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Death, Taxes and Miles: Where do your frequent flyer miles go when you’re gone?

When someone passes away, usually their next of kin, agent or fiduciary will begin to compile a list of the decedent’s assets.  Rarely will such a list include the decedent’s frequent flyer miles.  However, depending upon how many miles have been accrued during the decedent’s life, frequent flyer miles can be worth hundreds, maybe even thousands, of dollars.  In such cases, heirs or beneficiaries of the decedent’s estate may wish to benefit from the value the decedent has amassed in frequent flyer miles.

Transferring Miles

Most airlines allow for mileage transfer among the living, but it is usually an expensive task to accomplish, often accompanied by fees and yearly limits.  The transferability of frequent flyer miles upon death is no more simple.  Susan Stellin, the author of a New York Times article entitled “The Afterlife of Your Frequent Flyer Miles,” stated “I asked six airlines if they allow transfers

What Is An “Unforeseen Circumstance” That Might Permit Trust Termination?

January 29, 2013

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Last year we delved into some of the problems associated with trust termination.  And we learned that some jurisdictions, like Maine, abolished the presumption that a spendthrift provision is a material purpose of a trust.  Therefore, in states like Maine, a spendthrift clause may not necessarily prohibit the termination of a trust.

Today, we turn to Arkansas, a state that – unlike Maine – has codified the common law presumption that “[a] spendthrift provision in the terms of the trust is presumed to constitute a material purpose of the trust.”  Ark. Code Ann. § 28-73-411(c).  But, that’s not our focus today.  Today, we want to look at what type of situation might permit termination of a trust when a statute permits trust termination where “the trust’s purposes, as expressed in or implied by the circumstances surrounding the trust, as a result of circumstances not foreseen to the

The Use Of Expert Witnesses In Breach Of Fiduciary Duty Cases

January 24, 2013

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The role of experts in breach of fiduciary duty cases is an emerging and unsettled area of law.  Of course there will always be questions about whether an expert is qualified to offer an opinion.  But there are additional quirks when a state codifies the standard of care required of a trustee thereby creating a statutory standard of care.  Does a plaintiff need expert testimony establishing that the trustee breached the statutory standard of care?  Perhaps.  But does that testimony necessarily result in an expert impermissibly testifying on the ultimate issue of liability?  Again, perhaps.

It’s questions like these that cause us to pay close attention when one of the rare ‘expert opinion’ decisions gets issued in a breach of fiduciary duty case.  Just this week in Sierra v. Williamson (2013 WL 228333), the United States District Court for the Western District of Kentucky gave us

IRS Posts February Interest Rates

IRS Posts February Interest Rates

January 22, 2013

Authored by: Stephanie Moll

The Internal Revenue Service must have been kept as busy by the fiscal cliff in December as the rest of us were, because they never posted the January AFR on irs.gov.  They have, however, posted the February rates.  For February, the 7520 rate is increasing to 1.2%.

Can A Beneficiary Do An End-Run Around An In Terrorem Clause By Getting Someone Else To File A Caveat?

January 17, 2013

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Well, probably not in Georgia.  If someone is behind the scenes pulling the strings to “initiate” legal proceedings, then that person – who didn’t actually file a caveat him or herself – may have violated the in terrorem clause.

In the first appearance of Norman v. Gober before the Georgia Supreme Court in 2011, the Court decided that eleven-year-old William Howard Norman, the grandson of Margaret Susan Scheer, lacked standing to challenge Scheer’s will because Norman was not an heir-at-law when the caveat was filed.  Norman was a contingent residuary beneficiary under Scheer’s will.  In other words, even if Norman’s caveat was successful, he would still take nothing.  As the Georgia Supreme Court put it, Norman was not “a person who will be injured by the probate of [the] [W]ill, or who will benefit by its not being probated.”  Actually, Norman would have benefited by the probate of

Georgia Appellate Court Adds Uncertainty For Recipients Of Charitable Gifts

January 14, 2013

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We’ve all probably seen some coverage of a few recent highly publicized disputes about charitable gifts supposedly not being used for their intended purpose.  2012 opened with country-music legend Garth Brooks scoring a $1 million jury verdict against Integris Rural Health, Inc. over a donation that was allegedly not used for its intended purpose.  And, 2012 closed with another dispute involving a music legend getting resolved when Albany State University returned $1.2 million in donations from the Ray Charles Foundation because the school did not use the money to build a new performing arts center.

In these two thorny examples of gift-giving and gift-returning, the recipients of the gifts were accused of not following through on the donor’s intended use of the gift.  In other words, the donor accused the recipient of doing something wrong.  But what happens when the tables are turned and it is

Almost Final Isn’t Final: The Fact That Divorce Was Nearly Final Does Not Prevent Spouse From Inheriting in Illinois Case

The Illinois Appellate Court in In re Estate of Doman issued a ruling on October 11, 2012 that once more clarifies why it is important to have a Will and, depending on circumstances, potentially a revocable trust. (See our prior posts on Why Do I Need a Will? (Part 1 and Part 2) and Why Do I Need a Trust?)

Trial Court Proceedings:

In the Doman case, Sara and Mark Doman were in the home stretch of their divorce when Mark died on July 4, 2011. On June 10, the trial court had issued a written dissolution judgment and reserved ruling on the ancillary issues, with a status hearing set for July 11. Sara’s attorney called the court on July 5 to inform the trial court of Mark’s death and the trial court entered a docket entry that stated, “Cause set for 7/11/11 is

Effects of the American Taxpayer Relief Act of 2012 on Estate Planning

Unless you have been living on a tropical island with no television, cell service, or internet for the past few days, you have probably heard that the Federal government passed a new law this week, averting the “fiscal cliff” by the skin of their teeth (well, at least with respect to tax reform, it remains to be seen what will happen with spending cuts). While there are many portions of the “American Taxpayer Relief Act of 2012” (the “2012 Act”) that may apply to you (for example, see our prior post on the effects of the 2012 Act on charitable gifting), our focus now is on how the new law affects your estate planning.

The New Law

Since 2001, the transfer tax laws have been in a state of flux, with ever-changing exemptions, rates, expirations and sunsets. Now, for the first time in over a decade, the 2012 Act

A Trust Is Still Not A Legal Entity Under Georgia Law

January 4, 2013

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It’s a pretty common mistake for litigators in Georgia unfamiliar with fiduciary litigation – naming a trust as a party to a lawsuit.  Apparently, as we recently saw in Ford v. Reddick, it’s a mistake made in real estate transactions, too.

It’s hard to blame them because, on the surface, the Georgia Code’s many references to trusts may unwittingly suggest to some that a trust is itself a legal entity.  But, under Georgia law, it’s not.

So what tripped up the real estate transaction in Ford?

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