1. Ray Danner died in August of 2008. As this article explains, Mr. Danner made a number of loans prior to his death. His estate is now trying to collect on these loans. The defendants' defense:

“It was the accepted practice of the parties that Danner would loan the money with the expectation of repayment only if the entity were profitable. The parties have no reason to believe other than that in this case.”

If that's true, then -- yikes! I don't know if I want to live in a world where someone is loaned money and signs a note, yet all of the parties understand that the loan needn't be repaid.

2. I am involved in a series of connected probate cases. The cases involve three siblings and their aunt (who predeceased them). The aunt died in 1999 -- since then, very little has been done with respect to her property. So it sits, vacant, awaiting sale and distribution to her 35 heirs (because the aunt died without a Will). But wait! We now find out that perhaps the property wasn't owned by the aunt at all, but rather by her sister. And did I forget to mention the "agreement" that may or may not have existed between two siblings, in which they tried to bypass probate by informally dividing up the property of deceased relatives?

3. Remember Redd Foxx? The star of "Sanford and Son," a surprisingly blue standup comedian, and the man who once remarked that “[t]here's nothin' uglier than an old white woman"? Mr. Foxx died 19 years ago, but his estate is still... in the Red(d). (Sorry, couldn't resist. I'll be here all week.) His estate owes back taxes, but what's been collected or done since his death? Not much of anything, it appears. Is there money to pay the bill or, if not, does the estate own anything that could be sold? The article is here.

The film focuses on the art collection of Albert C. Barnes, who died in 1951. The collection, which is valued at more than $25 billion (yes, billion) dollars, was displayed for many years in his own museum, away from Philadelphia and its art establishment. This was by Mr. Barnes's choice. But after his death, and the death of a close friend who ran his foundation, the "big money" folks from Philly took over. They appear to have violated both the letter and the spirit of Mr. Barnes's Will, in loaning out some of his works and eventually moving the collection to a new museum in Philadelphia.

Some relevant pages:

IMDB page

Trailer in HD [edit: and a clip focusing on Mr. Barnes's Will]

This should make for an interesting film.

A decedent dies in early 2007, and her estate goes through probate. The administrator discovers an outstanding credit card balance of about $17,000, and sends notice to the credit card company of decedent's death and the probate. (The administrator also asks for more information about the balance, as there's some evidence that the decedent's credit card may have been stolen prior to her death.)

In response to the administrator's questions, the credit card company does nothing. It files no claims against the estate and, as time passes, all claims against the estate become barred under Illinois law. The estate is closed in late 2008, and all is quiet.

Then, out of the blue, a form 1099-C for the year 2009 arrives in the administrator's mail. On it, the credit card company shows that it forgave indebtedness to the decedent in the amount of $17,000 on November 11, 2009.

A form 1099-C has two effects:

1. Generally speaking, debts that are forgiven are treated as income to the debtor. And the form 1099-C is sent to the IRS.

2. Forgiven debts can be deducted by the credit card company on their tax returns.

To me, it looks like the credit card company is running a scam. The credit card company knows that, because of its own incompetence, the debt is no longer valid under Illinois law. Yet the credit card company wants its deduction, so it pretends that the debt is valid. And the fact that an innocent estate has to pay -- by forking over the tax on the "income," or by hiring professionals to fight the tax -- is beside the point to them. This seems like the credit card company's modus operandi -- I've heard from other attorneys who encountered the same situation with the company.

... keep customers' passwords, usernames, final messages, and so on in a virtual safe-deposit box. After you're gone, these companies carry out last wishes, alert friends, give account access to various designated beneficiaries, and generally parse out and pass on your online assets. Digital remains that are not bequeathed to an inheritor are incinerated, closing the book on PayPal accounts, profiles, even alternate identities....

Here is a link.

Have you seen the commercials for annual credit reports? The ones with the guy who sings a song about how he wishes he'd looked at his credit report before he lost all his cash and got stuck in a dead-end job? Unless you've been in a coma, you probably have. And if you've been paying attention, you know that the commercials offer a "free" report only if you enroll in something (NOT for free) called Triple Advantage, which allegedly monitors your credit for problems.

There's an easier way to get a credit report for free, without any strings. It involves going to this website. You are actually entitled to a free credit report each year from each of the three nationwide credit reporting agencies (Experian, TransUnion, and Equifax), and can get the reports through this site. Maybe you already knew this, but...

The tip I recently got is: go in and order a report (for you, or one for each of you and your spouse) every four months. So...

Today (2/24/2010): order Experian report(s)
6/24/2010: order TransUnion report(s)
10/24/2010: order Equifax report(s)
2/25/2011: order Experian report(s) as the cycle starts again

This way, you can monitor differences between the agencies AND monitor your credit over time. And, of course, it's free. (Let me stress that it's free only in a cash sense -- you still need to spend the time reviewing the reports and making corrections and having "old" or incorrect credit removed).

1. On February 2nd, a guy named Scott Lee Cohen won the Illinois Democratic primary for lieutenant governor. You probably know the rest -- this guy had a whoooooole bunch of skeletons in his closet. Cohen, under a lot of pressure, resigned after being made the butt of many a joke (and, if possible, making Illinois politics look even more ridiculous than it already did).

2. The Wall Street Journal yesterday published a story entitled "Why No Estate Tax Could Be A Killer." (A link is here.)

Is there a connection between these two stories? Yes, and that connection can be described in six words: THE FAILURE OF THE TRADITIONAL MEDIA.

As much as I make fun of Illinois Democrats over the Cohen affair, the fact is that his history -- steroid use and allegations of violent behavior -- was well-known to the Chicago media. They just chose not to report this history to Illinois voters, because... well... I guess they aren't very good at their jobs.

Ditto with the estate tax and the above WSJ article. Surprise surprise: having no estate tax (but a capital gains tax) will actually make even more estates subject to federal tax at death. You didn't know that? Talk to any estate planning attorney or accountant, and you would. Yet the article acts like this is some big, nasty surprise.

Here's a great quote from the article:

Under last year's law, estates up to $3.5 million, or $7 million for married couples, were exempt from federal tax. This year that law has been replaced by a fiendishly complex levy raising taxes on the assets of those with little as $1.3 million. It will affect the heirs of at least 50,000 U.S. taxpayers who die this year, whereas the old law affected only about 15,000 estates a year, according to the Tax Policy Center.

The article goes on to include this jaw-dropping statement: "This little-understood facet of the current law was enacted as part of a deal brokered in 2001...."

Wait -- so the media has known about this "little-understood facet of the current law" since 2001, but the Wall Street Journal is acting as though it's a huge surprise? On February 13th, 2010? Where has the Wall Street Journal been during the last nine years?

By reference, here's a section from my blog post dated June 3, 2005 on estate tax repeal:

... [I]f the death figures for 2010 are the same as in 2009, then we're trading an estate tax in 7,500 estates for a potential capital gains tax in the 56,300+ estates worth more than $1.3 million. The main question: How many of those 56,300+ estates will incur a capital gains "problem" (either a tax, or the need to expend substantial resources to compute the basis of inherited assets)?

Gosh, what an interesting question... for 2005. But again I ask, where was the Wall Street Journal and the rest of the traditional media?

-Parent died

-One sibling "took over" the probate (either because they were named in the Will as executor, or just because they took the initiative)

-That sibling isn't doing his or her job

By "isn't doing his or her job," I mean that the sibling is not carrying out the fiduciary duties associated with administering an estate. Things like:

1. Failing to give the other beneficiaries an inventory of the decedent's property.

2. Failing to give updates about the status of the estate (is property being sold? are bills being paid?).

3. Self-dealing ("$1 for the estate, $1 for me").

This Detroit Free Press article presents a similar Michigan case that's a cautionary tale. In that case, the parent is still living, but suffering from dementia. She put two of her daughters as co-owners on her bank accounts, to help her pay her bills. But the daughters allegedly looted the estate for almost $800,000.

I realize that this isn't a revolutionary idea, but I think too many young attorneys don't realize the importance of marketing yourself. What unique thing do YOU as a young attorney bring to the table? It can't just be intelligence and hard work -- most attorneys have those qualities.

So how do you find your niche? The easiest way is through your existing connections. If you're married to a doctor, and hang out with him and his other doctor friends, then consider areas of the law that would allow you to make medical professionals your client base.

Of course, not everyone has existing connections. In that case, you need to try to find something to level the playing field. In my experience, one thing that works well is becoming an expert with respect to some new development in the law. That's a big benefit because, with new developments, you are not at a disadvantage in terms of experience. When a new law passes or a new case comes down, you as a first year associate may know just as much about it as a partner who's been practicing for 30 years. Three examples:

1. Read and summarize the new Citizens United Supreme Court case, and write an article for your local paper about what it REALLY means.

2. Your state is legalizing marijuana for medicinal purposes. Totally familiarize yourself with all of the rules and regulations relating to setting up a marijuana dispensary, and advertise yourself as someone who can help clients "get legal."

3. Learn the ins and outs of the Trouble Asset Relief Program (TARP), so you can speak at seminars on the topic.

A better solution is to make a list of your property, including how it's titled (or who the beneficiaries are), and put that list with your original estate planning documents. And make sure to update it every year or so.

Calendar #2: Judge Budzinski (Chief Judge of the Probate Division), Room 1803
Calendar #8: Judge Coleman, Room 1804
Calendar #7: Judge Coghlan, Room 1802
Calendar #11: Judge Malak, Room 1801

I'm not an ethicist (insert attorney joke here), but I agree with Randy Cohen that there is no need to tell the friends about the switch. Especially when you are switching to family members (most people understand that blood is thicker than water). Maybe I feel this way because my wife and I did something similar. We named our friends as guardians of our daughter, but then switched to my sister and her husband once they got settled and had kids, and we saw that their parenting style matches ours.

A similar ethical issue (not discussed in "The Ethicist") involves telling people that they are named as guardians. I'm always surprised that people DON'T tell their friends/relatives that they have named them (or plan to name them) as guardians. I know this always makes for a heart-warming film ("lovable moppet(s) show up at the door of self-absorbed yuppie, who then discovers the value of family"), but it's significantly less heart-warming in real life. My advice: talk to those you plan to name, BEFORE you do so. (They may say no. That's what happened to the people my in-laws asked, when my wife was a kid.) And talk to those you have named, AFTER you do so, to fill them in on how things will work.

Due to an amendment to the Illinois Trusts and Trustees Act, there may be a new solution. Lyman Welch and Susan Bart describe the amendment in this Illinois Bar Journal article (it's from November of '09, but I just read it, so it's new to me!). The amendment adds section (d) to 760 ILCS 5/16.1. Some situations in which you may be able to use 16.1(d) to enter into a "nonjudicial settlement agreement":

-interpretation or construction of trust terms;
-resignation or appointment of a trustee; and
-exercise or nonexercise of a power by the trustee.

There are other situations outlined in the article, which I highly recommend.

#1: No action by Congress (no federal estate tax in 2010, but federal estate tax automatically comes back with a $1 million exemption in 2011 and thereafter);

#2: Prospective action by Congress (federal estate tax re-enacted for 2011 and thereafter -- and maybe for the rest of 2010 as well); and

#3: Retroactive action by Congress (so federal estate tax applies in all cases, even for 2010 -- obviously there's the retroactivity problem here).

If I had to guess, I'd say that #2 seems like the best possibility (maybe I should, but I'm not even including total repeal as a possibility). But even if that's the case, we have no idea what the re-enacted federal estate tax will look like. Will the exemption amount be $3.5 million? Or higher? Or lower?

The big question is, should any of this cause you to take action with respect to your documents right now? And my answer -- which I hate to give -- is, "I don't know." In a perfect world, you wait a month or so, we get some clarity on the estate tax, and then you have your documents updated. But what if that clarity doesn't come in a month or so (or ever)? Or what if you die during this period of uncertainty? Ultimately, I think everyone has to make the call on their own, depending on their situation and risk tolerance. The shameful part is that the very rich can afford to change their documents now, and then change them again and again. Can anyone else afford to do that?