Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Saturday, March 4, 2006

Leading Casebook Reports that Marshall Taught at Yale

J. Howard Marshall's (Anna Nicole Smith's deceased husband) relationship to Yale Law School is discussed in Jesse Dukeminier, Stanley M. Johanson, James Lindgren, Robert H. Sitkoff, Wills, Trusts, and Estates, at 194, n. 11, which contains an excerpt of Marshall v. Marshall, 275 B.R. 5 (C.D. Cal. 2002), opinion which at *11 states:

Born in 1905, J. Howard attended private schools in the northeast part of the United States, including the George School, an exclusive New England prep school, Haverford College, an elite liberal arts college, and Yale Law School, one of the nation's leading law schools, from which he graduated magna cum laude in 1931. Although he often derided his undergraduate liberal arts education, he took great pride in the legal training he received at Yale. Upon graduation, he worked as an associate in a New York firm for two years. Subsequently he returned to Yale Law School to teach and later became the Assistant Dean. [FN5]

One of the subjects he taught at Yale was wills and trusts. Surely he did not realize at the time that these same subjects would take up large portions of his  later life, and dominate his family's affairs for more than six years after his death.

March 4, 2006 in Current Events | Permalink | Comments (0) | TrackBack (0)

Friday, March 3, 2006

Some Evidence Marshall Taught Wills & Trusts at Yale

In the continuing investigation of whether J. Howard Marshall (Anna Nicole Smith's deceased husband) actually taught Wills and Trusts at Yale Law School, consider the following:

Special thanks to David S. Luber for bringing this article to my attention.

Is there anyone out there at YLS who could check this out??

March 3, 2006 in Current Events | Permalink | Comments (1) | TrackBack (0)

Message for Law Professors -- Call for News

The following is from Prof. Sitkoff:

Dear All:

The Spring 2006 newsletter for the Donative Transfers section of the AALS is now being prepared.  Please send me your news:  publications, appointments, promotions, or anything else of that might be of interest to your colleagues.

Many thanks,

Rob Sitkoff

Robert H. Sitkoff
New York University School of Law
40 Washington Square South
New York, NY  10012
(212) 992-8845
(212) 995-4760 (fax)

March 3, 2006 in Teaching | Permalink | Comments (0) | TrackBack (0)

Thursday, March 2, 2006

Howard Marshall & Justice Douglas Co-Authored Article

In the continuing saga of tracing the academic legal career of J. Howard Marshall, it has been confirmed (thanks to the help of Prof. Joel C. Dobris of the University of California) that he, along with Supreme Court Justice William O. Douglas, published an article entitled A Factual Study of Bankruptcy Administration and Some Suggestions, 32 Columbia L. Rev. 59 (1932).

March 2, 2006 in Current Events | Permalink | Comments (2) | TrackBack (0)

Prof. Marshall of Yale -- Truth or Urban Legend?

There are rumors circulating in print and on the Internet that J. Howard Marshall, the deceased husband of Anna Nicole Smith whose case is currently before the United States Supreme Court, was at one time a law professor at Yale who specialized in wills and trusts. 

I've been able to confirm to my satisfaction that Mr. Marshall graduated from Yale Law School in 1931 and served as an assistant dean.  However, I am uncertain about the validity of the "law professor" and "wills and trusts specialist" part of the claim.

Let me know if you have any good leads!

March 2, 2006 in Current Events, Wills | Permalink | Comments (2) | TrackBack (1)

Beneficiary Controlled Trusts -- Request for Input

Tye J. Klooster of the Chicago law firm of Katten Muchin Rosenman LLP supplied the material below and has requested your thoughts, comments, suggestions, etc.  If you would like to comment, please use the comment feature below.

In recent years the "beneficiary controlled trust" concept has become very popular. Upon the death of the survivor, the trust is basically split into separate shares for the children and maintained in separate so-called "Discretionary Trusts." In the trust, distributions can be made to the beneficiary for his health, education, support and maintenance ("HESM"), or if there is another Co-Trustee who is not the beneficiary, the other Co-Trustee can make distributions for his "best interests" (or for whatever reason). Typically the child has the ability to serve as sole Trustee at say age 30, or appoint himself and another (his best friend or spouse) as Co-Trustees. Note that the beneficiary's children, while contingent remaindermen, are not current beneficiaries of the trust (they have a contingent interest subject to divestment because the beneficiary also has a special power of appointment).

I question whether a trust's spendthrift provision will be respected by a court where the sole current beneficiary is also the sole Trustee, even if the distributional standard is limited to an ascertainable standard such as HESM.

The Restatement Third of Trusts, comment g, provides that if the sole beneficiary is the sole Trustee, the spendthrift provision is not valid and therefore it is subject to creditors (even if limited to HESM).

The UTC was originally silent on this issue, but then in 2004 amended the Code to hold that the spendthrift protection will be upheld in a sole beneficiary-sole Trustee context if the distributions are limited to HESM.

What are the courts saying?

In re Bottom, 176 B.R. 950 (Bankr. N.D. Fla. 1994): "The Florida courts have indicated that a spendthrift trust is defined to be those trusts that are created with a view of providing a fund for the maintenance of another, and at the same time securing it against his own improvidence or incapacity for self-protection. Such a policy is not served by the facts of the case at bar. Because [debtor] is named as the sole Trustee of his own trust, the only one that can guard [debtor] from his own improvidence is [debtor] himself. It is for this reason that the trustee and the sole beneficiary cannot be one in the same under Florida law."

In re McCoy, 2002 WL 1611588 (Bankr. N.D. Ill. 2002): In the case the court held that debtor had too much control over the trust. He was the sole Trustee and the primary beneficiary of the trust (children were also beneficiaries). Distributions were limited HESM. Court held that he alone could determine what was necessary for his HESM; that is, "there is nothing in the Family Trust to prevent Debtor, as trustee of the Family Trust, from making a determination that any particular sumptious luxury or indulgence is required or desirable for his health maintenance or support" . . . . Held, part of bankruptcy estate.

In re Coumbe, 304 B.R. 378 (9th Cir. 2003): Under Arizona law, if the sole beneficiary is the sole Trustee, the trust is not a spendthrift trust.

Morrison v. Doyle, 582 N.W.2d 237 (Minn. 1998): Opposite holding. The court, in relying on many Minnesota statutory rules (which I don't believe we have in Illinois or Florida) basically held that if limited by HESM you have no problem on this issue.

I just worry that in moving toward the "beneficiary controlled trust" concept that we have not focused on creditor protection enough. Rather, most estate planning attorneys focus too much (or only) on estate tax inclusion. If limited by HESM, the power is not a general power and therefore not included in the gross estate. But what about creditor protection? The Restatement and the cases cited above should give us some pause.

It is my belief, at least at the moment, that we should be advising clients of the potential problem with beneficiary-controlled trusts. We should be explaining that these cases exist and that if the sole beneficiary is the sole Trustee a creditor may very well be successful in arguing, particular in outrageous cases (say a tort case or a case where debtor is not respecting HESM), that the trust should be part of bankruptcy estate. We should also advise that if the beneficiary is only a Co-Trustee or the beneficiary's children are also named as current beneficiaries, that these problems go away.

Anytime there is too much control by a sole beneficiary-sole Trustee you are rolling the dice. Perhaps we need to pursue legislation similar to the 2004 amendment to the UTC in our own jurisdictions that allows sole beneficiary-sole Trustee if limited by HESM. This would comport law with current estate planning practices.

In the meantime, clients need to be advised that if they are looking for greater creditor protection the sole beneficiary should not be the sole Trustee.

(Note that comments are moderated, that is, a comment will not appear on this site until the blog editor approves the comment.  This requirement is imposed because the blog editor may be held liable for the publication of comments under the theory of publisher liability. Because of publisher liability concerns, the Law Professor Blogs Network does not allow automatic comment publishing.)

March 2, 2006 in Trusts | Permalink | Comments (6) | TrackBack (0)

Wednesday, March 1, 2006

Attorney Sperm Commands $425 Premium

Group of women brought together by one man's sperm, Lubbock Avalanche-Journal, Feb. 28, 2006, at D6, discusses how women who use the sperm of the same donor for artificial insemination are meeting and bonding.  The article also discusses DonorSiblingRegistry.com discussed earlier on this blog.

According to this article, there is a $425 additional charge to purchase a sample of attorney sperm.  [You can make up your own jokes.]

March 1, 2006 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Maryland Senate Approves Pet Trust Legislation

On February 23, 2006, the Maryland Senate passed a pet trust bill which is modeled after Uniform Trust Code § 408.

See Senate OKs bill allowing pet trusts, BaltimoreSun.com, Feb. 24, 2006.

Special thanks to the Hounded, Cowed, and Badgered Blog for bringing this development to my attention.

March 1, 2006 in New Legislation, Trusts | Permalink | Comments (1) | TrackBack (0)

Bankruptcy and Estate Planners

The  American Bar Association Section of Real Property, Probate and Trust Law and the ABA Center for Continuing Legal Education is sponsoring a 90-minute teleconference and life audio webcast on Thursday, March 23, 2006 entitled The New Estate Planning and Asset Protection Essentials: Practical Implications of the 2005 Bankruptcy Act.

Here is an excerpt from the program's promotional materials:

Think that the 2005 Bankruptcy Act changes don't affect your estate planning practice? Think again—numerous provisions can impact your clients' estate and asset protection planning.

This program will review the provisions of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) that impact estate and asset protection planning. Our experts also will cover recent cases decided under the Act and additional developments regarding self-settled trusts.

Our experienced faculty will explain how BAPCPA affects asset protection and estate planning, answer common questions and detail potential strategies that you can put to use immediately to protect clients' assets in this new environment.  Practitioners of all skill levels will emerge with valuable information and practical planning tips.

March 1, 2006 in Conferences & CLE, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

The Value of Law Blogging

The following is from the Law Librarian Blog:

The National Law Journal has a little piece on blogging titled "Blogging law profs assault ivory tower, Is it scholarship, or a cyber chit-chat?" (Feb. 27, 2007). The article features two Law Professor Blogs Network editors, Paul Caron, editor of TaxProf Blog and co-founder of the Law Professor Blogs Network, and OSU Law Prof Douglas Berman, whose blog, Sentencing Law & Policy, was cited by U.S. Supreme Court Justice John Paul Stevens in State v. Booker, 543 U.S. 220 (2005) in additon to be citing in at least four federal circuit court opinions and more than 10 federal district court opinions.

March 1, 2006 in About This Blog, Scholarship | Permalink | Comments (0) | TrackBack (0)