"I leave $50,000 to my son Robert, so long as he divorces his horrible wife Bonnie within one year of my death"

"I leave my entire estate to Pamela, so long as, within six months of my death, she murders the following individuals:..."

These provisions would be null and void, so Robert gets his money with no need to divorce, and Pamela gets her inheritance without having to go on a killing spree.

A recent 1st District case (an appeal from Cook County) dealt with the question of whether a specific provision should be void as against public policy. The case is Estate of Feinberg, and it's here as a PDF. Basically, Mr. Feinberg's trust left property to his grandchildren, but any grandchild who marries outside the Jewish faith (to a person who doesn't convert in one year after marriage) is disinherited. Oh goy!

This provision was held null and void, because of the long-standing Illinois rule that "testamentary provisions which act as a restraint upon marriage or which encourage divorce are void as against public policy." There is, however, an interesting dissent, which tries to distinguish between the above divorce example and this case.

Thanks as always to Patricia Brosterhous for bringing this case to my attention through her IICLE Estate Planning & Probate Flashpoints. I'll comment on some of the other cases she mentions in the next few days.

The Wall Street Journal's Daniel Henninger goes even further on the subject of Senator McCain and taxes, here, in an article entitled "Is John McCain Stupid?" An excerpt:

Is John McCain losing it?

On Sunday, he said on national television that to solve Social Security "everything's on the table," which of course means raising payroll taxes. On July 7 in Denver he said: "Senator Obama will raise your taxes. I won't."

This isn't a flip-flop. It's a sex-change operation.

Mr. Henninger continues:

What I'm asking is, does John McCain have the mental focus, the intellectual discipline, to avoid being out-slicked by Barack Obama, if he isn't abandoned by his own voters?

revocable trust: a trust that can be amended or revoked after its creation (usually by the person who creates it)

grantor: a person who creates or sets up a trust; also sometimes known as the "trustor"

declaration of trust: what a trust document (or instrument, if you prefer) is called if the grantor is also the trustee; if the grantor isn't also the trustee, the document is known as a...

trust agreement: this makes sense, doesn't it? The grantor and the trustee have an agreement about how the trust property is to be held, but if you are both the grantor and the trustee, it would be weird to agree with yourself, wouldn't it?

living trust: basically, the name given to any revocable trust of which the grantor is also (during his or her lifetime) the beneficiary; I think that, if a husband and wife each has a living trust, the trusts are also sometimes referred to as "loving trusts," but that term sort of makes me want to throw up

irrevocable trust: a trust that cannot be amended or revoked once it's executed; usually, for tax reasons, the grantor of such a trust is NOT the trustee

Summary chart: page 6 (also a nice comparison on pages 37-9)

Senator McCain and the estate tax: page 8, 15, 17

Senator Obama and the estate tax: page 10, 19, 22-3

1. Obtain waivers of notice from all heirs and legatees (beneficiaries under the Will). This can save 1/2 hour to an hour of attorney time. If waivers aren't obtained, the attorney needs to send notice to each heir and legatee of the fact that the estate has been opened. Obviously, waivers only work if the heirs and legatees are willing to sign the waivers -- in an estate with a lot of heirs and legatees, or an estate where people don't get along, waivers probably can't be obtained.

2. Prepare a list of heirs and legatees yourself (with their addresses), instead of having your attorney do it. This can save hours of work.

3. Have a "proper" Will. There's not much you can do on this front once the decedent is dead, but things go much more smoothly if the Will was drafted correctly. And that typically means "He/she got it off the internet" won't work. Most internet/software Wills that I see forget to do the simple things, like waive the requirement that the executor post a surety bond. If this isn't done, you need to purchase such a bond, which can cost from $100 to many thousands of dollars per year.

4. Present the attorney with a list of the decedent's assets, including potential values, account numbers, and how the assets were owned. Again, this saves the attorney from having to spend the time to track down this information.

5. Be careful about attorneys and other professionals. Interview more than one attorney, and make sure that you understand the extent of your attorney's experience in the area of probate, as well as how fees will be structured. Some attorneys charge hourly (that's what I do); some seem to charge a flat fee. Find this out beforehand. Other things to inquire about:

a. How work will be handled. Are there specific non-legal things you can do in order to speed the process along or save money?

b. Who will be handling the matter. Will it be the attorney? An associate? A secretary? A legal assistant? You need to know, and you also need to know whether the person is going to be responsive. If you as a potential client leave a message for an attorney, how long before the attorney calls you back?

c. Does the attorney have good working relationships with accountants and financial folks, who can sometimes handle estate issues for less money, or does the attorney expect to do all of this work himself or herself (and charge for every minute)?

None of the above should suggest that you can do all, or even most, of the probate by yourself. A good attorney will save you lots of money in the long run just by doing things the right way. I would also suggest that clients not be penny wise and pound foolish. By this, I mean that the attorney should spend some time and money at the beginning of the probate, learning about the decedent's situation and communicating with the executor and the heirs and legatees, and should charge accordingly. This is a good thing, in the long run -- the more time spent upfront, the greater the chance to avoid problems later in the probate.

-you (62 years old or older) borrow against the equity in your home
-instead of paying down the mortgage over time, your mortgage grows. But it doesn't have to be paid back until the house is sold or until you die

I've encountered this situation in the probate context a few times recently: mom dies, reverse mortgage is now due, and guess what? The house can't be sold because of the bad real estate market.

The bigger problem, of course, is one of estate liquidity. When a person dies, there are bills that have to be paid. Some of those bills are small, and some of them can be avoided. But certain bills can't be avoided, and are going to cause a real headache for your survivors if you've left them with no liquid assets. There are lots of older people, even those who aren't particularly sophisticated, who take action to prevent their heirs from being stuck with hard-to-pay bills. That's why there's funeral insurance. But you also have to think about the extent to which your assets are in illiquid forms like real estate.

This morning I learned that the Illinois Secretary of State's office has its OWN small estate affidavit form, which it prefers that you use if you are trying to change the title on an automobile. The form is available here as a pdf.

Thanks to attorney Caroline Zoes for this helpful tip!

You can do so by presenting a small estate affidavit to the people or entities holding the decedent's assets: banks, insurance companies, IRA custodians, etc. The affidavit sets forth the facts -- that the decedent died (attaching a death certificate), that the decedent had or didn't have a Will (attaching a copy of the Will, if the decedent had one), etc. You also list the decedent's probate assets, and tell who should receive them in what percentages. The people or entities holding the decedent's assets should then distribute them as provided in the affidavit, thereby avoiding probate.

There's a small estate affidavit form in the Illinois Probate Act, but the form has a problem. Here's the relevant part:

7. (a) All of the decedent's funeral expenses have been paid, or (b) The amount of the decedent's unpaid funeral expenses and the name and post office address of each person entitled thereto are as follows:

Name and post office address Amount

(Strike either 7(a) or 7(b)).

8. There is no known unpaid claimant or contested claim against the decedent, except as stated in paragraph 7.

The issue is, what do you do in the typical small estate situation, where there are some assets and also some bills? Do those bills rise to the level of "known unpaid claimant" or "contested claim"? Can you in good faith sign this document under penalties of perjury, including paragraph 8, if you know of a potential claim? Local attorney Cary Lind has a nice discussion here (note that this is an old article -- hence the reference to a $50,000 amount rather than $100,000).

All of which brings me to the case of Landheer v. Landheer (available heer, er, here as a PDF). The case involved a dispute among siblings over whether their father's trust amendment was valid. While Landheer does not depend on the UPL statutes, it uses another statute (the Consumer Fraud and Deceptive Business Practices Act (the "Act")) to reach a horrifying result. Here's the relevant language of the Act:

The assembly, drafting, execution, and funding of a living trust document or any of those acts by a corporation or a nonlawyer is an unlawful practice within the meaning of this Act.

There are also potential criminal penalties under the Act, but the bombshell dropped by the court here is that, because it was drafted by a non-lawyer, the trust amendment is null and void, and has no effect. Note that this result would be reached even if there was extensive proof that the living trust amendment reflected the wishes of the person who signed it.

Does this sound like a good decision to you?

Things get a bit more difficult when you are talking about a situation where the husband and/or wife have children from a prior marriage. In many cases the beneficiary situation will be something like this:

For husband: wife if she survives, otherwise to my children

For wife: husband if he survives, otherwise to my children

A slight but important difference. The concern for the first to die is to make sure his or her children don't lose out. There are a few ways to do this. Some thoughts:

1. Consider current property ownership. In many cases, the ways other married couples hold property (jointly, or as each other's designated beneficiaries) aren't appropriate AT ALL. Upon the death of the first to die, everything goes outright to the survivor. The survivor can then alter his or her estate plan to leave all of his or her property to his or her children only. Not what the first to die wanted, and arguably not fair.

2. One solution is a trust. Instead of getting the property of the first to die outright, the survivor gets the benefit of it for the rest of his or her life. But when the survivor dies, the trust property reverts to the children of the first to die. (The survivor's children would get all of his or her property via the survivor's trust at this same time.) This can work, but how well it works depends on how the survivor approaches the trust. Let's say that John and Mary Smith both have children from a prior marriage (two each), and trusts containing $1 million each. John dies. How should Mary pay living expenses for the rest of her life? May Mary drain John's trust of its assets before she starts taking assets from her own trust? This will lead to a situation where John's children can be disinherited.

Another important point: who's the trustee of the trust for the survivor? Is it Mary? One of John's children? Mary AND one of John's children? I can see problems with all of those possibilities. A corporate trustee may be helpful.

3. Agreement. Another option: a written agreement between the two spouses to make the children of both of them the ultimate beneficiaries of the estate. So, to go back to the John and Mary Smith example:

John dies. His property is held in trust for Mary's benefit for the rest of her life.

Upon Mary's death, the remainder of John's trust passes equally to his two children AND Mary's two children. And the remainder of Mary's trust passes in the same way.

One problem: what if Mary wants to remarry (no pun intended)?

I would also add that a lot of the difficulty and expense (in terms of time and money) in amending can be addressed at the beginning of the process. The attorney should explain to the client what an heir is, and the client should be able to get the attorney a list of all of the decedent's heirs, with full names and addresses (and, if possible, telephone numbers).

I'll resist posting a picture of me in my "back to school" duds, lunchbox (or dinnerbox, since I'm an evening student) in hand, heading to the GSB.

Mr. Tobias's brothers were previously attempting to use the so-called "slayer statute" to argue that Mr. Tobias's widow, Filomena, was involved in his murder and should therefore be disinherited.

Presumably Mr. Tobias's brothers are dropping their claim for a share of the estate.