A Discussion Forum for the Mississippi Estate Planning Community

Welcome to The Mississippi Fiduciary

David RussellWelcome to The Mississippi Fiduciary, a discussion forum for the Mississippi estate planning community hosted and edited by Pinnacle Trust.   As the senior editor for this site, I look forward to promoting discussion of current and relevant issues related to the disciplines within estate planning –  including law, accounting, banking, insurance, financial planning, and family counseling. In fulfilling the site’s mission, I draw from my own experience within the Trust and Financial Planning industry, as well as from the wealth of  news from other blog posts, websites, and events that travel the information highway.  And, because our state is blessed with tremendous specialized talent far and above anything I can offer, we also feature articles, commentary, and analysis by many of our state’s most recognized professionals in the estate planning arena. I invite you to lend us your own insights into this field as well by posting your comments. Or, if you have an interesting topic to discuss, contact me about being a guest author.

I look forward to hearing from you,
David W. Russell, CFP®

Couple Steals from Grandparents via POA

In another example of a good concept gone bad, KUSA TV in Colorado, reported that a Commerce City couple has pleaded guilty to stealing more than $200,000 from their grandparents.

William Young, 41, and his wife, Karen Young, 42, both pleaded guilty to theft of an at-risk adult.

Young had power of attorney for his grandmother, Francies, between June 2009 and December 2012. Investigators discovered that Young and his wife emptied the Gibbs’ bank accounts and used their credit cards for personal use. In total, the Youngs’ stole $227,000.

William Young faces a four to 12 year sentence. Karen Young faces one to three years in prison.

Powers of Attorney are excellent vehicles for facilitating the management of one’s affairs if they become incapacitated. Unfortunately, they can also be abused by the holder of that power. Great care should be taken when selecting the person or persons that you want to step in and manage your affairs (for your benefit) should you be unable to. Often, a professional fiduciary who is accountable to a court or other regulatory agency can be a better option.

Medical Science redefines post-mortem planning

Post-morten estate planning just got more interesting. A New England Journal of Medicine article reports today that a new device developed by Hungsing Labs in China, is capable of decoding brain cell activity after a person dies. In over two hundred clinical tests conducted on individuals only moments after pronounced dead, scientists were able to “ask the deceased” several questions related to their name, family, and other personal information, and decode the correct information after stimulating cells deep within the cerebral cortex. The device known as LCR (for Latent Cerebral Recovery) has already stirred controversy in China, where its use has prompted claims from family members that their loved one is not really dead, only in a deep state of sleep.

The device has its share of critics and fans. The International Association of Mediums and Psychics are split as to whether or not the device bodes well for the psychic industry. “Madame Seline” a psychic from Bellevue, WA says the LCR has limits that do not threaten her.

As I understand it, the device is only accurate for about one hour after death. After that the brain cells are really dead. Most of my clients still have questions to ask long after that. I am able to speak to the deceased even years after their loved-one dies.

Cryonics advocates in the US say the device only confirms their long held belief that physical death is “temporary” and that the LCR is one step closer to re-animation of life. Headen Phreezer with the Society for Cryonics Research based in Portland, OR, says the LCR has the potential for “redefining death”.

Estate Planning lawyers see the tests as encouraging. “Over 50% of Americans die intestate,” says William Wrighter, JD, of Oak Grove, IL. “Imagine being able to execute a will even after someone was previously thought dead. It could open up a completely new area of estate law.”

Author’s comment: to read the full story, don’t click anything. Just take note of today’s date and smile.

University of Mississippi Insurance Forum

davidspeaking1I wish to extend my sincere appreciation to Dr. Andre Leibenberg and The University of Mississippi’s Insurance and Risk Management Department for the warm welcome and hospitality shown to me this week. I was invited to present twice during the two-day symposium held on the campus of Ole Miss which was well-attended by more than 100 professionals in the life, health, and property insurance industry. Keynote speakers included Mississippi Insurance Commissioner Mike Cheney, Terry Headley of Headley Financial Group in Omaha, NE as well as several other insurance industry experts. I must say, it was a humbling experience to be in the company of these and other heavyweights. Thanks also to those who attended my sessions on Identification and Prevention of Elder Financial Abuse, and Fiduciary Liability and Trust-Owned Life Insurance. I hope that you learned a little more about these two issues.

These presentations and their supporting materials can be found on this website under the Presentations tab. Please contact me if you would like to discuss a situation where I can be of assistance. Also, please visit our other websites to learn more about how we can assist with your Trust business or if you are working with clients of aging parents, or need assistance in this area. These websites are:

Book Offered on Financial Caregiving

Book Cover I am pleased to announce the publication of my first book, What You Need to Know: The Adult Child’s Guide to Becoming a Financial Caregiver. The book is a culmination of both my professional and personal experience in working with older clients and their families, as well as working with my own parents. Three years ago, I became a financial caregiver to my parents. All of the years I had spent advising others about this reality came home and I realized that it’s one thing to advise others about this; quite another to actually be in the role. Even with my recent experience, I understand that my parents’ situation will be different from everyone else’s. I am less the “expert” than a fellow caregiver with thousands of others who entered this chapter in the relationship with their parents, not knowing what they need to know. I confess without hesitation that I am not the answer-man when it comes to the delicate issues surrounding this role. I doubt anyone is. Instead, the book focuses on what I refer to as the Four P’s – People, Property, Programs, and Plans – and what the financial caregiver needs to know about each.

The book can be ordered on Amazon for $14.95, or if you’d like a free copy, just email me at and send me your mailing address. I’ll be glad to send it to you.

Back-Door Roth IRA’s for the wealthy contributing author Ashlea Ebeling, recently reported on the so-called “back-door Roth” whereby high income earners can make contributions to a Roth IRA. Congress ended income limits on Roth conversions in 2010, but retained the income limits for contributions. The back-door approach, perfectly legal according to statements by tax authorities, utilizes a two-step approach and qualified employer retirement accounts to allow high-income earners to contribute to a Roth, bypassing the income restrictions.

See Roths For The Rich. Forbes Magazine, Feb. 27, 2012

Long Term Care not a priority among candidates

According to a recent article published by Forbes contributing author, Howard Gleckman, long tem care issues are not high priority items for discussion. This despite the fact that the fastest growing segment of our population are the octogenarians, those 80 and over, who are likely to place a heavy demand on long term care services.

Most presidential candidates don’t care enough about long-term care services to bother to describe their views on issue. Of the five candidates surveyed by 15 national advocacy groups only two–President Obama and former House Speaker Newt Gingrich–responded to five questions on long-term care. Neither of the two GOP frontrunners, Mitt Romney and Rick Santorum, answered the survey. Nor has Ron Paul.

See Long-Term Care Services: Forgotten By Most Presidential Candidates. Forbes 2/22/2012

New budget proposal targets Defective Grantor Trusts

The Journal of Accountancy reports that one of the features of the Obama Administration’s newly released 2013 revenue proposals “is a new plan that could alter estate planning techniques and benefits with intentionally defective grantor trusts (IDGTs).”

The proposal is being considered to coordinate certain income and transfer tax rules applicable to grantor trusts. Under the proposal, when a transfer is made to a grantor trust, the gift tax would be applicable when there is a distribution from the grantor trust or when the trust ceases to be a grantor trust. To the extent not yet distributed, any amount in the grantor trust at the date of the grantor’s death would be subject to estate tax. This would eliminate the transfer tax benefits of sales to IDGTs.

See Eileen Reichenberg Sherr, Budget Proposal Includes Change to Treatment of Intentionally Defective Trusts, Journal of Accountancy, Feb. 21, 2012.

Hat tip to Wills, Trusts & Estates Prof Blog.

IRA Beneficiary Planning has published an excellent article titled IRA Beneficiary Selection. The article discusses common mistakes made in naming IRA beneficiaries, and addresses such issues as naming trusts as IRA beneficiaries and how to title inherited IRA’s.

The introduction to the article is below:

Every week, more than 28,000 people reach the age where they must begin to take mandatory IRA distributions.  When the IRS “simplified” the IRA distribution rules in January 2001, many people mistakenly assumed that the process of distribution planning would now be simpler and that detailed planning was less necessary. But selection of IRA beneficiaries is now more important than ever. 

The new rules have not, in fact, made planning simpler; in truth there are many significant errors in IRA distribution planning that could prevent your legacy from ending up where you really want it to go.

Failure to probate will results in lost mineral rights

The 12th District Court of Appeals in Tyler Texas affirmed a lower court’s decision denying the appellant’s application for probating a will 13 years after the testator’s death. It should be a wakeup call for anyone whose family members may have owned land at one time or another in areas of the country that may now be sources of rich deposits of oil, gas, or other minerals. Since I recently became the financial caregiver for my parents who do own mineral interests in Louisiana and Texas, this case certainly hits close to home.

In the Estate of Everett H. Rothrock, Deceased, Jerry E. Rothrock appealed the trial court’s order denying his application to probate his father’s will as a muniment of title.  In one issue, Jerry contends the trial court erred in determining that he was in default for failing to probate  his father’s will within the statutory period. 

Section 73(a) of the Texas Probate Code states as follows:

(a) No will shall be admitted to probate after the lapse of four years from the death of the testator unless it be shown by proof that the party applying for such probate was not in default in failing to present the same for probate within the four years aforesaid; and in no case shall letters testamentary be issued where a will is admitted
to probate after the lapse of four years from the death of the testator.

In 1986, Everett H. Rothrock, Jerry’s father, signed a will appointing Jerry as the independent executor of the will and naming him as the sole beneficiary of the estate. Everett died on June 5, 1994.  In September 2008, Jerry was notified by an oil and gas landman that Everett owned mineral interests in Cherokee County, Texas.  On October 6, 2008, Jerry filed an application to probate Everett’s will as a muniment of title.

At a hearing on the application, Jerry testified that, in gathering Everett’s assets between 1985 and 1986, he investigated whether Everett owned any land. According to Jerry, Everett told him that he had sold all of the real property he had received from his parents and that he did not have any real property left.

The Court of Appeals upheld the lower court’s decision stating, “Because Jerry did not probate Everett’s will within four years after his death, relied upon a family agreement, and failed to show reasonable diligence, the evidence is factually sufficient to support the  trial court’s finding  that Jerry was in default.  The trial court did not err in denying Jerry’s application to probate Everett’s will as a muniment of title.”

Adding insult to injury is the fact that according to court documents, Jerry was also a “very successful lawyer in Washington, D.C. and that about half of his practice dealt with oil and gas law.”

MS Supreme Court Determines Conditional Bequest as Precatory

In Estate of Brill, No. 2009–CT–01968–SCT (Miss. Dec. 15, 2011), the Mississippi Supreme Court reversed in an opinion thoroughly analyzing the Mississippi precedents and holding that the language was precatory and thus the will gave the sister fee simple ownership of the residuary estate.

Bobbye Brill died testate on April 1, 2004.  She was survived by her mother, Annie Nichols, and her brother and sister, Frank Nichols and Shirlee Phillips, respectively.  Brill’s holographic will states:

I, Bobbye Brill, leave my home and contents to my sister, Shirlee Phillips.  My Thunderbird  car  I  leave  to my  brother,  Frank Nichols. The  remainder  of my estate   I  leave  to my  sister, Shirlee Phillips, with  the  understanding  she  will  take care of my mother, Annie Nichols.  Please be sure this is carried out.

Brill’s brother Frank Nichols, claimed that the language created an testamentary trust for the benefit of Annie Nichols, and did not confer a fee-simple remainder interest in Brill’s entire estate to Shirlee Phillips.

Both the Chancery Court and the Court of Appeals ruled against Nichols, claiming that the language created a “conditional bequest” to Phillips and that she had fulfilled the condition by caring for Annie Nichols.

In rendering its option, The Mississippi Supreme Court ruled that

After reviewing the entire will, we find that the sentence creates neither a testamentary trust nor a ‘conditional bequest’. We find that the language ‘with the understanding that she will take care of my mother’ was a precatory expression of Brill’s wish or desire and was not imperative. Brill’s will conveyed her residuary estate to Phillips in fee simple. Accordingly, we find that the Court of Appeals and chancery court correctly awarded the residuary estate to Phillips, but that both courts erred in finding that the will created a conditional bequest.


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