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Extra Credit Assignment / Account 302 – Fall 2019
Please read this entire document carefully.
The extra credit assignment has been determined. This assignment is available to everyone and is due at the start of class on November 21st.
You can receive up to twenty (20) bonus points through this assignment. Note this is “up
to” twenty bonus points, you may receive fewer based on the overall quality of your work product. I will be grading on effort and your ability to identify issues and think logically. I do not expect you all to give me the “correct” answers to all the issues, but I want you to say something intelligent and well thought out and based generally on the law.
You should read Chapter 50 before starting this writing assignment. There is run over into several other chapters of your text book, some of which was covered in the pre-requisite course, but Chapter 50 is crucially important to your ability to identify many of the issues in this assignment. When you cite to a law you must give me citation of some kind to where you found the law or information (there will be no strict citation format, just let me see where you learned the information). You may use your book to provide a citation (identify the page number); you may even simply use the internet and provide the address for the website.
You can choose the format of how you handle this assignment. I would (personally) handle
addressing this assignment in some type of essay format, but you may tackle this hypothetical however you wish. I will not accept handwritten thoughts; they must be typed up and printed. Your typed-up thoughts should be double spaced using size 12 font with either Calibri or Times New Roman font. I would envision that most essays will be somewhere between five and ten pages but I have no strict format (high or low) on length.
I will not accept an email with your assignment. I want to be physically handed your
response (likely in essay format, but I’ll accept other formats) in class on November 21st or earlier. There will be no extension of time and you may not turn this in to me late.
These are individual/personal assignments, not group assignments. You are to work on this
assignment as individuals and not share your work with others. Do not collaborate or share answers. I want this to be your own personal work. Do not plagiarize items off the internet.
Here is your assignment:
On November 15, 2017, Robert died in a hospital in Texas just two and half years after being diagnosed with early onset Alzheimer’s disease. The exact cause of death of death was aspiration pneumonia and the last few months of Robert’s life he was unable to recognize lifelong friends or recall the extent of his assets. In fact, there is some evidence that Robert had lost the ability to reason at a high level for up to six months before he died. Robert had $42,000,000 worth of assets at the time of his death with half of the value being minority interests in various privately held businesses that were retaining earnings and not issuing dividends to the shareholders.
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Robert was a domiciliary of Louisiana at the time of his death. Robert’s longtime close friend, Tommy, probates the properly executed Last Will and Testament of Robert, which was in Tommy’s possession and named Tommy as executor of Robert’s estate. The will was dated as of February 16, 2013. The will left the entirety of Robert’s estate, via a trust, to Robert’s only two legitimate children (Jack and Jill, who are both 35 years old) from his first marriage. By October 1, 2019 nothing had been distributed and Robert’s estate was inundated with problems:
Issue A) Robert’s divorced wife Janice (the mother of Jack and Jill) has made a formal claim against the Estate of Robert because starting in December of 2018 Tommy stopped the monthly autodraft out of Robert’s bank account that was paying Robert’s $20,000 monthly alimony obligation to Janice that was issued by the state of Colorado and purported to be owed by Robert for Janice’s life. Janice demands the estate fund an annuity for her expected lifetime pursuant to the Single Life Expectancy Table and make all back-payments from December of 2018 through the present day. Tommy’s position is Janice can go “pound sand”.
Issue B) Robert’s widow Sarah (who he was married to for nineteen years before his death
but estranged from for the final ten years of his life) brought a claim alleging that the marriage contract she entered into with Robert before their nuptials was invalid because she was on cocaine and opioids at the time she executed the marriage contract and she therefore lacked contractual capacity. She claims her interest in the community property is worth $15,000,000 and claims a ‘marital portion’ in the alternative.
Issue C) Robert’s girlfriend Debbie, who lived in Texas, alleges that Robert was her
common law husband because he would periodically stay at her house for many months at a time over the ten-year period they were a couple and he would publicly hold her out as his wife when they would go to the bar by her house. She brings a claim seeking to enforce whatever rights she may be found to have as a common law wife.
Issue D) Robert’s nurse Peter has a $7,500,000 promissory note that purports to be “for
value received” and “payable on demand” and issued from Robert (under private act with no witnesses or notary) to Peter just one month before Robert died. Peter cannot explain to anyone’s reasonable satisfaction why Robert gave him this note but he has filed a claim against the estate to collect on the note.
Issue E) Robert’s alleged 22-year-old illegitimate son, David, who is a citizen of Oregon,
intervenes into the Louisiana action and alleges he is a forced heir under Louisiana law and demands his forced portion. Robert never acknowledged David or even knew David existed before his death, but ‘23 and me’ tests have concluded that David (who was an orphan and never knew his mother or father) is the biological son of Robert and David now demands more formal testing be ordered by the court and that he be treated the same as Jack and Jill.
Issue F) Robert’s pastor, Joe, says that six months before Robert’s death Robert made a
verbal promise in front of the entire congregation that on his death he was going to leave a legacy of $5,000,000 to the church. Tommy was a member of this church and was present when Robert made this pledge, so he knows for certain that Joe is telling the truth.
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Issue G) Robert’s sister, Dana, says that five months before Robert’s death Robert promised he was going to leave her $1,000,000 in his estate. She wants to enforce that promise against the estate even though the Last Will and Testament made no mention of her at all and she has sent a demand letter to Tommy but has not intervened in the estate.
Issue H) Robert’s off the records sports betting agent, Arturo, brings a claim that Robert owed him $250,000 in unpaid debts for bets Robert lost. Sports betting was illegal at the time Arturo claims Robert incurred the debt, but Arturo has several witnesses who can verify the bets were made by Robert.
Issue I) As of October 1, 2019, Tommy has not remitted any estimated tax payment or
filed a Form 706 estate tax return or sought any formal extension from the IRS beyond sending them a series of letters outlining his problems and stating that the small businesses that Robert owned an interest in will not cooperate with his estate appraisers and that Tommy can’t get any liquidity to pay any estate taxes anyway because the value of the estate is tied up in non-liquid businesses that are not making any distributions. Tommy further promises in his letters that he will get an estate tax identification number soon. The Service has not responded to any of Tommy’s letters and has yet to reach out to Tommy in any way whatsoever. Tommy did call the “IRS Help Line” and after hearing all of this the IRS help line representative (Jonathan) told Tommy “hey dude, sounds like you got some problems, hahaha, don’t worry about it, hahaha, you just settle up those problems with the Louisiana state courts and you can file that Form 706 with us later, hahaha, can’t wait to hear how this all turns out, hahaha”. Tommy clandestinely recorded the conversation.
Issue J) Tommy has learned that Robert did not file any state or federal tax returns at all
Tommy knows that Robert was a bit of lush and that Robert frequently told people whatever they wanted to hear. Despite that, and the pledge made to Joe, Tommy believes fully that Robert intended to leave everything he had to Jack and Jill and Tommy desires to see to it that this result happens. Tommy also wants to be paid for his time serving as an executor of the estate. Robert made no provision for how Tommy was to be paid and the will did not say Tommy should not be paid; it was simply silent on executor compensation.
With the above fact pattern in mind, Tommy has come to your law firm seeking aid and advice
on October 1, 2019. You are a first-year attorney (you were a practicing CPA before going to law school and your CPA license is also current) and the managing partner in your firm has come to you and said you are fully in charge of this case and told you to go “sign Tommy up and work the file”.
Students: There is no strict format for your essay to follow. The below questions are just a guide and some suggestions of things you should ask yourself to provide a good essay response.
1. What is the first thing you, as a professional who is being given a brand-new file for a brand- new client, should do? Explain why.
2. How do you advise Tommy to proceed?
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3. Can Tommy be paid for serving as executor? How would payments to Tommy be determined under Louisiana law?
4. Assess and rank Tommy’s problems from most significant to least significant and identify which problems need the most immediate attention and which ones are potentially the biggest long-term problem.
5. Can you utilize a minor problem in some way to help with the more significant problems? How?
6. Who all is entitled to something for certain out of Robert’s estate?
7. How do you think a court of law would react to this case and who is the court of law most likely going to want to help and/or protect and who is the court of law likely going to be suspicious of?
8. What are the meaningful differences between Joe and Dana’s respective claims?
9. What, if any, value is the phone call between Jonathan to Tommy? What is the phone number to the IRS Help Line and how did you find it?
10. What, if any, liability does Tommy have to David and what should Tommy do as to David?
11. Can Janice keep collecting alimony after Robert died?
12. What, if any, liability do you have as a professional in getting involved at this juncture to help Tommy?
13. Can you estimate what the estate taxes should be and when should they be paid? What happens to the estate tax obligation if Sarah wins her claims (Issue B)?
14. What other thoughts do you have regarding this fact pattern on ways to help Tommy sort through these various issues?