TRUST & ESTATES I – LOVE
I. OVERARCHING THEMES
A. Dead Hand Control (T’s Intention) vs. Freedom of Choice (Liberty) of Living – MAKE ARGMT AT POINTS WHERE T IS HINDERING EFFICIENT USE OF PROPERTY OR BURDENING INDIVIDUAL RIGHTS
B. Testator’s Freedom vs. “Right” of Wife & Kids to get $$ – ARGUE AT EVERY TURN
1. LESLIE ARTICLE –
2. OTHER LIMITS – Elective Share;
C. Lawyer’s Ethical Obligations – WATCH FOR CONFLICTS ON EXAM
1. RULE 1.6 – CONFIDENTIALITY – (a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent or the disclosure is impliedly authorized in order to carry out the representation.
2. RULE 1.7- CONFLICTS – Gen. Rule – (a) Except as provided in paragraph (b), a lawyer shall not rep a client if rep involves a concurrent conflict of interest which exists if:
a. (1) rep of one client will be directly adverse to another client; or
b. (2) there is significant risk that rep of one will be materially limited by responsibility to another client, former client or a third person or by a personal interest of the lawyer.
3. (b) Notwithstanding conflict in (a), a lawyer may represent a client if:
a. (1) lawyer reasonably believes he will be able to provide competent & diligent representation to each affected client (objective);
b. (2) rep is not prohibited by law;
c. (3) rep does not involve same litigation or other proceeding before a tribunal; and
d. (4) each affected client gives informed consent, confirmed in writing.
D. 4 CORNER TEST vs. EXTRINSIC EVIDENCE (PER) – When will or trust language plain or unambiguous, many courts will not allow extrinsic evidence to be considered in interpretation. (USE GlomcekMajority v. Dissent for example & Barcelo)
1. Statutes – Some courts apply same rule when statute language unambiguous or plain & do not allow consideration of legislative history.
E. BRIGHT LINE vs. FLEXIBLE STANDARD –
II. INTRODUCTION OF ESTATES
A. LIVING VS. THE DEAD – Who gets that straight cash?!
1. Shapira – Only Marry A Jew Case – Extent of allowable dead hand control
a. Dad conditions both of his sons will bequests on marrying a Jewish girl with two Jewish parents. If it does not happen w/in 7 years of death, then money to State of Israel. One of the son challenges the will.
b. Const’lity – Claim of violating fundamental right to marry guaranteed by 14th Amend. Due Process. P argues Shelley in that court, by recognizing this will, has enforced the document therefore constituting state action. Ct distinguishes here since not “enforcing” anything. P not forced to marry. Ct not forcing. No restrictive action. No natural right to inherit property by will.
c. Pub Policy – P claims partial restraint on marriage. Not total, P can marry. Must look to reasonableness. Balancing test.
i. Precedent – Great weight says religious restrictions are reasonable. Plenty of Jews to choose from! Distinguishes case where condition only gave P 5 or 6 dudes w/in local area to choose from. Ct notes that today w/ phones & planes, P can find a Jew.
d. No college – By making him marry so fast, may hurt his college education
i. Ct holds 7 years is plenty of “grace period” to get things done.
e. FORK IN LAW – In re Feinberg – Found same Jew clause unreasonable restraint.
f. We must honor testator’s intention w/in limitations of law & pub policy
2. Terms – Devise – (Trad) – Disposition of real property
a. Legacy – (Trad) – Disposition of money
b. Bequest – (Trad) – Disposition of personal property
c. Today, all three words are often used loosely & interchangeably by courts.
3. Reasonableness – Total restraints are almost always “unreasonable”.
a. Exception – Limiting $ if spouse gets remarried. Support purpose (new hubbie/wife = support) makes it reasonable.
b. Time & Available Options (similar to restraint of trade) – Courts will look to see if a reasonable amount of time is given to accomplish T’s conditions or that conditions do not last too long. Courts also looks to see that it is not a de facto total restraint in that beneficiary’s options make it so it is total or nearly total restraint. Need reasonable opportunity.
i. IE – Can only marry voodoo princess born in April.
c. Effect of communication/technology – Allows for a wider net in “reasonable opportunity.” Facebook may allow you to get in touch with hundreds of voodoo princesses born in April & planes can take you there.
4. Objective Motive – Courts normally do not & cannot determine subjective motive, unless explicit in terms of will. Normally reasonable, objective interpretation.
5. Restrictions Forcing Action – If T had required P to get divorced or to change religions, it is normally found against public po
hers/advisors (educating clients of available options).
a. If you wind up in court, even if you win, as an estate lawyer, you have lost
2. Confidentiality – Privilege keeps you from discussing substance.
3. DUTIES TO CLIENTS – Hotz – Representing Dad & Daughter Case
a. Dad made some changes after told daughter different things, disinheriting her of some property. Daughter came to talk with lawyer. Dad said discuss only original will. Lawyer had also done daughter’s tax returns & drafted her will.
b. Court reversed grant of sum judgment & found a factual issue on whether fiduciary duty existed since Lawyer may have owed daughter duty. If he did, he put Dad’s interests ahead of her interests which equals breach of duty. Also vicarious liability for misrepresentation since lied to daughter at request of Dad.
c. Fiduciary Duty – Special confidence. Atty-client is per se fiduciary, but may differ in scope depending on circumstances. Must keep client’s interests first.
4. DUTIES TO THIRD PARTY BENEFICIARIES – Barcelo – Duty to GC Beneficiaries FORK IN LAW
a. Lawyer drafted crappy trust. GC beneficiaries under trust settled with C’s for less $$ than if trust was valid. Filed action for breach of duty to 3rd party benes
b. Ct held no tort liability (no duty) since no privity (MINORITY RULE) b/w attys & 3rd party benes.
i. POLICY – Unlimited liability for lawyers! People coming out of woodwork saying “You mistakenly forgot to put me in T’s will!!”
(1) Could hurt T’s since lawyer will not only be looking out for their interests, but will be forced to think of all potential 3rd party benes.
(2) Even duty to limited benes bad. Problems of intent & extrinsic evidence. How to say whether dead T really wanted it this way. IE – unexpected death with unsigned will. Could have been due to atty’s sloth or T wanted to think some more. A lot would turn on speculation about dead T’s intentions.