Keeping Current

 Probate

 Keeping Current—Probate Editor: Prof. Gerry W. Beyer, Texas Tech University School of Law, Lubbock, TX 79409, gwb@ProfessorBeyer.com. Contributors include Dave L. Cornfeld, Claire G. Hargrove, Christopher L. Harris, and Prof. William P. LaPiana.

 Keeping Current—Probate offers a look at selected recent cases, rulings and regulations, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.

CASES

 ACCOUNTING BY TRUSTEE: A named contingent beneficiary is entitled to an accounting. The settlor’s irrevocable trust named his children as remainder beneficiaries, but if they all die before final distribution without leaving living descendants, the decedent’s father is the beneficiary of the remaining trust property, if he is then living. The father sought an accounting and the trustee resisted, maintaining that the father was not a “beneficiary” within the meaning of state law, which requires a trustee to provide accountings to income and remainder beneficiaries upon request. In Marshall & Ilsley Trust Co., N.A. v. Woodward, 848 N.E.2d 1175 (Ind. Ct. App. 2006), the court affirmed the lower court’s summary judgment for the father, holding that a remote contingent beneficiary identified by name is entitled to an accounting.

 ADEMPTION: Property destroyed in an accident does not adeem. The testator died in a crash of the small plane he was piloting. The plane and the expensive watch he was wearing were severely damaged. His will gave all of his personal property, including the plane and watch, to his son. The son sued to obtain the insurance proceeds from the property and won, and his victory was affirmed by In re Estate of Sagel, 901 A.2d 538 (Pa. Super. Ct. 2006). The property existed at the time of the testator’s death and therefore did not adeem, making the son the proper recipient of the insurance proceeds.

 ATTESTATION: A witness may not sign the will after the testator’s death. Testator had his will notarized, and after his death, the notary, who had witnessed the testator’s signature on the will, executed a proof of subscribing witness. No other witness signed the will before the testator’s death, but the notary’s husband made a sworn statement asserting that he was present when the testator signed the will and his wife notarized it, that he saw the testator sign, and that he was ready to sign the will as a witness. The court determined that even though the applicable statute removed the requirement that witnesses to a will sign in the testator’s presence, the statute did not authorize the witnesses to sign after the testator’s death. In re Estate of Saueressig, 136 P.3d 201 (Cal. 2006).

 ESTATE TAX: IRS required to refund amounts accompanying extension request even though more than three years elapsed since remittance. The executrix filed an application for an extension to time to file the estate tax return and included an estimated estate tax remittance. Approximately six years later, the executrix filed the estate tax return, which showed that no estate tax was due. Although the IRS agreed that no tax was due, it refused to refund her money alleging that the three-year limitations period had run. The court in Blom v. United States, No. 05-2383, 2006 WL 1517393 (E.D. Pa. May 31, 2006), ordered the refund explaining that the remittance was merely a “deposit,” not a “payment,” and thus did not start running the statute of limitations.

 FORCED SHARE: No valuation discount for FLP. A widow asserted her forced share right in the decedent’s augmented estate, which included a part-sale, part-gift transfer to his son of the decedent’s interest in an FLP, the only asset of which was stock in a closely held corporation. The court in In re Estate of Hjersted, 135 P.3d 202 (Kan. Ct. App. 2006), affirmed the trial court’s refusal to discount the value of the transfer for lack of control and lack of marketability because the son’s position as trustee of the decedent’s trust unified in him control of the FLP, the corporate stock had already been discounted for lack of marketability, and the partnership structure was ignored in practice. In a related proceeding, the court held that the gift tax liability caused by the valuation of the partnership interest was deductible from the value of the augmented estate.

 FORCED SHARE: Revocable trust is subject to elective share rights. The Iowa legislature amended its forced share statute in 2005 to include revocable trusts created by a deceased spouse. In Sieh v. Sieh, 713 N.W.2d 194 (Iowa 2006), the court held that revocable trusts were also included under prior law, citing and relying on Restatement (Third) of Property (Wills and Donative Transfers) § 9.1(c) and Restatement (Third) of Trusts § 25.

 JOINT OWNERSHIP: Dispropor-tionate withdrawals justified imposition of a constructive trust. A husband withdrew stocks from joint and survivor accounts held with his wife and placed the securities in TOD accounts benefiting his children by a prior marriage. After his death, the wife sued and the trial court imposed a constructive trust in the amount of the damages awarded to the wife by the jury that heard extensive evidence on the parties’ contributions to the accounts. Although the intermediate appellate court reversed, the court in Estate of Cowling v. Estate of Cowling, 847 N.E.2d 405 (Ohio 2006), reinstated and modified the trial court’s order. The court first adopted the Uniform Probate Code’s definition of “net contributions” to a joint account and held that net contributions must be proved by a preponderance of the evidence. Because the imposition of a constructive trust requires clear and convincing evidence and tracing, however, the court modified the trial court’s order to impose the constructive trust on the proceeds of the sales of the securities rather than on a specific amount.

 JOINTLY OWNED PROPERTY: A unanimity requirement is an unlawful restraint on alienation. The testator devised real estate to his nine children as tenants in common and directed that the property could not be partitioned or sold without unanimous consent. In Vinson v. Johnson, 931 So. 2d 245 (Fla. Dist. Ct. App. 2006), the court allowed a partition proceeding to go forward, holding that the prohibition on partition is an unlawful restraint on alienation.

 MEDICAID: Refusal to exercise forced share right deemed a transfer. A husband’s will left his residuary estate consisting of the proceeds of the sale of the family home, which had been titled in his name alone, to a discretionary trust for his wife, who was residing in a nursing home. The wife’s agent declined to exercise the wife’s forced share rights to one-third of her husband’s estate, and the state terminated her Medicaid eligibility. The wife appealed and the court upheld the finding that the refusal to exercise the elective share was a transfer of the property that the wife would have received. I.G. v. Dep’t of Human Services, 900 A.2d 840 (N.J. Super. Ct. App. Div. 2006).

 PRETERMITTED CHILD: A bequest to a future parent prevents application of statute. The decedent’s will left his entire estate to his wife. When the will was executed, the decedent had two living children from a prior marriage. A child was born to the decedent and his wife. Thereafter, they divorced and the decedent died without changing his will. Their child claimed a share in the testator’s estate under the state pretermission statute. In Gray v. Gray, No. 1050143, 2006 WL 1793753 (Ala. June 30, 2006), the court held that the statutory exception for a will executed when the testator has one or more children that devises substantially all of the estate to the parent of omitted child applied, even though the child had not been born at the time of will execution and the children at that time were not the children of the testator’s spouse. The case was then remanded to the trial court.

SPENDTHRIFT TRUSTS: The child support exception applies to an undistributed interest. A mother created a spendthrift trust that included her former daughter-in-law and her son as beneficiaries. At the time of the distribution, the daughter-in-law executed a release, but the son, who owed child support, could not be found. State law allows a child of a beneficiary of a spendthrift trust who has a judgment or court order for child support to attach “present or future distributions to or for the benefit of the beneficiary.” The court in Booth v. Booth, 134 P.3d 1151 (Utah Ct. App. 2006), held that the release did not preclude the garnishment and that the exception to the spendthrift protection extended to the son’s share of the trust even though it could not be distributed because of his absence.

 TRUSTS: An irrevocable trust may be rescinded for mistake. The settlor created an irrevocable trust, retaining the power to control the distribution of income. Her lawyer advised her that the creation of the trust would result in estate tax savings. When the settlor discovered her attorney’s error, she sued for malpractice and also brought a proceeding to rescind the trust. The court in Generaux v. Dobyns, 134 P.3d 983 (Or. Ct. App. 2006), allowed rescission on general equitable principles, citing the Restatement (Third) of Trusts § 12 and pre-UTC Oregon law.

 TRUSTS: Power of appointment naming non-existent objects was not ambiguous. The decedent executed an inter vivos trust 10 days before her death that gave her husband a special power of appointment in favor of the wife’s descendants. The default takers were her siblings or their descendants if they failed to survive her husband. At the time she executed the trust, she had no living descendants. In his will, the husband exercised the power of appointment in favor of his son and his son’s wife. The trial court found that the language creating the power was ambiguous and reformed the trust by removing the limitation on the objects of the power. The intermediate appellate court reversed, finding neither latent nor patent ambiguity in the language. In re Living Trust of Johnson v. Johnson, 190 S.W.3d 469 (Mo. Ct. App. 2006). A dissenting justice would find a latent ambiguity when the language is read in light of the facts.

RULINGS AND REGULATIONS

ESTATE TAX DEFERMENT: IRS sets forth new guidelines for Code § 6166 availability for estates holding real estate used in a closely held business. The ruling includes a list of non-exclusive factors that the IRS will use to determine whether the asset was used in an active trade or business. Rev. Rul. 2006-34.

LITERATURE

California—Gifts to a “Care Custodian.” In The Danger of a Label: How the Legal Interpretation of “Care Custodian” Can Frustrate a Testator’s Wish to Make a Gift to Personal Friend, 36 Golden Gate U. L. Rev. 269 (2006), Kirsten M. Kwasneski argues that the California legislature should step in to avoid complicated judicial analyses.

 Conservation Easements. A real-world case study is employed to explore the issue of easement amendments by Nancy A. McLaughlin in Amending Perpetual Conservation Easements: A Case Study of the Myrtle Grove Controversy, 40 U. Rich. L. Rev. 1031 (2006).

 End-of-Life. Shelly Cohen argues in De-Moralizing Death: A Humanistic Approach to the Sanctity of Life, 14 Elder L.J. 91 (2006), that the law has provided an inadequate foundation for courts to rely upon when addressing issues surrounding the sanctity of life.

 Fiduciary Duties. Melanie B. Leslie concludes that professional and nonprofessional trustees should be held to different standards in Common Law, Common Sense: Fiduciary Standards and Trustee Identity, 27 Cardozo L. Rev. 2713 (2006).

 Intestate Succession and Same-Sex Partners. According to Christine A. Hammerle in her note, Free Will to Will? A Case for the Recognition of Intestacy for Survivors to a Same-Sex Marriage or Civil Union, 104 Mich. L. Rev. 1763 (2006), courts should recognize intestacy rights for same-sex individuals who were validly married or civilly united even if a partner dies domiciled in a state that does not recognize the relationship.

 Kansas—Medicaid Planning. Bryn A. Poland contends that the Kansas Supreme Court’s hostility toward legal Medicaid planning impairs the ability of elderly Kansans to receive long-term care in Don’t Plan on Aging: The Kansas Supreme Court Reaffirms Its Hostility Toward Medicaid Planning, 45 Washburn L.J. 491 (2006).

 Missouri—Constructive Trust. In his note, Unnecessary But Proper: The Missouri Court of Appeals Expands the Constructive Trust Doctrine While Ignoring the Recording Act, 71 Mo. L. Rev. 513 (2006), Benjamin C. Hassebrock explains how the court has expanded the circumstances under which a plaintiff may be entitled to this equitable remedy.

 Pennsylvania. In What the General Practitioner Needs to Know About Pennsylvania Animal Law (Part II)—Personal and Estate Planning for Pennsylvanians Owning Pets, 77 Pa. Bar Ass’n Q., July 2006, at 107, Neil E. Hendershot provides a detailed discussion of how pet owners may best provide for the care of their animals.

 Perpetual Trusts. Joel C. Dobris explains how and why perpetual trusts may need to be terminated in Undoing Repeal of the Rule Against Perpetuities: Federal and State Tools for Breaking Dynasty Trusts, 27 Cardozo L. Rev. 2537 (2006).

 Probate Exception. In The Playmate and the Probate Exception, 94 Ill. B.J. 320 (2006), James E. Pfander explains that the probate exception has been dormant for years and how the Supreme Court’s Marshall decision involving Anna Nicole Smith has brought it back to life.

Probate and Morality. Linda Kelly Hill contends that probate statutes that attempt to regulate marital behavior serve no legitimate state purpose in No-Fault Death: Wedding Inheritance Rights to Family Values, 94 Ky. L.J. 319 (2005/2006).

Rule Against Perpetuities. Max M. Schanzenbach and Robert H. Sitkoff conclude that the enactment of the generation-skipping transfer tax prompted the rise of the perpetual trust in Perpetuities or Taxes? Explaining the Rise of the Perpetual Trust, 27 Cardozo L. Rev. 2465 (2006).

Self-settled Spendthrift Trusts. In Fear Not the Asset Protection Trust, 27 Cardozo L. Rev. 2685 (2006), Adam J. Hirsch concludes that “the fundamental principles of asset protection trust doctrine are . . . compatible with public policy.”

South Carolina—Will Contests. Heyward Rebecca Dodkin focuses on clarifying the burdens of proof in South Carolina will contest cases in her note, Howard v. Nasser: The Relative Burdens for Wills Contested on the Basis of Confidential Relationships and Undue Influence, 57 S.C. L. Rev. 531 (2006).

Teaching Fiduciary Duties. In The Case for a Return to Mandatory Instruction in the Fiduciary Aspects of Agency and Trusts in the American Law School, Together with a Model Fiduciary Relations Course Syllabus, 18 Regent U. L. Rev. 251 (2005/2006), Charles E. Rounds Jr. asserts that a decision made by law professors in the 1960s to cease requiring courses in fiduciary law was misguided.

 Testamentary Capacity. In Right Feeling and Knowing Right: Insanity in Testators and Criminals in Nineteenth Century American Law, 58 Okla. L. Rev. 397 (2005), Robert E. Mensel examines the meaning of insanity in 19th century homicide prosecutions and will contests.

 LEGISLATION

 Florida allows a settlor’s guardian of the property to contest a trust before the trust becomes irrevocable. 2006 Fla. Sess. Law Serv. 77.

 Florida enacts Florida Trust Code. This statute, based on the Uniform Trust Code, will take effect on July 1, 2007. 2006 Fla. Sess. Laws Serv. 217.

 Florida modernizes guardianship law. 2006 Fla. Sess. Laws Serv. 178.

 North Carolina modernizes slayer statute. 2006 N.C. Sess. Laws 107.

 Ohio enacts Ohio Trust Code. The Ohio Trust Code will take effect on January 1, 2007. Authorities differ as to whether this Code is considered an enactment of the Uniform Trust Code. 2006 Ohio Laws 128.

 Pennsylvania abolishes the Rule Against Perpetuities for interests created after December 31, 2006. 2006 Pa. Legis. Serv. 98.

 Pennsylvania enacts Uniform Trust Act. This statute is considered an enactment of the Uniform Trust Code and will take effect on November 4, 2006. 2006 Pa. Legis. Serv. 98.

Rhode Island authorizes virtual representation in wills, estates, and trusts cases. 2006 R.I. Pub. Laws 167.

 Rhode Island grants trustees the power to adjust between income and principal. 2006 R.I. Laws 168.