Thursday, August 13, 2020

An Estate Attorney's Ambiguous Trust Reformed

The Mississippi Supreme Court affirmed a Court of Chancery decision to reform a trust

This appeal arises from the DeSoto County Chancery Court’s reformation of a trust based on the court’s finding that a scrivener’s error had occurred in drafting the trust instrument, which rendered the trust’s language ambiguous and thwarted the grantor’s intent.

Ironically, the grantor

Barry Christopher Blackburn, Sr. (Barry), an estate-planning attorney, died on March 21, 2014, from cancer. Ten days before he died, Barry executed “The Barry C. Blackburn, Sr. Revocable Living Trust” to provide income and principal to himself during his lifetime and then income to his only son, Barry Christopher Blackburn, Jr. (Christopher), during Christopher’s lifetime.

The reformed trust corrected an alleged drafting error that in effect disinherited the testator's blood family when Christopher died. 

Evidence at trial

[Paralegal] Archer testified that she was the primary person to draft estate-planning documents for Barry. She “pulled forms from other existing wills and trusts” and utilized a “cut and paste” system from a “forms” folder comprised of existing estate-planning documents. Archer said that Barry did not “personally prepare a will or a trust” for anyone, and he did not pay close attention to the language and did not “read documents word for word.”

And

Davis, one of Barry’s best friends from law school, who often worked with Barry, testified that Archer drafted all of the documents for Barry. He said that Barry reviewed his documents “quickly” and “sloppily.” Davis said it would not surprise him “if there was a drafting mistake in one of [Barry’s] own estate planning documents.” He said Barry would just do a quick review when he was reading and “just flip through them.”

The Tennessean reported on the dispute

A dispute over an estate passed down through generations in one Tennessee family is pitting two Nashville Christian institutions in a bitter legal battle against three young children.

Nashville Christian School and Harpeth Presbyterian Church say they are two of the rightful beneficiaries to hundreds of acres of farmland and properties across Alabama, Mississippi and Tennessee, some of which have been in the Blackburn family since the War of 1812.

Joined by the University of Mississippi and a dog rescue organization, the four nonprofits are fighting to wrest the estate away from three children, ages 3, 8 and 13, who would be the sixth generation to inherit the family lands.

Much of the property, now worth millions, has been inherited by each succeeding generation since a Blackburn was granted the land by President Andrew Jackson in the 19th century. Gideon Blackburn, a preacher, founded Harpeth Presbyterian Church in 1811.

Barry Blackburn Sr., the last to inherit the land, died in 2014 at age 48. In his will, the properties were to be held in a lifetime trust for his son, Christopher, then pass to Christopher's children.

But in 2015, Christopher Blackburn died, childless, at age 21.

That's when the estate got complicated.

What Barry Blackburn's will said

The will, written during Barry Blackburn's dying days, said should his son die before him, the trust would pass to Barry Blackburn's sister's three children.

The will also said if there were no surviving beneficiaries of the estate, then it would be equally divided among Nashville Christian School, Harpeth Presbyterian Church, the University of Mississippi law school and Boykin Spaniel Rescue.

The charities were included only as part of a "failure of beneficiary" clause common in many wills to designate inheritors in rare instances when there are no living beneficiaries, the trustees of the estate said.

The nonprofits, however, have argued that the will, read literally, gives the family's property to them.

Had Barry Blackburn's son died before he did, the estate would have gone to the nieces and nephew, they said.

But since Blackburn's son died after him, the estate belongs to the nonprofits, not the children, they argued.

A Mississippi judge disagreed, siding with the children. 

Last year the judge ruled that the estate rightfully belonged to the surviving nieces and nephew. He concluded there had been a "scrivener's error," a simple and accidental clerical error that omitted two words from the will.

Barry Blackburn's intent, the court ruled, was to say if Christopher predeceased his father, "or died," the entirety of his estate would go to his nieces and nephew. He ordered the two words to be incorporated in the will.

The order cited testimony from two of Barry Blackburn's assistants, who helped draft the will and took responsibility for the error. The assistants introduced notes they wrote from conversations with Barry Blackburn that reflected he wanted the properties to remain with family. Two financial consultants testified Barry Blackburn told them he wished to keep the money in the "bloodline" and that the charities were included only as a "catastrophic or catchall clause."

Another friend testified that Barry Blackburn's philosophy was to leave assets to "heirs in the bloodline and all humans had to be dead before the charities received anything."

Also complicating the dispute is the estate being contested by Christopher Blackburn's family. Barry Blackburn and Christopher Blackburn's mother divorced. But Christopher Blackburn's surviving relatives, including his aunt and mother, are now party to the dispute. An appeal of the judge's ruling has been filed by Christopher Blackburn's estate.

The nonprofits have joined the appeal of the ruling to the Mississippi Court of Appeals.

"I understand the motivation of the other parties, but from an emotional perspective it's surprising," said Rebecca Lowry, Blackburn's sister and mother to the three children who stand to inherit the estate.

"It's surprising on a human level. When I think about the fact these organizations that have been meaningful to our family are now fighting our family — they're fighting three young children — it doesn't feel fair."

Connie Jo Shelton, president of Nashville Christian School, did not respond to a request for comment. 

George Nolan, a member of Harpeth Presbyterian Church, referred questions to Cal Mayo, an attorney for the University of Mississippi who also is representing the other three organizations. Mayo declined comment, saying he did not have sufficient time to confer with his clients in order to provide it. 

Thus far, only the attorneys and trustees have benefited from the estate, which has paid their legal fees. Those lawyers also have petitioned the court to order Blackburn's estate to pay their fees as they pursue an appeal against the ruling in favor of Lowry's children.

Lowry said the dispute is particularly tough because of the family's longstanding ties to the institutions vying for the estate.

Lowry and her late brother attended Nashville Christian School. Barry Blackburn was schoolmates with Shelton, the school's president. Shelton's father was the late Blackburn's football coach.

Lowry and Blackburn were baptized at Harpeth Presbyterian, the church founded by their 19th-century ancestor. It was the church where Lowry married her husband.

And Blackburn is an alumnus and donor to the University of Mississippi.

Experts say such disputes involving charitable organizations are not uncommon, particularly when there is ambiguity involved.

"In the case of those organizations it's very much seen as a sort of obligation on behalf of the cause they are supporting to make sure they are receiving their legal claim," said Hannah Smith, an attorney specializing in estates with the Sherrard Roe Voigt & Harbison law firm. Smith is not involved in the dispute.

Smith also said that in estate disputes, courts "really look to the intention of the person signing the will or trust. That is the paramount thing."

Although Blackburn lived in Mississippi at the time of his death and Lowry and her children now live in Michigan, the family has deep roots in Tennessee.

The family includes Henry Hudson, one of the early developers in Nashville.

Lowry's uncle, Bill Barkley, is a prominent Nashville real estate developer who has been instrumental in the development of the Gulch.

And Lowry and Blackburn's late father, Stephen Blackburn, served as an assistant commissioner for the state Department of Health.

The properties include working farms in Mississippi and Alabama and acres of property along Pickwick Lake along Tennessee's southern border.

Lowry said the dispute holds a sense of irony to her because her late brother was a professional estate planner.

"If it comes down to winning at all costs when someone dies, isn't that a motivation to make sure we all have tight final plans?" she said.

Tennessee Encyclopedia recounts the story of Gideon Blackburn. (Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2020/08/the-mississippi-supreme-court-the-tennessean-reported-on-the-dispute-a-dispute-over-an-estate-passed-down-through-generatio.html

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