Wills, Trusts & Estates Prof Blog

Article: The ‘Pallant v Morgan Equity’ in Australia: Substantive or Superfluous?

Ying Khai Liew and Cristina Poon recently published an article entitled, The ‘Gallant v Morgan Equity’ in Australia: Substantive or Superfluous, Australian Property Law Journal, 2002. Provided below is an abstract of the Article:

The ‘Pallant v Morgan equity’ is a relatively new but well-entrenched constructive trust doctrine in English law. However, its precise status in Australia is uncertain. This paper asks whether the Pallant v Morgan equity is a superfluous or substantive doctrine in Australia. It explores four different equitable doctrines which judges have at one point or other suggested can account for that doctrine, and comes to the conclusion that it is not simply a manifestation of those established doctrines and therefore superfluous in Australian law, but a substantive doctrine with a distinct sphere of application. The paper then discusses the justificatory rationale of the Pallant v Morgan equity, and observes how that justification provides normative ground for understanding the equity as a distinct doctrine.

Article: Freedom of Testamentary Disposition

Paul B. Miller recently published an article entitled, Freedom of Testamentary Disposition, Oxford University Press, Philosophical Foundations of the Law of Trusts, Forthcoming. Provided below is an abstract of the Article:

American law is notoriously solicitous of property owners’ testamentary freedom. Interpretive theorists cannot but acknowledge its centrality to enabling law. Yet freedom of testamentary disposition has attracted criticism on normative grounds for centuries. Indeed, it is widely viewed as one of the most tenuous of incidents of private ownership.

This chapter examines leading arguments offered in defense of wide testamentary freedom of the sort found in American trust law. Viewed, as it has been, within conventional frames of the morality of property – its central preoccupations with autonomy, need, scarcity, and equality – testamentary freedom is widely considered morally suspect. And, indeed, as I explain, arguments from property conventions, autonomy, social utility, and obligations of provision each fail to show that laws enabling wide testamentary freedom are morally defensible.

In the chapter I suggest that testamentary freedom can be defended more robustly on the footing of the morality of gift relationships, with particular attention to the value of testamentary benefaction in enabling the expression of moral motivation, the practice of virtue, and realization of goods essential to the flourishing of a testator’s intended beneficiaries. An advantage of this approach is that it recognizes moral complexity, allowing one to appreciate the value of dispositions that track the focal moral and legal sense of benefactions as gifts, while at the same time pinpointing ways in which some dispositions prove morally defective as gifts despite their legal validity (e.g., spiteful or malicious disinheritance, wasteful or harmful inheritance) and accommodating side constraints responsive to concerns surfaced within the morality of property (e.g., regarding the interests of future generations, and the impact of inheritance on distributive justice). 

Article: When Beneficiaries Predecease: An Empirical Analysis

Adam J. Hirsch recently published an article entitled, When Beneficiaries Predecease: An Empirical Analysis, Emory Law Journal, 2022. Provided below is an abstract of the Article:

Under current law, bequests to beneficiaries who predecease the testator “lapse” to the beneficiary of the residuary, unless they are preserved for the descendants of predeceased beneficiaries under an “antilapse” statute. The beneficiaries covered by antilapse statutes vary from state to state, but in most states today the statutes apply only to blood relatives of the testator as distant as first cousins. This Article examines the public policy of antilapse statutes, assessing them by undertaking the first-ever survey of popular preferences concerning the matter. Harvesting evidence for five types of beneficiaries, the study finds that the prevailing structure of antilapse statutes is both over- and under-inclusive. On one hand, among beneficiaries who comprise blood relatives, most respondents prefer to create substitute bequests only for descendants of predeceased children. Lawmakers should strike other relatives from the statutes’ coverage. On the other hand, most respondents would create substitute bequests for their descendants if their spouse predeceased them. Lawmakers should extend the range of the statutes accordingly. Finally, the Article advocates enhancing courts’ power to deviate from mechanical rules of lapse in situations where testamentary intent is less predictable.

 

Iowa Supreme Court: Surviving Settlor Cannot Modify Irrevocable Trust Without Court Approval

Last month the Iowa Supreme Court concluded that a surviving settlor of an irrevocable trust cannot modify the dispositive terms without court approval.

In Iowa, a trust agreement executed after July 1, 2000 is presumed revocable and can be modified or revoked by the settlor unless the terms state that it is to be irrevocable. Iowa Code provides that an irrevocable trust can be modified with the consent of the settlor and all beneficiaries, which must include all of the settlors, not just the surviving settlor.

Another option is for a surviving settlor to modify the irrevocable trust with court approval, even if all beneficiaries consent to the change.

For more Information:

See “Iowa Supreme Court: Surviving Settlor Cannot Modify Irrevocable Trust Without Court Approval”, Probate Stars, May 2022.

Los Angeles Chargers owner is sued by his sister in a legal battle for control of the franchise

Dean Spanos is being sued by Los Angeles Chargers co-owner and sister, Dea Spanos Berberian, for control of the family trust that owns the largest share of the franchise. 

The siblings were named co-trustees of the trust after the deaths of their parents in 2018. The family trust holds a 36% ownership stake in the team. Separately, each of the four Spanos children own 15% of the Chargers with the remaining 4% being owned by parties outside the family.

Berberian is accusing her brother of going against their parents wishes and behaving in a misogynistic manner and breaching his fiduciary duty in his role as controlling owner. In response, Dean and the other Spanos siblings, have released a statement that they stand united in honoring their parents and grandparents’ wishes in ownership and operation of the team.

This week, Berberian has agreed to allow the NFL to arbitrate the manner.

For more Information:

See Kevin Dotson, “Los Angeles Chargers owner is sued by his sister in a legal battle for control of the franchise,” KTVZ News, June 10, 2022.

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

COVID-19 Is Motivating Americans to Get a Will – Especially After Contracting COVID-19

The COVID-19 pandemic served as a wake-up call for many Americans, especially regarding end-of-life planning. 

According to the survey question “Did your loved one have a will before dying of COVID-19?” only 22.6% responded with Yes, 17.6% responded that their loved one had a living trust, and 15.8% had a different estate planning document in place.

Now, nearly half of those who had a serious case of COVID-19 are much more likely to have a will than those who have not experienced the virus. This includes an increase with 18-34 year-olds, who have been motivated by the pandemic to take further steps to obtain estate planning documents.

For more Information:

See Daniel Cobb, “1 in 5 People Who Died of COVID-19 Did Not Have an Estate Plan,” Caring.com, June 2022.

Directions to Trust Directors of Directed Trusts

Directed trusts have been gaining popularity in recent years as many states allow someone other than the trustee the power over some aspect of a trust’s administration. The Uniform Law Commission introduced the Uniform Directed Trust Act (UDTA) to provide clear guidelines that allow a settlor to structure a directed trust for any situation while preserving safeguards for beneficiaries.

The increasing number of variables that go into estate planning mean directed trusts are more important than ever. Understanding the governing law and situs for a directed trust and how they vary by jurisdictions is paramount.

For more Information:

See Michael A. Sneeringer and Jordan D. Veurink, “Directions to Trust Directors of Directed Trusts”, ABA Probate & Property Magazine, May/June 2022.

 

Article: Was It Wise to Try to Implement Trust Law Reforms Through the Uniform Prudent Management of Institutional Funds Act?

C. Boone Schwartzel authored an article entitled, Was It Wise to Try to Implement Trust Law Reforms Through the Uniform Prudent Management of Institutional Funds Act?, Estate Planning & Community Property Law Journal, 2022. Provided below is an abstract of the Article:

This article explores two main topics. First, it generally discusses the Uniform Prudent Management of Institutional Funds Act’s new definitions and expanded scope, and then examines whether under the Act, as a matter of law, restrictions imposed in a gift instrument between a “donor” institution and a second, affiliated institution it controls must be respected and enforced (and the fund assets treated as “donor restricted”) even though generally accepted accounting principles may take a different view.

Second, the article examines UPMIFA’s new statutory remedies that empower courts and charitable institutions to modify much more easily a donor’s outdated or “wasteful” restrictions. UPMIFA’s remedies are loosely patterned after controversial reforms of trust law’s equitable deviation and cy pres doctrines, as promulgated in the Uniform Trust Code and the Restatement (Third) of Trusts, that loosen their historical ties to the donor’s original charitable intent and virtually eliminate cy pres’ “general charitable intent” requirement. There are important public policy issues and constitutional law questions concerning the wisdom and validity of these reformed trust law remedies, and especially as implemented in UPMIFA.

 

 

Article: The Slayer Rule: An Empirical Examination

Fredrick E. Vars authored an article entitled, The Slayer Rule: An Empirical Examination, ACTEC Law Journal, Forthcoming Spring 2023. Provided below is an abstract of the Article:

Elmer Palmer murdered his grandfather. The undisputed motive was money. The grandfather’s will included a large gift to Elmer, which the grandfather was poised to eliminate. Elmer acted first. Under the law at the time, Elmer would inherit despite having intentionally killed his grandfather: the existing will controlled. Unfortunately for Elmer, the New York Court of Appeals announced a new equitable principle: Murderers cannot inherit from their victims. Since this famous decision in 1889, some version of the “slayer rule” has been adopted by nearly every state and lauded by nearly every commentator. Still, important questions about the proper scope of the slayer rule remain unanswered. Case law and scholarship identify multiple rationales for the slayer rule, which push in different directions in difficult applications.

This study is the first to empirically test key assumptions underlying the slayer rule. Over a thousand survey respondents answered the question “What’s fair?” or “What would the decedent want?” in twelve different scenarios. Some of the most significant conclusions are that the slayer rule should not apply to assisted suicide, killings in self-defense, or killings due to mental illness. On the other hand, the slayer rule should be expanded beyond murder in some circumstances, such as elder abuse and neglect. And the slayer rule should be converted from a mandatory rule into a default rule, which testators could opt out of in their wills. Carefully probing what people think about the slayer rule illuminates its many aspects and points toward needed reforms.

Article: Trusts Over Cremated Ashes

Kate Falconer recently published an article entitled, Trusts Over Cremated Ashes, Journal of Equity, 2021. Provided below is an abstract of the Article:

Every year in Australia over 110,000 people are cremated. Each of these cremations leaves behind physical material — what is commonly referred to as ‘cremated ashes’, or, more succinctly (and no less respectfully), ‘cremains’. In recent decades, Australian courts have begun to impose trusts over this physical material prior to its ultimate disposal. This ‘cremated ashes trust’ provides courts with much-needed flexibility in resolving bitter disputes between those close to the deceased, but, so this article argues, is built on flawed foundations. In particular, this article rejects the explanation given in the case law to date, which sees the trust over cremated ashes as an express trust for a purpose. Instead, it argues that the classification of the cremated ashes trust as a constructive trust best reflects both doctrinal reality and the normative forces that have underpinned its development.