U.S. and its possessions. In announcing the winners, Section chair Dennis Belcher of Richmond, Va., "This award recognizes the significant role and contributions of scholarship in the field of real property, probate and trust law and the need to nurture law students to help prepare them for practice in this important field. The award fulfills the Section's goal of engaging law students in our practice area, and encouraging them to participate in the work of our Section."

Entries must be received by the Section no later than June 14, 2003. For more information about the Section and the writing competition contact Anne Hoenig, ABA Section of Real Property, Probate and Trust Law, at 312/988-5590, or visit the Section Web site at www.abanet.org/rppt.

Upcoming Events

January 7 - 11
37th Annual Philip E. Heckerling Institute on Estate Planning
Fontainebleau Hilton Resort & Towers
Miami, FL

January 24
Co-sponsorship of Hospitality Law Program
Houston, TX

April 2 - 6
14th Annual Spring Meeting at Waldorf-Astoria Hotel in New York City.

May 2
Breaking Barriers and Building Bridges
Chicago Bar Association
Chicago, IL

May 29 - 30
Thirteenth Annual Charitable Giving Techniques Program
Le Meridian Hotel, Chicago

July 10 - 12
Estate Planning for the Family Business Owner
Boston, MA

August 7 - 13
ABA Annual Meeting
San Francisco, CA

Alan S. Novick, Co-Chair of the Probate G-2 Committee, is interested in your thoughts on a project-program and/or publication regarding state implementation of the new multijurisdictional practice rules/guidelines. Please answer the following and submit to Alan directly at an304@aol.com.

1.) Report on your state's present rules and any changes. Yes No
2.) Contribute some writing/participation in a program or publications re MJP. Yes No

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