Learn Trusts And Estates With Me

[Dave1001]

In my effort to repurpose my procrastinations to productive ends, I'm starting a thread here for anyone that wants to learn Trusts and Estates with me. I'm studying it at an American law school. So, I'll post what I think are interesting topics within the Trusts and Estates curriculum, and feel free to weigh in on them, regardless of your own legal education. :)

[Dave1001]

Trusts and estate is a cool class, particularly if you have relatives. I used information I learned from this class (or actually from the prerequisite class I took, Property) in another thread, when I pointed out that one can make inheritance contingent on certain performance goals reached by the beneficiary, such as graduating college, or practicing as a doctor.

[JamesDillon]

So long as any contingent interest must vest or fail within the time of a life in being plus 21 years :)

(That will be stuck in your brain forever, no matter how hard you try to get it out).

[Dave1001]

So long as any contingent interest must vest or fail within the time of a life in being plus 21 years :)

(That will be stuck in your brain forever, no matter how hard you try to get it out).

Is that from trusts and estates or property? I think I remember it from property. Or did you learn it last for the MBE?

I had trusts & estates today. Cool class. Although it helps to have a very cool and entertaining prof.

[JamesDillon]

Is that from trusts and estates or property? I think I remember it from property. Or did you learn it last for the MBE?

I had trusts & estates today. Cool class. Although it helps to have a very cool and entertaining prof.

That's the Rule Against Perpetuities. It comes up in both property and trusts & estates, though I never took trusts & estates so I had to learn it only in property, then again in bar review.

I hated property.

[AmateurScientist]

That's the Rule Against Perpetuities. It comes up in both property and trusts & estates, though I never took trusts & estates so I had to learn it only in property, then again in bar review.

I hated property.

You and me both. I didn't take T&E either, and I was one of the very few in my class who didn't. I recall nearly everyone in my class being under the impression it was a required second year class. It wasn't, and I hated property so much that I wasn't about to return to that seisin and Blackacre crap.

The joke was on me. The MBE had a section in which about 2/3 of the questions were conveyance questions. Ugh. How many times can Blackacre be conveyed, anyway?

AS

[shuize]

This thread has sprung my interest. I may have to come back to it in the future.

[AmateurScientist]

That's the Rule Against Perpetuities. It comes up in both property and trusts & estates, though I never took trusts & estates so I had to learn it only in property, then again in bar review.

I hated property.

You know, you could have learned it by watching Body Heat. As a bonus, you would have seen a 24-year-old Kathleen Turner naked.

AS

[Loss Leader]

I pointed out that one can make inheritance contingent on certain performance goals reached by the beneficiary, such as graduating college, or practicing as a doctor.

Well, I guess you can but you'd basically be guaranteeing your executor a lawsuit.

What I remember about T&E is that my professor told us that everyone thinks they aced the final. It was true. I thought I killed that test and ended up with a grade only slightly above average.

He also told us this (which turned out to be true): Family plus money equals litigation.

[JamesDillon]

Well, I guess you can but you'd basically be guaranteeing your executor a lawsuit.

How so? I know next to nothing about trusts & estates, but I thought Dave's statement was correct (so long as the Rule Against Perpetuities is observed). Do you mean that, in practice, people tend to challenge those kinds of performance restrictions on inheritance?

Edit: I thought I aced the essay question on wills in the NY bar exam. Perhaps, in light of your professor's comment, I've been overconfident about my performance on that question. Oh well-- I passed the test, anyway.

[Loss Leader]

Do you mean that, in practice, people tend to challenge those kinds of performance restrictions on inheritance?

Absolutely. As a general rule, people tend to challenge anything that stands between them and the money.

The better practice, I think, would be to create a trust for the beneficiary that is entirely discretionary for the trustee. Then, you just have to trust that your trustee will hand over the money responsibly. Rather than making a gift contingent on graduating college, make it so the trustee could spend the money on tuition but could withhold the money if benie doesn't go to college.

BTW, as a point of personal curiosity, who among us is the senior partner? I graduated Emory in 1996, admitted in NY and GA, concentrating in family, elder law, education and small business matters (and a little IP).

[AmateurScientist]

It would be so much simpler to make the inheritance contingent on spending one night in the haunted castle.

AS

[JamesDillon]

BTW, as a point of personal curiosity, who among us is the senior partner? I graduated Emory in 1996, admitted in NY and GA, concentrating in family, elder law, education and small business matters (and a little IP).

I'm still the junior associate in this crowd, as in most others. I graduated from NYU in 2003, worked for a couple of years at Gibson Dunn & Crutcher in New York, and am currently clerking for a district court judge in Brooklyn. Admitted in NY only.

[AmateurScientist]

BTW, as a point of personal curiosity, who among us is the senior partner? I graduated Emory in 1996, admitted in NY and GA, concentrating in family, elder law, education and small business matters (and a little IP).

UGA, 1988. Originally admitted to practice in GA, May 1988; admitted in AL, May 1990.

I don't know when Brown was admitted, but it might be before me. Otherwise, I'm probably it.

AS

[Aurelian]

Well, I guess you can but you'd basically be guaranteeing your executor a lawsuit.

What I remember about T&E is that my professor told us that everyone thinks they aced the final. It was true. I thought I killed that test and ended up with a grade only slightly above average.

He also told us this (which turned out to be true): Family plus money equals litigation.

My experience in elder law is:

Families with too little money to fight over don't sue.
Families with plenty of money sue less.
Families with *just enough* money tend to feed the litigators. Which sucks because everyone loses.

And here's your quiz: You have a remarried spouse with a minor teen child from the prior marriage. Remarried spouse has old will naming ex as executor. Remarried couple has not had time to create new wills. Does writing something to the effect of "this is null and void due to remarriage" with a signature & date by the person who had the will drawn up void the will?

Glad you have a good teacher and are willing to put your procrastination time to use!
:)

[Loss Leader]

And here's your quiz: You have a remarried spouse with a minor teen child from the prior marriage. Remarried spouse has old will naming ex as executor. Remarried couple has not had time to create new wills. Does writing something to the effect of "this is null and void due to remarriage" with a signature & date by the person who had the will drawn up void the will?

Did the testator write that across the whole will, just the provision naming the ex as executor or across all provisions naming ex at all?

Does the will leave anything to the ex by name? Does it leave things to "my wife" without a name?

I have about fifty more questions.

[Dave1001]

Well, I guess you can but you'd basically be guaranteeing your executor a lawsuit.

What I remember about T&E is that my professor told us that everyone thinks they aced the final. It was true. I thought I killed that test and ended up with a grade only slightly above average.

He also told us this (which turned out to be true): Family plus money equals litigation.

Ah, well what I learned in class today could be useful. To reduce odds of a lawsuit, one could include a noncontest clause where the beneficiary gets nothing if they contest the will, but gets a modest garunteed sum if they don't contest the will.

[NoZed Avenger]

Did the testator write that across the whole will, just the provision naming the ex as executor or across all provisions naming ex at all?

Does the will leave anything to the ex by name? Does it leave things to "my wife" without a name?

I have about fifty more questions.

Starting with which state (or states -- for fun, he moved to a different jurisdiction between marriages and now we combine choice of law questions) this occurs in.

[Loss Leader]

Starting with which state (or states -- for fun, he moved to a different jurisdiction between marriages and now we combine choice of law questions) this occurs in.

I think the state the testator dies in wins the "interpret the will" contest. The state the tastator was in when he signed the thing wins the "was this will ever valid" race. Maybe the state the testator lived in when he wrote on the will gets a say in whether the writing revokes the whole will or part of it but only if the state of death's revocation laws are less strict than the state of writing on your will.

Oh, by the way, don't write on your damn will. I can't believe how many people just pencil in changes.

[shuize]

What I remember about T&E is that my professor told us that everyone thinks they aced the final. It was true. I thought I killed that test and ended up with a grade only slightly above average.

He also told us this (which turned out to be true): Family plus money equals litigation.

Did he not also tell you his exam would be "bone crushing?"

As I recall, the correct formula is:

Family + Money + Death = Litigation

Although that sounds more like something Professor Freer would say.

[Aurelian]

I think the state the testator dies in wins the "interpret the will" contest. The state the tastator was in when he signed the thing wins the "was this will ever valid" race. Maybe the state the testator lived in when he wrote on the will gets a say in whether the writing revokes the whole will or part of it but only if the state of death's revocation laws are less strict than the state of writing on your will.

Oh, by the way, don't write on your damn will. I can't believe how many people just pencil in changes.


Points well taken, yep, estate law in the US is state-specific, and we're in the same state. Very likely that the testator would die in the same state (knock on wood). We're not trying to change the will, we'd rather risk intestacy than letting The Greedy Control Freak guide the direction of funds for the remaining spouse and afterborn children, as well as performing a job that the remaining spouse has actual training in...so we're hoping to make it to the lawyers office to draw up a will that revokes the prior will (that was drawn up by a lawyer) and get GCF out of the picture. Spouse was more appropriate (friends of the family) when the Living Will, Advance Directive and Durable Power of Attorney were drawn up.

I agree with not writing on the will to *change* it. We want to revoke the
whole damn thing as there are more people involved that would be affected if the testator expires unexpectedly.

Spouse drew up the will after the divorce :eye-poppi and before the GCF showed the true colors...so there are no spousal references. We both need to update now that "his, hers and ours" is so very different than 5 years ago, and have them filed at the county courthouse with the Register of Wills for $5 or whatever the nominal fee is these days. No, we're not planning on moving any time soon.

Thanks for the wisdom and followup LL and NZA.

[Aurelian]

Looks like Dave1001 is not procrastinating...did we make his fun diversion a little too much like work?

[Brown]

I don't know when Brown was admitted, but it might be before me. Otherwise, I'm probably it.Admitted to Iowa, 1983. Admitted to practice before the United States Patent and Trademark Office, 2000.

[Brown]

Ah, trusts and estates. One who studies such matters will never suffer from insomnia.

It's like a mantra:
Oooooooooom!
The intent of the settlor is the polestar....
Oooooooooom!

My experience with trusts and estates is rather limited, but I did have one rather remarkable case. Without going into the details, I will say that there was a certain family that was quite wealthy. It made its fortune almost exclusively through government contracts paid for with taxpayer dollars, but the family itself was adamnatly opposed to paying any taxes itself. Among other actions, members of the family set up an elaborate system of trusts to avoid income taxes, inheritance taxes, probate fees, and assorted other tributes to the gummamint.

The basis for the trusts assumed that the oldest members of the family would die first, and the youngest would die last. When this didn't happen, however, their elaborate system went into a state of near-chaos, and they ended up owing an incredible sum in taxes (including a huge estate tax), all of it owed in a lump sum. As a result, they brought upon themselves many of the events they tried to avoid.

Let this be a lesson for anyone who drafts wills and trusts: Don't assume that people will die in the "right" order.

[Suddenly]

I hated property.

A+

This explains why I am in criminal law. When someone brings up future estates I reach for the nearest blunt object.

[headscratcher4]

I hated property.

Damn Commie.

I hated anything involving the Uniform Commercial Code.

[NoZed Avenger]

I think the state the testator dies in wins the "interpret the will" contest. The state the tastator was in when he signed the thing wins the "was this will ever valid" race.

Is that true by the choice of law rules adopted in *every* state ?

[Dave1001]

Anna Nicole Smith came up in class today and will be featured Monday. Apparently her case was "tortious interference with contract" or some such thing?

[Zombified]

Anna Nicole Smith came up in class today and will be featured Monday. Apparently her case was "tortious interference with contract" or some such thing?
And here I thought she just did softcore Playboy type stuff.

[JamesDillon]

Anna Nicole Smith came up in class today and will be featured Monday. Apparently her case was "tortious interference with contract" or some such thing?

I hate those squishy torts like tortious interference, unjust enrichment, and promissory estoppel (which maybe is contract rather than tort) that get pled all the time and hardly ever have any merit. These were fashioned by the common law courts as escape hatches for the rare situation in which a party suffered a genuine injustice that doesn't quite fall within the scope of any of the better-defined causes of action, but it would be unfair not to provide some kind of judicial relief. What they're generally used for now is the prosecution of frivolous actions by plaintiffs who don't have a valid argument, or inclusion in an overlong complaint as fallback positions in case the court rules against the plaintiff's (possibly meritorious) primary argument.

[AmateurScientist]

I hate those squishy torts like tortious interference, unjust enrichment, and promissory estoppel (which maybe is contract rather than tort) that get pled all the time and hardly ever have any merit. These were fashioned by the common law courts as escape hatches for the rare situation in which a party suffered a genuine injustice that doesn't quite fall within the scope of any of the better-defined causes of action, but it would be unfair not to provide some kind of judicial relief. What they're generally used for now is the prosecution of frivolous actions by plaintiffs who don't have a valid argument, or inclusion in an overlong complaint as fallback positions in case the court rules against the plaintiff's (possibly meritorious) primary argument.

Tortious inference with contract (or with a business relationship, which is slightly different) is a real tort. Just ask Pennzoil and Joe Jamail about Texaco's tortious interference with Pennzoil's agreement to buy Getty Oil. Back in 1985, good 'ole Joe convinced a Texas jury to award his client Pennzoil $10.5 billion, the largest jury verdict at the time, and he made out with a $1 billion payday. Texaco filed for bankruptcy protection under Chapter 11 as a result.

Among other settings, it comes up from time to time in cases in which businesses have hired employees who have recently left a competitor and the employees had non-compete agreements in place before they left. The former employer might have a good cause of action against the new employer if it can show the new one was aware of the non-compete at the time of hiring. Remedies can include damages and injunctive relief. Sometimes it's bogus, and sometimes it's not.

AS

[Loss Leader]

Is that true by the choice of law rules adopted in *every* state ?

Well, it's my first instinct. I'd have to see something different to change my mind.

[JamesDillon]

Tortious inference with contract (or with a business relationship, which is slightly different) is a real tort. Just ask Pennzoil and Joe Jamail about Texaco's tortious interference with Pennzoil's agreement to buy Getty Oil. Back in 1985, good 'ole Joe convinced a Texas jury to award his client Pennzoil $10.5 billion, the largest jury verdict at the time, and he made out with a $1 billion payday. Texaco filed for bankruptcy protection under Chapter 11 as a result.

Among other settings, it comes up from time to time in cases in which businesses have hired employees who have recently left a competitor and the employees had non-compete agreements in place before they left. The former employer might have a good cause of action against the new employer if it can show the new one was aware of the non-compete at the time of hiring. Remedies can include damages and injunctive relief. Sometimes it's bogus, and sometimes it's not.

AS
I'm sure it does have the occasional legitimate application, as do the others I mentioned. It just seems to me that it's much more frequently invoked to shore up a frivolous action.

[NoZed Avenger]

Well, it's my first instinct. I'd have to see something different to change my mind.

Without looking at the specific states, I'd be afraid to say, but I doubt that the state where the testator dies wins the interpretation contest in every case. Essentially because I think that where the probate is filed will untimately control, and that is usually the state where the decedent actually lived. Since that state presumably has the closest contacts with the will itself -- if it was drawn up under those laws, the presumption should be that the decedent wanted it interpreted under those laws -- I think many courts would apply that law to the interpretation.

[AmateurScientist]

Without looking at the specific states, I'd be afraid to say, but I doubt that the state where the testator dies wins the interpretation contest in every case. Essentially because I think that where the probate is filed will untimately control, and that is usually the state where the decedent actually lived. Since that state presumably has the closest contacts with the will itself -- if it was drawn up under those laws, the presumption should be that the decedent wanted it interpreted under those laws -- I think many courts would apply that law to the interpretation.

Probating a will in the state where the testator resided at the time of his death is proper, and that state's law should control absent some bizarre circumstances. Nevertheless, you often have ancillary proceedings in other states where the testator owned real property, and the will must be probated in those states as well in order to get letters testamentary or a court order authorizing the executor to deed the property lawfully. Without researching it and without knowing it off the top of my head, my guess is that in those ancillary proceedings the foreign courts will look to the law of the state in which the testator died, and it will control in the event of a conflict of laws.

(I welcome anyone who cares to research it to correct me. I haven't the interest or the energy at the moment to look into it).

Having said that, I hate conflict of law questions, and they give me massive headaches. I have yet to run into a real world situation in which they didn't give the judges wrestling with them headaches as well.

AS

[NoZed Avenger]

Having said that, I hate conflict of law questions, and they give me massive headaches. I have yet to run into a real world situation in which they didn't give the judges wrestling with them headaches as well.


I *especially* love conflict-of-law questions involving initial choice of law tests on which law to apply after the conflict . . .

Wait . . .

[AmateurScientist]

I *especially* love conflict-of-law questions involving initial choice of law tests on which law to apply after the conflict . . .

Wait . . .

Ha ha. Yeah, that initial conflict arising thing is a real b**ch, huh?

Try having three simultaneous divorce, alimony, and child custody and support proceedings in three states between the same parties. That's loads of fun. Of course, those aren't necessarily so much about conflict of laws questions as much as they are about personal and subject matter jurisdiction (and both kinds of jurisdiction questions arise, often at the same time, often with more than one state having jurisdiction) over distinct issues in the proceedings.

AS

[NoZed Avenger]

Ha ha. Yeah, that initial conflict arising thing is a real b**ch, huh?

Try having three simultaneous divorce, alimony, and child custody and support proceedings in three states between the same parties. That's loads of fun. Of course, those aren't necessarily so much about conflict of laws questions as much as they are about personal and subject matter jurisdiction (and both kinds of jurisdiction questions arise, often at the same time, often with more than one state having jurisdiction) over distinct issues in the proceedings.


Ok, my secret vice is war stories.

I had a case in which my old parter indicated I was a "runner for God." That's a different story.

But the case was brought to us by the father of a young man killed in an automobile accident. I won't get into the fact, but the other driver was cited and convicted of negligent homicide.

The victim's father and mother both signed up as clients. Their main concern was their deceased son's minor children. At the last minute, the victim's ex-wife refused to sign with us, and she had custody of the two children (age 4 and 5). This would not be especially troubling, except that the reason she backed out at the last minute was that she was deeply involved in a small church community run by a charasmatic man with a small, fervent group of follow-

Oh, hell. It was a cult. We knew it was a cult, the gransparents knew that it was a cult, everyone knew it was a cult. The cult leader persuaded her to sign up with a close friend of his -- for a 40% contingency fee (on a death case involving clear liability already adjudicated in the criminal courts). Our clients, the minors' grandparents, were greatly concerned about the kids getting any of the money. The cult leader apparently had almost total control over the ex-wife and she was already giving him more money that she could afford. For our part, we had already agreed to drastically cut our fees -- like in half -- and started out well under a 40% contingecy arrangement.

In fact, we had all but taken a setllement agreement in the case , and the cult leader's friend's only action in the case was a letter telling us that he was representing her. He did nothing else, but was demanding 40% of any settlement (that he did nothing for).

So. The father (our client) lived in Texas, the mother in Lousisana. The ex-wife and kids lived in Kentucky. The deceased was living in Louisiana at the time of the accident, hired by a Kentucky firm while he was visiting his dad in Texas, and had the accident in Ohio. (These are a more than a few years old and from memory, so I may have a venue changed in one spot or another, but it is essentially correct).

Just about my happiest moment as a lawyer: research showed that in Lousiana, the estate of a decedent could bring suit on behalf of *all* the potential beneficiaries. This would include the children. We had the grandmother bring an action in probate and then had the estate file the lawsuit on behalf of everyone. We then had everyone -- including the probate court and an ad litem -- admit that the settlement was a good one (the cult-leader's attorney was so eager to get the money that he agreed to the amount almost before we finished asking). After that, we put the money into the registry of the court and requested that a guardian be appointed to make sure that the money was invested safely and that children actually received the money. We also asked that the cult leader's friend get nothing.

The judge enjoyed that bit. So did the grandparents. The cult leader (who appeared to offer moral support for the mother), not so much.

The other "lawyer" had never bothered to check on the law in Lousiana reagrding the estate, and was caught unprepared with no real argument.

That case still gives me a warm feeling at night.

[Dave1001]

Awesome story, NoZed.

This is a question out to all the lawyers, law students, and law autodidacts: how would you explain intestacy in your own words?

[Thinking in CT]

Awesome story, NoZed.

This is a question out to all the lawyers, law students, and law autodidacts: how would you explain intestacy in your own words?
Dying without a valid will.

[Dave1001]

Dying without a valid will.

My chapter title on intestacy is "Intestacy: An Estate Plan By Default". The default is just that your property is distributed to your closest relatives, right? But along a parentilinial type way I believe. I need to read over that and make sure I understand it.

[Darat]

...snip...

Let this be a lesson for anyone who drafts wills and trusts: Don't assume that people will die in the "right" order.

"Don't assume that people will die in the 'right' order." - Hmm if you weren't a high-fa-luting lawyer I'd suggest that sounds like you were saying you should plan so people do die in the right order.... ;)

[Darat]

Ah, well what I learned in class today could be useful. To reduce odds of a lawsuit, one could include a noncontest clause where the beneficiary gets nothing if they contest the will, but gets a modest garunteed sum if they don't contest the will.

Can you put such a clause in a will? Or rather since obviously you can write such a clause - would it be enforceable?

[NoZed Avenger]

My chapter title on intestacy is "Intestacy: An Estate Plan By Default". The default is just that your property is distributed to your closest relatives, right?

If there is no will, the state statutes on the subject will control. The laws vary somewhat by state regarding the order of preference, however, and the way the money is split.

[Dave1001]

Can you put such a clause in a will? Or rather since obviously you can write such a clause - would it be enforceable?

I'm pretty sure no-contest clauses of some type are enforceable in every American jurisdiction, am I right?

Also, there must be some sort of model wills, trusts, and estates code. And I'm pretty sure it has an enforceable version of the no-contest clause that's allowed, too.

[Dave1001]

If there is no will, the state statutes on the subject will control. The laws vary somewhat by state regarding the order of preference, however, and the way the money is split.

But they all determine that the money goes to relatives, right? spouse, kids, cousins, etc.

But is there some type of laughing beneficiary test, where if the relatives are so far removed, the money goes to the state, instead, in some or all jurisdictions?

[Loss Leader]

Ha ha. Yeah, that initial conflict arising thing is a real b**ch, huh?

Try having three simultaneous divorce, alimony, and child custody and support proceedings in three states between the same parties. That's loads of fun. Of course, those aren't necessarily so much about conflict of laws questions as much as they are about personal and subject matter jurisdiction (and both kinds of jurisdiction questions arise, often at the same time, often with more than one state having jurisdiction) over distinct issues in the proceedings.

AS


Please. I just wrote a memo of law regarding an exception to an exception to an exception under the UCCJA or whatever the hell they're calling it these days. The mother and father had lived in NC. When the baby was 4 months old, the mother moved to NY and the father moved to FL. Thre months later, the father brought a custody proceeding in NC and the mother brought one in NY on the same day.

Needless to say, I won. Why? I'm just that good.

[Loss Leader]

Can you put such a clause in a will? Or rather since obviously you can write such a clause - would it be enforceable?


In terrorum clauses are valid in every US state. Incidentally, the latin phrase actually means "in order to instill terror."

[Darat]

...snip...

Needless to say, I won. Why? .....

.... by default because everyone else collapsed with a splitting migraine?

[shuize]

...snip...

Needless to say, I won. Why? .....
Because this is the internet and you can say whatever you want?

[AmateurScientist]

Because this is the internet and you can say whatever you want?

That's right. I just kicked Jessica Alba and Kate Hudson out of bed. Why?

Because even on the internet I'm a dumbass.

AS

[Dave1001]

I'll be studying Trusts and estates from now until at least 8pm EST. maybe until 10pm.

[shuize]

That's right. I just kicked Jessica Alba and Kate Hudson out of bed. Why?

Because even on the internet I'm a dumbass.

AS

Hey, wait a minute. Jessica Alba and Kate Hudson? That's sounding a bit suspicous. Are you sure your bed's even big enough for three people?

[Dave1001]

I imagine there's going to be a great discussion about Anna Nicole Smith and her lawyer/baby daddy/fiance Howard K. Stern today in Trusts and Estates. Makes me wish I was in Professional Responsibility this semester, too.

[Blutarsky]

DET...the bane of my law school experience. That along with Family Law, Corp Law and Civ Pro...zzzzzzzzz...I'm sorry did I doze off...