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Estates and Trusts
Top Five Probate Litigation Trends: What Estate Planners and Trust Practitioners Need to Know
The United States is in the midst of a historic generational transition. The so-called “Great Wealth Transfer” is estimated to exceed $84 trillion in assets passing from Baby Boomers and the Silent Generation to their heirs over the coming decades. This wealth transference is reshaping the landscape of estate administration and trust practice. Against this backdrop, an aging population, the rising complexity of blended family structures, and the rapid proliferation of digital assets are combining to produce unprecedented levels of estate probate and trust litigation. Courts across the country are contending with both more numerous and meaningfully more complex disputes than those of prior generations. Much like the Midwest’s flat dustbowl lends itself to more frequent tornadic activity than elsewhere in the country, here in the “DMV” (D.C./Maryland/Virginia), home to a dense concentration of federal employees, government contractors, military families, and high-net-worth households, conditions are particularly ripe for contested estate and trust dispute activity. It shouldn’t be a surprise, therefore, that Virginia's and Maryland’s Circuit Courts, and D.C.'s Probate Division are all experiencing a meaningful uptick in contested proceedings. The five trends identified below reflect the most consequential litigation developments that estate planners and trust practitioners in this region should be tracking in 2026. UNDUE INFLUENCE CLAIMS ARE SURGING Caregiver-beneficiary relationships, late-in-life marriages, and deathbed changes to estate plans are generating a wave of undue influence claims across the DMV region consistent with the nationwide trend. And with statutory changes favoring the challengers, such claims are only likely to continue to increase. Virginia's multi-part undue influence test and shifting evidentiary burdens, nominally at least, favor challengers of wills, see § 64.2-454.1. and, with a newly-enacted equivalent governing the trusts context, effective as of July 1, 2026, of trusts as well, see § 64.2-724.1. In situations where undue influence may be presumed from basic circumstances, often easily established by the challenging plaintiff, cases of late have become more about an accused’s needing to disprove wrongdoing than about the skeptical plaintiff’s duty to prove the contrary. Alleged influencers who occupied a position of trust or physical dependency should presume a legal challenge when changes to testamentary planning result in a plan favoring the one in that position for the decedent. In Maryland, the Court of Appeals (FKA the Court of Special Appeals) has affirmed that undue influence may be proven through cumulative inference, permitting plaintiffs to build their cases through patterns of conduct rather than direct evidence. In D.C., the Probate Division has demonstrated a notable willingness to allow contested matters to reach trial based on affidavit evidence alone, lowering the practical threshold for advancing such claims. For the devoted family member who has done only right by their deceased parent(s) while asking or expecting nothing in return, a parent’s reward of a greater than equal distributive share may result in little more than authorized judicial scrutiny and second-guessing of actions taken when t-crossing and i-dotting were not the primary (or even secondary) priority. These shifted burdens may operate unfairly to the detriment of the selfless doting loved ones their dying parents saw fit to reward, but we have decided societally to err in favor of protecting against overriding our elders’ testamentary intentions over the perceived substantially more limited likelihood that the decedent independently intended and resolved to recognize and reward their loved one’s selfless kindness. We have effectively shifted the presumption in this context to one of expected wrongdoing by anyone rewarded by a dying loved one. Practice Tip: Document the testator's independent judgment at every planning stage, especially for any amendment in contemplation of more imminent death. Consider independent counsel for vulnerable clients and retain contemporaneous notes of all meetings. LACK OF TESTAMENTARY CAPACITY CHALLENGES Dementia diagnoses are rising in lockstep with an aging client base, and contests premised on lack of testamentary capacity are becoming more common and considerably more sophisticated. The classical four-pronged capacity standard, i.e., requiring that a testator understand the nature of the testamentary act, the character and extent of their property, the natural objects of their bounty, and the nature of the will itself, remains the legal benchmark across the DMV jurisdictions, but the evidentiary battles to establish or defeat capacity have grown considerably more technical. Plaintiffs now routinely retain geriatric psychiatrists and forensic neurologists as expert witnesses, and the battle of the experts has become a defining feature of capacity litigation. Virginia Code §§ 64.2-403 and -404 govern will execution formalities (and/or the excusability of noncompliance therewith), and courts scrutinize compliance with these requirements closely when capacity is disputed, particularly regarding the role of attesting witnesses and notaries. Practice Tip: Consider recommending a contemporaneous medical assessment for clients with any documented cognitive impairment; consider a "golden period" video execution for “high-risk” matters, but recognize the “red flag” signal such a step may suggest and/or the potentially disproportionate impact of even the most minor lapses or misstatements. Likewise, a capacity assessment memorandum prepared by the drafting attorney at the time of execution might be invaluable in future litigation but is not without its own caveats. DIGITAL ASSETS AND CRYPTOCURRENCY DISPUTES The valuation, access, and proper distribution of digital assets, including, as relevant examples, cryptocurrency wallets, non-fungible tokens (NFTs), online brokerage accounts, and internet-based business interests, are creating novel litigation flashpoints that earlier probate frameworks were not designed to address. Virginia has enacted the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) (Va. Code §§ 64.2-116 et seq.) to provide fiduciaries with clearer statutory access rights, but significant disputes persist around the possession of private cryptographic keys, the policies of third-party exchange platforms, and the correct estate-date valuation methodology for inherently volatile assets. Maryland and D.C. have enacted comparable RUFADAA statutes, yet litigation in all three jurisdictions reveals that statutory authorization and practical access remain separated by a significant gap, particularly where a decedent leaves no organized record of digital holdings or credentials. Practice Tip: Ensure all estate plans include a digital asset inventory and an explicit fiduciary authorization clause; counsel clients to use platform legacy contact and beneficiary designation tools where available. A securely stored credentials memorandum, separate from the will, can prevent years of unnecessary litigation. ELDER FINANCIAL EXPLOITATION AND CONSERVATORSHIP LITIGATION Adult protective services referrals, emergency guardianship petitions, and civil claims for financial exploitation of vulnerable adults are rising sharply across all three DMV jurisdictions. Virginia's Adult Protective Services statutes (Va. Code §§ 63.2-1600, et seq.) and the Commonwealth's criminal elder abuse statutes are being deployed with increasing frequency in tandem with civil probate remedies, including claims for constructive trust, disgorgement, and punitive damages. Contested guardianship and conservatorship matters in Virginia Circuit Courts seem to have grown substantially in both volume and procedural complexity, with courts appointing guardians ad litem (“GALs”) with greater frequency to safeguard the interests of alleged incapacitated persons. In Maryland, the intersection of the Health Care Decisions Act with surrogate decision-making disputes has generated a distinct body of contested proceedings, particularly where family members disagree about the scope of an agent's authority under a durable power of attorney. Practice Tip: Counsel aging clients to establish durable powers of attorney, advance medical directives, and revocable trusts proactively BEFORE capacity becomes an issue. Encourage regular monitoring of financial accounts for irregularities and consider the use of trusted contact designations with financial institutions. TRUST MODIFICATION, DECANTING, AND NO-CONTEST CLAUSE DISPUTES Irrevocable trusts formed decades ago are being challenged, modified, or decanted with growing frequency as family circumstances evolve and tax laws change. Virginia's Trust Decanting Act (Va. Code §§ 64.2-779.1, et seq.) provides a statutory mechanism for trustees to distribute assets from one irrevocable trust to a second trust with more favorable terms (a process that is itself a growing trend), but this power is increasingly being contested by remainder beneficiaries who argue that decanting impermissibly alters their vested interests. No-contest (or in terrorem) clauses, long regarded as effective deterrents to meritless litigation, are being strategically challenged as beneficiaries weigh the financial calculus of contesting large estates and assess the likelihood of clause enforcement. Maryland courts have historically enforced in terrorem clauses with relative strictness, while D.C. courts have applied them more flexibly, creating meaningful jurisdictional variation within the same metropolitan region. Practice Tip: When drafting no-contest clauses, consider including explicit carve-outs for good-faith challenges based on capacity or undue influence and/or gross mismanagement or self-dealing. Blanket clauses discourage otherwise meritorious litigation. Review irrevocable trusts periodically for decanting candidacy, particularly those with outdated distribution standards or unfavorable trustee succession provisions. Conclusion The litigation trends documented here share a common thread: each is, at its core, a failure of planning, whether a failure to document, communicate, update, or anticipate. Proactive, well-documented estate planning remains the most reliable and cost-effective litigation prevention tool available to practitioners and their clients. Comprehensive planning that accounts for cognitive vulnerability, digital asset complexity, blended family dynamics, and evolving trust structures will materially reduce the risk of costly, protracted disputes. Practitioners serving clients in the DMV region are well-served by engaging colleagues who bring broad, multidisciplinary expertise to complex estate matters. If you do not believe you are equipped to navigate the generational, jurisdictional, and asset-class complexity that defines modern estate and trust practice, seek help. Remember, it is not failure to admit you don’t know it all, rather consider it more of a professional imperative.
June 30, 2026
Estates and Trusts
Will‑Challenge Litigation: Forensic Expert Cross‑Examination
Estate litigation rarely turns on a single moment, but an effective cross‑examination of the other side’s forensic document examiner may be one’s best shot at that “Perry Mason moment.” When a will’s authenticity is in dispute, the expert’s testimony is counted on to provide the foundation upon which one’s entire case rests. Successfully reducing their document authenticity evidence to a mere guess based on conjecture can provide that Jenga-like moment of removing that pivotal piece and watching the tower of blocks come crashing to the floor. And while jurists routinely remind us that experts are “advisory,” anyone who has tried one of these cases knows that a confident expert with a clean narrative can carry enormous weight. The inverse is equally true: a shaky expert can unravel a proponent’s case in minutes. The Real Work Begins Before the First Question Effective cross‑examination starts long before the expert takes the stand. Forensic document analysis is a discipline built on methodology, not mystique. Every document authenticity opinion, whether about signatures, ink, paper, toner, or page substitution, rests on a chain of decisions made by, or in some situations, forced upon the expert: what they examined, what they ignored, what they assumed, and what they concluded. Mapping that chain is the key to exposing weak or even missing links. Several pre‑trial “to dos” can be expected to pay consistent dividends: Pin down the expert’s universe of materials. What known samples of the author’s handwriting, known as “exemplars,” were used? Who selected them? Were they contemporaneous with the questioned handwriting? Were they originals or scans? Identify methodological “shortcuts.” Did the expert deviate from published standards? Did they rely on subjective impressions or conduct objective testing? Trace the chronology. When did the expert receive the documents? Were they sealed? Was the chain of custody documented? Did the expert know the litigation posture before forming opinions? By the time cross‑examination begins, one’s goal should not be to surprise the document examiner. If properly prepared, there won’t be one of those “gotcha moments” as there was on every single episode of Perry Mason. The goal rather, should be to walk the court through the expert’s own process and let the weaknesses reveal themselves. Where Forensic Opinions Tend to Break Down Most will‑challenge cases involve one or more of the following: (i) handwriting analysis; (ii) ink and/or paper dating; (iii) indentation analysis; (iv) spectral imaging; and/or (v) digital or toner evaluation. Each offers its own pressure points, which if sufficiently exploited, can be expected to reveal a lack of reliability. Handwriting and signature analysis often falters on the quality and quantity of exemplars. An expert’s reliance on a narrow or non‑representative sample, exposes vulnerabilities which any good forensic expert already knows. The smaller the sample size and the less representative of the decedent’s handwriting at the time of the document being challenged, the less reliable the opinion regarding authenticity. Ink and paper dating can be powerful, but only when the expert can articulate the limits of the testing. Many methods can rule out a date but cannot confirm one. Indentation and page‑sequence analysis is only as strong as the expert’s documentation. Missing photographs, incomplete notes, or ambiguous impressions create fertile ground for doubt when appropriately exposed. Spectral imaging can detect alterations, but courts expect the expert to explain what the imaging cannot show. Overstatements are often more damaging than gaps. Digital forensics requires a clear explanation of how the expert distinguished between original signatures and those that have been scanned or mechanically reproduced. Ambiguity here tolls the death knell. Cross‑examination succeeds when it forces the expert to concede the limits of their discipline without appearing combative. Most judges will tend to appreciate clarity over theatrical “A-ha!’s.” The Most Persuasive Cross‑Examinations Share a Common Structure The strongest cross‑examinations in will‑challenge litigation tend to follow a predictable arc: Establish the expert’s own standards. Let the expert define what “reliable methodology” means. Demonstrate where the expert departed from those standards. Even small deviations can undermine confidence. Highlight what the expert did not do. Courts understand that omissions matter as much as findings. Expose assumptions. Many forensic conclusions rest on untested premises, e.g., about timing, custody, or exemplar authenticity. Return to the ultimate opinion. By the time the expert restates it, the court should already see its fragility. The goal is not to “win” a battle of experts. It is to give the court a principled reason to discount the soundness of the other party’s process underpinning the conclusion the expert ultimately reached. Why This Matters in Today’s Estate Litigation Landscape Modern will contests increasingly involve blended families, high‑value estates, and digital documents. Consequently, powerful forensic testimony is often the centerpiece of probate-related document authenticity disputes. Courts expect practitioners to understand not only the legal standards, but also the scientific ones. A well‑executed cross does more than weaken an opposing expert. It reinforces the broader narrative, i.e., that the proponent of an alleged will or other testamentary document bears the burden of establishing authenticity, and that doubts grounded in methodical, fact‑driven questioning are legally significant. Weighing Conflicting Forensic Reports in Will Contests Conflicting forensic reports are no longer the exception in will‑challenge litigation; they are the norm. As estates grow more complex and documents increasingly blend handwritten, printed, and digital elements, courts are routinely asked to choose between dueling experts who appear equally credentialed and equally confident. Navigating the conflict is far more structured than many litigants appreciate. Understanding that structure is essential to presenting (or defending against) a challenge to a will’s authenticity. What Judges Look for First: Methodology, Not Conclusions When two experts disagree, courts do not start with the bottom‑line opinion. The starting point, appropriately, ought to be the methodologies relied upon to get there. Harken back to grade school math class with me for a moment. It wasn’t enough to tell the teacher the answer was “12.” You had to show your work if you expected the credit. How you got to 12 was more important than the correct answer, in fact, objectively, “12.” The difference, of course, is that forensic document examination still relies on expert opinion, even if the discipline is built principally on SWGDOC and ANSI/ASB standards, OSAC-reviewed standards under NIST, relevant ASTM standards, and generally accepted forensic document examination methodology, including validated testing techniques and reproducible procedures. For a trier-of-fact, judge or jury, to trust an expert’s subjective opinion in this context, the extent of one’s gray-haired “eminence grise” and years of relevant experience will likely count for something, sure, but scrutinizing the objective path taken to reach the subjective conclusions may prove to be the only differentiator upon which the fact-finder may be forced to rely. If two seemingly equally credentialed experts have reached opposing conclusions, strict adherence to process is necessarily relevant and ought, therefore, to be critically scrutinized so as to appreciate the full extent to which the expert or experts: Consistently applied recognized standards Documented each step of the examination Used appropriate exemplars and controlled conditions Avoided assumptions about timing, authorship, or custody An expert who followed a disciplined, transparent process will almost always be favored over one who relied on subjective impressions or incomplete testing, even if the latter’s conclusion appears more definitive. So be critical of your own expert, seeming to fall too easily into the trap of giving you precisely the answer you want to hear. Assess the foregoing factors in his or her work prior to finalizing the expert’s disclosure and/or report. Imagining the ease with which you, yourself, would elicit such weaknesses on cross-examination should provide more than sufficient fodder for “rehabilitating” your own witness well before they ever need it. The Weight of “Negative” Findings Courts often give greater weight to findings that rule out authenticity than to those that merely support it. For example: Ink that post‑dates the decedent’s death Paper inconsistent with the claimed execution period (or inconsistent pages within the document itself) Toner or printer characteristics that did not exist at the time Indentation patterns showing pages were added or substituted Evidence of any one of these findings may prove dispositive. As difficult as they are to explain away, a single disqualifying inconsistency can undermine an entire document. How Courts Evaluate Competing Signature Opinions Handwriting analysis remains the most commonly contested component of will‑challenge litigation. I’m not aware of any statistical analyses, but my own limited research efforts confirm that it is much easier to find published cases challenging signature authenticity above all other factors. Perhaps this is more a factor of which types of cases are more likely to settle when expertly identified. With that in mind, it is fair to anticipate a high probability that cases coming before the court for resolution involve experts on both sides reaching different conclusions about signature authenticity. With conflicting opinions regarding the signature itself, key potentially distinguishing factors include the following: The number and quality of exemplars each expert used Whether the expert relied on originals or degraded copies The expert’s ability to articulate and exemplify specific stroke‑level comparisons Whether the expert acknowledged natural variation in the decedent’s writing Judges are going to be wary of conclusory statements like “the signature is consistent with the writer’s hand” unless supported by detailed, observable features. In other words, simply saying it, does not make it so no matter how many gray hairs on the expert’s head or letters after their name. When presenting one’s case, one must assure that the expert provides articulable evidence of both consistencies and inconsistencies. The Role of Chain of Custody and Document History Even the strongest forensic opinion can be weakened if the document’s history is murky and/or if the document reflects a significant change of course from the decedent’s previously documented planning for the benefit of a beneficiary who is also the source and proponent of the document. Courts scrutinize the following: Who possessed the will and when Whether the document was sealed or stored securely Whether any party had the opportunity to alter or replace pages Whether the expert knew the litigation posture before forming an opinion A clean chain of custody enhances credibility; a compromised one amplifies doubt. When Experts Cancel Each Other Out In some cases, the court finds both experts credible but inconclusive. When that happens, judges must shift their focus to the surrounding circumstances: The decedent’s prior estate‑planning patterns The relationship between the decedent and the beneficiaries Evidence of undue influence, isolation, or last‑minute changes Testimony from witnesses to the execution The presence (or absence) of earlier, consistent wills Forensic science informs the ultimate decision, but the broader factual landscape often decides it. The Practical Reality: Courts Want a Reason to Trust One Expert Judges are not expecting perfection or 100% certainty. They are looking for credibility, consistency, and restraint. An expert who acknowledges limitations, explains uncertainties, and grounds every conclusion in documented observations is typically far more persuasive and effective than one who overreaches and speaks only in terms of “all or nothings” (e.g., refuses to acknowledge anomalies and/or steadfastly claims to a high degree of certainty). In will‑challenge litigation, the most effective strategy is not to “win the science,” but to “trust the process” and give the court a principled, fact‑driven basis to trust your expert’s path to the conclusion. To that end, cross-examination should be directed at establishing grounds to distrust the other side’s process, the totality of which will include more than just their expert. One would do well to prepare for expert cross-examination in this context, as exposing not only the weaknesses in the expert’s process but recognizing, as well, that the expert’s ultimate conclusions are only as strong and trustworthy as the weakest link in their opinion chain.
March 26, 2026
Estates and Trusts
Five Big Estate Planning Mistakes — and Why You Should Act Now
Each year, I revisit the most common estate planning missteps I see in my practice. These mistakes cost families time, money, and peace of mind. If you’ve been putting off your plan, consider this your annual nudge to take action. Tomorrow is never guaranteed; start today. #5 - Inequity Trying to treat everyone ‘equally’ can be just as problematic as treating loved ones differently because you think they don’t need (or, perhaps, don’t deserve?) anything. Maybe you’ve given more to one child already and plan to ‘balance things’ later. Unless you’re prepared to include a detailed accounting (and even then), think twice. The same goes for naming fiduciaries (executor, trustee, attorney-in-fact) based on perceived fairness. Choose the right person for the job, not the one who ‘should’ do it (for instance, because they’re the oldest.) And please, resist naming your only two kids as co-fiduciaries without a clear tie-breaker. Two decision-makers with no way to resolve a deadlock means one thing: court intervention. If you insist on co-equals, at least give them a mechanism to break ties (best two out of three coin flips, anyone? Rock, paper, scissors, perhaps?). #4 - Sentimentality Assuming you know what your loved ones will want, or won’t want, is a recipe for conflict. People rarely talk openly about what matters to them, and even if they say, ‘I don’t want anything,’ that may not be the whole truth. Style, space, and timing all play a role. Over-communicate rather than under-communicate. Force the conversation, even if it’s uncomfortable. It beats leaving behind a family feud over misperceived intentions. #3 - Communication Failing to involve all beneficiaries (even minimally) is a major mistake. You don’t need to give everyone a vote, but you should let them know a plan exists and where to find it. You might even consider a couple options to help arm against an undue influence claim later. Tell everyone if/when you change the plan (not just the person caring for you who you come to believe now deserves something more). Here’s one I’ve not yet seen tried: give everyone a copy and include a provision that says you conditionally give up the right to change your will and that no future changes shall be effective unless you communicate them yourself to all of your beneficiaries along with a copy of the new document(s). Confirm with those who will have roles: executor, trustee, guardian. They may not want or be able to serve. And always name backups (and backups to backups). A little foresight here prevents a lot of chaos later. #2 - Indecision Changing your plan isn’t wrong, but timing matters. Last-minute changes—especially near death or after cognitive decline—invite litigation and resentment. If you revise, communicate clearly and broadly. Unexplained changes breed hostility, even among those who benefit. Transparency is your best defense against family discord. #1 - Inertia The biggest mistake? Doing nothing. As Harvey Mackay famously said: “Failing to plan is planning to fail.” Not creating a will or other directives means you’ve chosen the default: a costly, time-consuming mess for your loved ones. Don’t let intestacy dictate your legacy. Make a plan and execute. Do it now.
December 30, 2025
Estates and Trusts
The Dreaded After-Discovered Will
The Estate Administration Curveball that can Change Everything The case of Zappos owner Tony Hsieh, the late billionaire who was initially believed to have died intestate, without a valid will, took an unexpected turn when an apparent original will surfaced years later, halfway around the world, under highly unusual circumstances. This development highlights the complexities that can arise when a previously unknown will appears after a period of presumed intestacy. While many of the legal and factual issues in Hsieh’s case are unique, the story provides a valuable lens for understanding what can happen when an unexpected will emerges and the broader implications for estate planning and estate administration. To understand the impact of an after-discovered will coming to light only after a probate has already begun, or even concluded, taking a quick step back may be in order. This can be equally problematic whether the case had been proceeding under the assumption of intestacy as in the Hsieh (aka Zappos) case, or under a commonly held misperception that the will was the decedent’s “last will.” Probate is the legal process of administering a deceased person’s estate. When someone dies without a will, the state steps in with its own rules — called intestacy statutes — to determine who inherits what. But if a valid will is found after the fact, things can get complicated. Similarly, the discovery of a more recent will after probate has proceeded based on a prior will (believed and understood at the time to be the latest such testamentary document of the decedent disposing of the decedent’s estate assets), raises obvious questions about the voidability of past proceedings and decision making relating thereto. Several key issues that might arise when a will surfaces after the fact include the following. Impact on ongoing probate proceedings. How, if at all, does an after-discovered will impact an ongoing probate process? If an estate is still open and being administered when a will is discovered, Virginia law allows for a significant course correction. Assuming the newly-found will is offered, and, if recognized and accepted by the court as a valid will of the deceased, admitted for probate, the terms of the new will supersede the intestacy-based administration. Because the circuit court has jurisdiction over probate matters, the will should be submitted to the circuit court in the locality where the decedent resided or held property, i.e., the same jurisdiction where an intestate administration ought to have been properly initiated in the first instance. (See Virginia Code § 64.2-443). If the estate has already been closed, reopening the probate may be necessary. Interested parties — such as heirs, beneficiaries, or the original executor — can petition the court to reopen the estate to administer the will properly. While Virginia doesn’t have a specific statute conveniently titled “reopening probate” or the like, courts generally allow it under their inherent authority when new evidence (like a valid will) emerges. Impact on a closed probate estate. How, if at all, does an after-discovered will impact any already-administered or distributed assets? If assets have already been distributed under a presumed intestacy, the discovery of a valid will could trigger efforts to try to recover and redistribute assets to the extent the will calls for an outcome other than the default intestate division. This right to a “redo” is not without limitations, however. Recognizing that it might be appropriate but difficult to near impossible to simply reverse any transactions, the general assembly saw fit to afford an aggrieved would-be beneficiary a window in which to be able to make good. For instance, in Virginia, Section 64.2-457 of the Code of Virginia provides that assets distributed under a presumed intestacy may be subject to recovery if a will is later discovered and admitted to probate. However, this recovery is limited both in scope and time. The statute generally allows for asset recovery only if the will is discovered and probated within one year of the original probate or administration. After that, asset distributions are typically deemed final, and the recipients may not be required to return the assets. In other words, whether property already transferred might be subject to being clawed back into the estate for the benefit of a devisee under a later-discovered will, will be determined by whether the after-discovered will is filed within that one-year period. See also Virginia Code Sections 64.2-456 for further details. Such a limitation is most commonly referred to as a “statute of repose.” Who’s in charge now? What happens, if anything, to prior probate procedural decisions (e.g., executor qualifications; administrator appointments; related fee awards) made based on a previously presumed or later-occurring intestacy? Some prior decisions — such as the appointment of a personal representative or the approval of accountings — may be revisited, especially if they conflict with the terms of a newly discovered will (or the impeachment of a will previously relied upon). However, Virginia courts may uphold actions taken in good faith under the original probate, particularly if the will’s existence was unknown (as opposed to known but undiscovered) and could not reasonably have been discovered. The court has discretion to issue protective orders or modify prior probate orders of the clerk, or deputy, to reflect the actual or new reality, as outlined in Section 64.2-445, which allows appeals and adjustments to probate orders by the circuit court within six months of entry by the clerk. More generally, however, the circuit court is vested with equitable authority to do what is right and just to the circumstances. If a court approved the appointment of an administrator on the presumed non-existence of a will, even after hotly-contested proceedings, only to learn later to the contrary, the court will not be compelled to abide by its prior order and shall, instead, be empowered to make whatever changes the court determines are appropriate to the newly understood situation. Just as the timely discovery of new evidence might justify vacating a prior final judgment in either civil or criminal proceedings, so too would we expect that a circuit court judge to be empowered to do what’s right, regardless of any stated rationale for the prior decision. The Bottom Line When it comes to discovery of a loved one’s estate planning documents, “better late than never” does not always hold true. Certain rights are preserved or upheld by appealing a clerk’s order admitting a will to probate within six months from entry of such an order. When it comes to reversing actions taken prior to the discovery of a valid and/or more recent will of the decedent, the one-year anniversary of a decedent’s date of death is the key differentiator. A will discovered late in the probate process can up-end the entire legal and financial structure of an estate and its administration and completely change the probate narrative. If discovered too late, it may, for all intents and purposes, not have any effect at all – insofar as the probate narrative may, by that time, have been completely and irrevocably rewritten in a manner contrary to the decedent’s intentions. After the one-year anniversary, the decedent’s testamentary intentions may very well have been rendered moot as having been “OBE,” or “overtaken by events,” to the extent that the probate proceeded in the absence of the unknown or missing will. A would-be financer or purchaser from a legal heir, devisee, or personal representative with power to sell, mortgage, or otherwise dispose of an interest in real property, should be mindful of the one-year anniversary and very wary of taking action in advance of that deadline or else risk potential divestment of whatever interest in the property they believed they were acquiring. The Hsieh (aka Zappos) case serves as a stark reminder that document safekeeping and communication about the whereabouts of important testamentary documents matter as much or more as proper planning in the first instance.
November 21, 2025
Estates and Trusts
Spotlight on Intestacy: Liam Payne and the Importance of Planning Ahead
When One Direction's 31-year-old band member, Liam Payne, fell from an Argentinian hotel balcony to his tragic death in October 2024, he left his then 8-year-old son, Bear, fatherless. However, as the sole heir to his father's fortune, the young grade-schooler had instantly and unwittingly become the playground's "most eligible bachelor." Fortunately, it seems, Bear's "mum," Girls Aloud singer/actress Cheryl Tweedy, has, together with Payne's former music lawyer, successfully secured court-appointed co-administrative control over Payne's estate and with it, Bear’s inheritance. For her part, although Tweedy has remained out of the public spotlight for most of the past year since Payne's untimely death, Tweedy has publicly been quoted as intending to block her son's access to the money until he turns 25 and possibly doling out portions of it in the years thereafter. These are commonly used provisions in trusts intended to protect minors and young adults from themselves. Tweedy is credited with recognizing that unfettered access to Bear’s inherited wealth any earlier would likely be problematic for him in numerous ways, including making him a target for unscrupulous sycophants or blowing it all on any combination of vices (the whole "male frontal lobe not fully closing 'til age 25" reality). While Bear is not expected to want for anything, Tweedy is generally credited with wanting Bear to grow up appreciating the "value of a dollar" (or an English pound, in this case). Commendable, if only due to its apparent rarity these days, for a celebrity to espouse such a grounded outlook. Brava, Ms. Tweedy. Brava. But, if it were truly this easy, why do any estate planning at all? Even assuming the best of intentions of a surviving parent, how could lack of planning, and particularly lack of a trust over one's assets, go completely sideways? Using young Bear Payne’s situation as a guide, let us begin to count the ways: Probate and Taxes. Intestacy necessitates probate, which can be a costly, time-sucking hassle, and delay. Also, depending on the amounts involved and the jurisdiction, the resulting tax consequences could be substantial, especially compared to a potentially tax-free disposition had a simple trust transfer been documented while Payne was alive. Court-appointed estate administrator(s). You cannot presume the person or people you would want or expect to be in charge will actually be appointed by the court. It is not a foregone conclusion that anyone, in particular, will be appointed. In any event, unscrupulous relatives, "friends," and/or advisors may tie things up in costly legal proceedings, vying for access and control (and the enticement of a not-insignificant paycheck for their services)! No creditor protection. Without the typical spendthrift protections of a trust, creditors of Bear will be able to reach the inheritance assets even if Bear’s mum has withheld the funds from Bear to try to protect Bear from himself. Bear the heir. Bear, himself, is empowered to insist on distributions as soon as he comes of age. As if a teenager needed any other excuse to seek early emancipation! Unless a formal guardianship or conservatorship is imposed (for reasons unrelated to his inheritance rights), Bear will be entitled to insist on receiving all of it, regardless of what his mum thinks is best for him at that point. Lest one jump too quickly to buy into the guardianship/conservatorship option, I caution one to look no further than the Brittany Spears saga to appreciate why this is not necessarily the way to go. Co-fiduciary deadlock. For now, at least, there have been no public reports of any disagreement between the co-fiduciaries. As the ongoing litigation between Jimmy Buffett’s co-fiduciaries reflects, even hand-picked equals can find themselves deadlocked. The single-most important takeaway from Liam Payne’s situation is that it is never too early to plan. My first boss, a former Army flag officer, counseled me to always have a back-up plan in case one under our “command” was “hit by a bus” and didn’t make it into work (I had just been promoted, and the bookkeeper and payroll manager reported to me). In the estate planning context, lack of planning means leaving matters to chance and risking both your loved ones and the wealth you hope to leave behind for them. Refusing to address end-of-life decisions can be a very costly choice. And make no mistake, not deciding is still deciding. As the classic rock line goes: “If you choose not to decide, you still have made a choice.” (Rush, Freewill, 1980). Cheryl 'will block Bear from Liam Payne's inheritance' until he reaches major milestone, Metro.co.uk
October 30, 2025
Estates and Trusts
Trust Protectors – Should You Have One?
When creating a trust, determining who you want to serve as trustee(s) and benefit from the trust as beneficiaries are decisions that need to be made for every trust. The role of “trust protector” may not be as commonly known or understood, but the decisions whether to have one and, if so, who might best serve in the role, can be key to a smooth administration. A “trust protector” can provide valuable trustee oversight, flexibility, and inexpensive revisability — especially in long-term or complex trust arrangements. Deciding whether to have one and, if so, who might best serve in the role, can be key to a smooth trust administration. What is a Trust Protector? A “trust protector” is a person or entity appointed to monitor and, if necessary, intervene in the administration of a trust. Unlike a trustee, the trust protector does not manage trust assets or distributions. Instead, they are granted specific powers, defined in the trust document, to ensure the trust continues to operate in line with the grantor’s intent. Typical powers of a trust protector may include some combination of the following: Removing or replacing a trustee Amending trust provisions to comply with changes in law Resolving disputes between trustees and beneficiaries Approving or vetoing certain trustee actions This role is especially useful in irrevocable trusts, where flexibility is generally pretty limited. Does My Trust Need a Trust Protector? Not every trust requires a trust protector, but there are several scenarios where appointing one may make more sense: Long-Term Trusts: Trusts designed to last decades or generations benefit from a mechanism to adapt to changing laws and circumstances. Irrevocable Trusts: Since these trusts are difficult to modify, a trust protector can provide limited flexibility without court involvement. Complex Family or Business Dynamics: If there’s potential for conflict or concern about trustee performance, a trust protector can serve as a neutral safeguard. Asset Protection or Offshore Trusts: These often include a trust protector as a standard feature to enhance oversight and control. How Do I Choose the Right Trust Protector? If you’ve chosen to include a trust protector, how do you how do you decide which person is the right fit for your particular trust? Electing the appropriate trust protector is critical to ensuring the role adds value rather than complexity, and every situation should be evaluated on its own merits. That said, you might want to consider some or all of the following when making your choice: Independence: Ideally, the trust protector should not be either a beneficiary or a trustee to minimize or avoid altogether potential conflicts of interest. Expertise: Legal, financial, or fiduciary experience is beneficial, especially if the trust is complex or long-term. Trustworthiness: As the name implies, this role requires someone who can be relied upon to act in good faith and consistently with and in furtherance of the grantor’s intent. Availability: The trust protector should be willing and able to serve for the duration of the trust or have a succession plan in place. Often, clients choose a trusted advisor, attorney, or corporate fiduciary to serve in this role. Common Misconceptions About Trust Protectors Despite their growing use, the purpose and/or responsibilities of trust protectors can be misunderstood. Here are a few common misconceptions: “Trust protectors replace trustees.” It depends on what is meant by “replace” in this context. They generally oversee and intervene with the authority to replace one or more trustees with another only when necessary (such as when a trustee is perceived to be abusing his or her position or failing to carry out the terms or intentions of the trust). Trust protectors do not, however, manage assets or make routine decisions by substituting or “replacing” their own judgment for that of the appointed trustee(s). “Only large or offshore trusts need a trust protector.” While the use of trust protectors is common for large or offshore trusts, trust protectors can be helpful in domestic estate plans, especially where flexibility or oversight is desired. Reasons why a particular trustee may have been named at the time of drafting may no longer apply when the time comes. Successor trustees may not be in a position to step in as established in the trust (due to age or health issues, for instance). With a trust protector in place, it can be like having an added layer of defense against life’s unexpected twists. “Appointing a trust protector complicates the trust.” If “complicates” means the addition of more words, then yes, the addition of a trust protector does complicate things. Nevertheless, when properly drafted, a trust with a built-in protector can simplify administration of the trust and reduce, or even eliminate altogether, the need for court involvement. Take the situation faced by Jimmy Buffett’s widow. With Jimmy’s former legal counselor/advisor and his wife on equal footing as trustees, they quickly deadlocked over what can, should, or must be done with the assets and distributions. A well-chosen trust protector in Jimmy Buffett’s case could have served as the needed tie-breaking vote and/or insisted upon a “change in attitude” or occasioned a “change in latitude” by ousting whichever of the trustees, in the judgment of the trust protector, seemed to be missing the settlor’s intention, or as Jimmy might have said, acting as the “people our parents warned us about.” Final Thoughts A trust protector is not an essential requirement but, in the right circumstances, can be a valuable addition to a trust. The presence of a trust protector can serve as a “check and balance” feature to help ensure your trust remains effective, adaptable, and aligned with your goals over time by providing oversight after you passed on. If you're wondering whether a trust protector is right for a new trust you are considering, simply be sure to mention it to your estate planner/drafting attorney. If considering revising an existing trust to add a trust protector, seek a second opinion, separate from the initial drafting attorney, to evaluate your specific needs and objectives and whether these are more likely to be met with or without a trust protector.
August 25, 2025
Estates and Trusts
When a Corporate Trustee May Be a Disadvantage for Your Trust
Last month I explored the potential advantages of naming a corporate trustee, acknowledging that the decision is ultimately a matter of personal preference. In this second part of a two-part, “point-counterpoint” consideration of corporate trustees serving as such for individuals’ personal trusts, I take up potential disadvantages and reasons you might consider not naming a corporate trustee to manage your trust. Should you name a financial institution as corporate trustee to manage your trust when you are no longer able to do so for yourself? Whether you name a financial institution to manage your trust assets when you are no longer able to do so for yourself is ultimately a matter of personal preference and choice. In this second part of a two-part, “point-counterpoint” consideration of corporate trustees serving as such for individuals’ personal trusts, I take up potential disadvantages and reasons you might consider not naming a corporate trustee to manage your trust. $$$ - Higher Costs Relying on a financial institution to manage your trust when you are no longer able to do so for yourself generally requires a more substantial commitment to administrative costs. While friends and family might be willing to serve when you’re gone – and frequently agree to do so with no thoughts of compensation (or the time commitment potentially involved!) – no corporate trustee is going to undertake or continue the effort without being adequately compensated. Corporate trustees charge annual fees that typically range from 0.5% to 2% of the trust’s “assets under management,” depending on the size and complexity of the trust. These fees are intended to compensate reasonably for professional services required to manage the assets and administrative responsibilities. In my experience, family members and friends serving as trustees typically charge little or nothing for their trust/asset management efforts, regardless of the discretion afforded to them under the governing trust document(s). The decision whether to exercise this discretion in favor of taking a fee is typically driven on the one hand by a sense of entitlement and, on the other, by an inherent sense of fairness (including an assessment of the likelihood of heartburn and frustration) to be generated by beneficiaries’ uninformed and often unwarranted perception of impropriety occasioned by the resulting imbalance as violative of “equality for all” expectations. To be sure, individual circumstances vary widely, and a family/friend trustee should have no reservations about being reasonably compensated for work that money managers and financial advisors would otherwise be charging a significant sum. Most trusts expressly afford trustees discretionary authority to be compensated for their efforts. And, unless expressly stated in the trust document, Virginia, like most jurisdictions, allows such discretionary compensation by default. Consequently, one can generally expect trust administration costs under a corporate trustee to exceed what an individual trustee might be expected to charge (if anything) for his or her trust management services. It is typical to allow an individual trustee the discretion to take a fee for one’s services. The more substantial the trust, the more time and effort can be expected to monitor and manage – especially if one or more family members have their own expectations (however misguided or unrealistic they may be!) regarding the timing and extent of their inheritance. In my experience, there’s almost always at least one troublemaker beneficiary making things miserable for everyone else – especially the trustee. Lack of Personal Touch Corporate trustees are in the business of managing trusts and, therefore, manage many trusts at once. Consequently, a corporate trustee may not be able to provide the personalized attention that a close family member could. In all fairness, a corporate trustee cannot be expected to understand or appreciate the unique family dynamics or emotional aspects of the trust as well as a family member or close friend could. Perhaps you are in the 1% of those fortunate to have developed a close long-term relationship with a trusted advisor at a corporate trustee and have convinced yourself that no other friend or family member could possibly be trusted to do as good a job carrying out your wishes. I’m not here to talk you out of your blissful naivety, but you owe it to yourself to give due consideration to the probabilities of your trusted advisor dying and how familiar the likely successor(s) is/are with your situation. Less Flexibility Institutional trustees often operate under strict guidelines and may be less flexible or slower to respond than an individual who can make quick, informal decisions. This relative inflexibility stems, at least in part, from a higher likelihood of being held to task in hindsight for decisions which, at the time, may have seemed eminently reasonable. A beneficiary is more likely to attempt to create a legal issue about holding a corporate trustee liable for decisions that, in retrospect, turn out sub-optimally. Consequently, a corporate trustee can be expected to apply a more rigorously conservative approach to investing and discretionary distributions, for instance. Of course, this may be precisely what you’re looking for in a trustee. Alternative Asset Limitations Along with less flexibility in the manner in which they might be expected to make decisions regarding the assets under their management, corporate trustees are oftentimes limited in the asset classes they manage. Precluded from keeping particular types of assets in their portfolio, a chosen corporate trustee may become the tail wagging the proverbial dog when they prove incapable of serving 100% of your trustee needs. For instance, real estate is quite frequently beyond the purview of a corporate trustee. Therefore, if you have substantial “alternative asset” holdings (i.e., beyond the traditional “stocks and bonds,” annuities, and typical financial market holdings such as derivatives), a corporate trustee may not be the right choice for you. On the other hand, the more specialized or unique the holdings, the more likely you will want to try to find a trustee with the needed specialized expertise to manage these alternative assets appropriately. Special circumstances demand special consideration. Just recognize, as well that a corporate trustee with the relevant specialized skill set may not be the best choice to serve as your fiduciary for your other trust assets. And even if they are a potential fit across all of your asset classes, their relative expertise and/or comfort level may require some drafting cooperation to develop and settle on an arrangement with which the corporate trustee can get comfortable. For instance, we recently assisted a blended family in avoiding a potentially very costly legal fight by identifying and working with an independent corporate trustee to develop a settlement trust arrangement, the terms, procedures, and potential liability protections of which the trustee could accept. The new trust arrangement overcame the mutual distrust factors, avoided significant legal fees, and uncertain outcomes. Cooperatively addressing and overcoming the specific corporate fiduciary’s reservations ultimately afforded all of the trust beneficiaries the independent management/oversight they each needed. Final Thoughts I would be dishonoring the legal profession if I did not acknowledge, quite lawyerly, that “it depends!” If you haven’t figured it out yet, there is no one-size-fits-all “right” answer. Everyone’s situation is in some respects unique and people’s risk preferences fall across a full spectrum (from a nihilistic “what do I care? I’ll be dead!” to “I couldn’t possibly do that to my loved ones!”). Choosing a trustee is a deeply personal decision that depends on the size and complexity of your trust, your family situation, and your priorities for administration and oversight. For many, a hybrid approach—naming both a family member and a corporate trustee as co-trustees—offers the best of both worlds: professional management and personal insight. While I can’t possibly speak to my readers’ individual risk preferences, there are clearly certain factors that might lend themselves more favorably to a corporate trustee selection in a given situation. All other things being equal, you may want to consider appointing a corporate trustee in the following circumstances: Your trust is large or complex. There is potential for conflict among beneficiaries. You lack a trustworthy or capable family member to serve. You want to ensure long-term, professional management. The trust includes specialized assets such as real estate, business interests, or significant investments. Before making a final decision, I would encourage you to consult with your estate planning attorney or financial advisor to weigh the pros and cons in your specific situation. After the fact, if you find yourself trying to manage or extricate yourself from inheritance-related entanglements (with or without a trust), you should seriously consider engaging an experienced trust and estates litigator to assist in crafting and implementing an outside-the-box arrangement which might very well result in a third-party, corporate fiduciary as the answer . . . or then again, it might not. I would be glad to offer personal recommendations for an estate planning attorney, financial advisor, or trust and estates litigator, should you be interested. I would also welcome the opportunity to review your situation, provide thoughtful recommendations, and assist with implementation as appropriate. The potential significance and impact of a well-chosen trustee cannot be overstated. In short, there is no “one size fits all” solution, and, simply stated, a corporate trustee may not be right for your situation. A well-chosen trustee (corporate, professional individual, family member, or friend) can provide peace of mind. The wrong trustee choice could mean the dismantling of everything you’ve worked your entire life to accumulate and damn your loved ones to costly and frustrating litigation. Too dark? I wish. Trust management legal issues might account for only a small fraction of trust cases, but the actual percentage is of little or no consequence when 100% of the cases I’ve seen on a continuous basis for over 25 years involve some form of dispute with or over the trustee. “What about a ‘trust protector’ arrangement?” you ask. “Should I be insisting on one of those for my trust?” Next time!
July 24, 2025
Estates and Trusts
Corporate Trustees: Smart Choice or Risky Move?
Whether you name a financial institution to manage your trust assets when you are no longer able to do so for yourself, is ultimately a matter of personal preference and choice. In the first part of a two-part “point-counterpoint” consideration of corporate trustees serving as such for individuals’ personal trusts, I examine the potential advantages and reasons to do so. I’ll share the other side of the conversation—the potential drawbacks of naming a corporate trustee next month. What Is a Corporate Trustee? A corporate trustee is a bank, trust company, or professional fiduciary institution that manages trust assets for a fee. Such entities specialize in administering trusts and are regulated by state and federal laws to ensure ethical and competent asset management and protect against fraud and abuse. So, what are the advantages of utilizing a corporate trustee? Why should you name a financial institution to manage your trust? Is it the best choice in your situation? Consider the following top five advantages of a corporate trustee: Professional Expertise Most corporate trustees bring extensive knowledge in investment management, tax planning, fiduciary law, and trust administration. Managing others’ assets is what they do; it’s (typically at least) all they do. This can be especially valuable for complex trusts or large estates, where mistakes could be quite costly and have a substantial impact on the trust assets and both current and future, vested and/or contingent beneficiaries. Clearly, the level and extent of such expertise matters. When evaluating the potential advantages of a particular corporate trustee, consideration should be given to years of experience and the depth of knowledge of the team expected to manage one’s trust assets. Impartiality Face it, family dynamics can be, well, complicated. Appointing a family member or friend as trustee can sometimes lead to unintended and unforeseeable conflicts or strained relationships, especially when it comes to issues such as how to invest and whether and when to make distributions. For example, we only narrowly avoided litigation recently when one of several sibling beneficiaries determined herself to be on the wrong side of preferential treatment by their deceased parent’s hand-picked trustee, a long-time close family friend. For the trustee’s part, it was difficult not to play favorites when certain of the sibling beneficiaries considered and treated the trustee like family, while the lone sibling saw the trustee as nothing more than a favorites-playing impediment to her inheritance. In principle, at least, a corporate trustee affords objective decision-making, free from personal bias, or emotional involvement. Continuity and Reliability Unlike individuals who may become ill or infirm, die, or relocate, corporate trustees typically afford long-term stability and continuity. This can be particularly useful for trusts designed to last for decades or span multiple generations. Here too, however, one would be well-advised to recognize that not all trust companies are created equal. It is important to inquire about those trust company employees who will oversee and provide day-to-day management decisions regarding your trust and what, if any, checks and balances there might be if and when staffing changes occur. Fiduciary Duty Corporate trustees are legally bound to act in the best interests of the beneficiaries and are held to high fiduciary standards. Most also carry insurance and are subject to regulatory oversight, which adds extra layers of protection for beneficiaries who might not even be born at the time of making the trust. I note here, as well, that a generally conservative approach (erring on the side of caution – for the benefit of future/contingent beneficiaries) when it comes to investment/distribution decisions not only serves to provide an added layer of protection for the intended future beneficiaries but, thinking cynically, also happens to align with a corporate trustee’s own pecuniary self-interest, i.e. concomitantly serves to generate higher income for the institution. Administrative Efficiency Trust administration requires ongoing tasks, including record-keeping, periodic tax filing obligations, asset (re-)valuation responsibilities, timely periodic noticing, and asset distribution requirements (discretionary and mandatory). Corporate trustees generally maintain systems and staff to manage these responsibilities efficiently and accurately. At a minimum, one should evaluate a potential corporate trustee’s abilities and track record in this regard.* *As a pertinent aside here, I note that certain individual professionals offering “trustee services” (accountants, for instance) might afford a similar level of administrative efficiency, along with the types of fiduciary protections, professional expertise, and one or more of the additional benefits described above.
June 27, 2025
Commercial Litigation
Why Is Estate Planning So Important?
‘Tis the season! It’s that time when we look back on everything we accomplished or failed to accomplish over the past year and, at least for some of us, resolve to do better. Lose weight, get in shape, declutter, get organized, and plan for our own death or loss of sufficient mental or physical capacity to make decisions or care for ourselves. Admittedly, this last one, “estate planning,” as some lawyers no doubt euphemistically dubbed this general category, is a perennial dark horse in the “most likely to top the list of year-end resolutions” category. Excuses range from “I don’t have enough to need an estate plan” to “I’m never gonna die” to “I’ll be dead, so it won’t be my problem.” Not much, if anything, can be done for the ones with delusions of infallibility or those truly relishing the idea of looking back from beyond the grave, eating popcorn and enjoying the misery left in their wake. Undecided? Unconvinced? You’ve got questions, and I have some answers… Q: Why should I care about estate planning? A: Estate planning is essential for ensuring that your assets and personal wishes are properly carried out after you’re gone. Creating and regularly updating a personalized plan unique to your life circumstances is not just about redistributing wealth after you pass away—it’s about protecting your family, minimizing tax burdens (!), and avoiding legal confusion. Without a clear plan, the state decides what happens to your property, which often results in costly, but otherwise avoidable, legal disputes, delays, and unintended results. Q: What’s the biggest mistake people make with estate planning? A: The biggest mistake is simply not planning at all. Last year, I shared my list of the top five estate planning mistakes that I see in my litigation practice (when my clients are routinely forced to dispute and/or litigate over an unintended and unforeseen aftermath). The number one takeaway remains as obvious today as it was last year (and the year before that!) -- failing to plan is the most costly mistake you can make. Failing to plan (or to update an existing plan) leaves your family and loved ones vulnerable and can complicate things emotionally and financially during an already difficult time. Q: Do I really need an estate plan if I’m young and healthy? A: Absolutely! Estate planning isn’t just for the elderly or those with significant wealth—it’s for anyone who wants to make sure their wishes are carried out after they’re gone. We may want to believe we’re infallible and will live forever. Unfortunately, life is unpredictable, and having a plan in place provides peace of mind, ensuring that your family is taken care of no matter what happens. My first boss after college taught me to plan for tomorrow as if the person upon which you are depending tragically gets hit by a bus tonight. It was admittedly a dark life lesson (thank his lifetime of military service!), but he wasn’t wrong to suggest we never know what “bus” might be looming around the next corner. Q: Is estate planning a one-time thing? A: Estate planning should be an ongoing process. Life changes—marriage, having kids, career changes, etc.—are all good reasons to review and update your estate plan regularly. A plan that’s right for you now may be completely unsuitable for you when life changes happen . . . and they do happen! So it’s important to revisit your plan regularly as your life evolves. Q: How does one get started with estate planning? A: Start by consulting with an experienced estate planning attorney who can guide you through the process. I’m not an estate planner myself, but I am fortunate to work with some incredibly talented individuals (in whom my wife and I have entrusted our own planning needs!). I’ll be happy to provide a threshold assessment and introduce you to a colleague with whom I believe you’d be a good match. From there, you will work to outline your goals, create a will, set up a trust, and/or designate “attorneys in fact” to protect your interests and exercise authority as you deem appropriate under powers of attorney. Proper estate planning benefits your loved ones and you both now and after your gone. The key is not to wait—resolve to take action today to protect your future and your loved ones. I have a client who travels a fair amount, and for years now has joked how I’m the last person he thinks of as his plane is about to takeoff as he is again reminded that he hasn’t done his estate plan. Trust me when I say the money you spend (and don’t short-shrift the old adage “you get what you pay for!”) will repay itself multiple times over for your family when the time comes. Do yourself and your loved ones a favor. Give yourself and them some added peace of mind. Don’t just resolve to plan…just do it.
December 10, 2024
Commercial Litigation
Does Neurodiversity Matter?
Is your organization “neurodiverse?” Do you care? Should you? I recently caught a podcast promoting "neurodiversity" and “neurodivergence” - terms with which I was not previously familiar. If you, like me, are new to the concepts, I commend you to the following vocabulary lesson: Neurodivergent & Neurodiversity: Meanings & Examples (exceptionalindividuals.com). Seems my ADHD affliction casts me unexpectedly among an often-marginalized minority group of "exceptional individuals." Trust me, the dual entendre is not lost on me. I've not yet fully looked into the naming decision. However, I am confident the dual meaning of "exceptional" was purposefully adopted. As a newly self-aware neurodivergent and one serving on our law firm’s DEI Steering Committee, I now find myself questioning the measures and manners of diversification we choose to promote (and how many more we consciously choose or unknowingly fail), both individually and collectively, to recognize. How narrowly or broadly should we be promoting diversification of our firm’s workforce? Much like the LGBT community itself has struggled and still struggles today to determine and agree upon who to welcome under the tent, to be true to its name, ought, perhaps, those promoting DEI initiatives take a moment to appreciate and address the reality that the pillars of the movement, focusing for the moment only on diversity and inclusion, might be more narrowly or broadly defined. How many cynics and skeptics pre-disposed to reject DEI initiatives as inappropriate race, sexual preference, and/or gender-based proxies might soften their opposition if the storyline were recast so as to avoid altogether a "we-they" lens and be contextualized instead by the guiding concept that a heterogeneous workforce benefits everyone? President John F. Kennedy self-deprecatingly credited his success to having surrounded himself with a diversity of opinions, believing that a cabinet of like-minded “yes-men” would be self-defeating (and mostly redundant). Leaving for another day a more thoughtful look at the inequities sought to be addressed by the “E” in our collective DEI efforts (and noting in this context as well, the separate quest of some to expand such initiatives and their overarching acronym to recognize a “B” for Belonging, where everyone is not only invited to have a seat at the table but also is made to feel welcome to do so), encouraging and promoting diversity and inclusion ought, fundamentally, be founded upon a conscious effort to achieve a sum greater than its parts by bringing together those of differing perspectives. As another exceptional individual shared with me on this point, it’s not a “zero-sum” situation where one group’s loss is another’s gain. Everyone benefits! So, I ask again . . . is your organization neurodiverse? Should you care? Hopefully, we can all agree, at least, that knowing and appreciating what neurodivergence means is a good first step in answering the question. Understanding the potential value of incorporating neurodivergent individuals in professional work environments and, in turn, harnessing such potential virtually assures “group-think” avoidance. What naturally flows from this recognition is an appreciation that diversity, in general, is a favorable objective. Striving to achieve a more diverse and inclusive work environment is important because, just as a rising tide lifts all boats, diversity, by definition, brings a broader depth of experiences, perspectives, and ways of looking at problems, everyday situations, and, yes, even legal issues and arguments. Whether to consider and promote diversity -- neurodiversity or otherwise! -- is not simply an objective (or subjective!) question of doing the right or wrong thing. Nor, I suggest, is promoting a DEI agenda necessarily a matter of identifying and overcoming biases or prejudices (although these certainly play an unfortunate and unacceptable role in environments developed absent DEI considerations). Rather, I believe caring about issues such as neurodiversity and diversity more generally leads to avoiding tendencies towards like-mindedness and “group-think,” and, speaking apolitically, I believe that President Kennedy had it right when he made a point of assuring that a diversity of opinions informed his ultimate decision-making. Should you care if your organization is neurodiverse? Of course you should.
October 7, 2024
Commercial Litigation
Gut Punch...No Regrets
Sometimes a “win” feels like, well, . . . not a win. Sometimes a “win” comes at such a significant cost that the diminished value of the victory forces one to question whether it was a win at all. The Battle of Bunker Hill is a notorious “pyrrhic victory” during which the British troops occupying Boston eventually overran the vastly outnumbered rag-tag assemblage of defending militiamen but not without suffering substantially greater casualties than expected. The battle, nominally a British victory, proved to be an encounter the British would much rather forget than tout as a win. Similarly, a prize fighter’s successful defense of his boxing title by technical knockout leaving him perceptively weak and vulnerable to challengers, perhaps even severely injured, might leave him questioning whether, in hindsight, the public beating taken in the ring was truly a “win” for which it was worth fighting. I recently experienced an unqualified “win” for a client followed by a sucker punch I didn’t see coming . . . a “gut punch” unexpectedly bringing me to my knees and requiring the equivalent of a “standing 8-count” to shake off and get my head right. While it didn’t come with bloodshed or a championship belt, it did come with loss of life and a serious cause for pause. The Set-Up I’d been contacted and engaged by a non-familial attorney-in-fact on behalf of a lovely 90-year-old, bed-ridden, “stage 4” diagnosed, short-timer. For these purposes, I’ll call her “Joy” -- because she certainly was! Joy was a pistol. Although end-stage, unable to leave her bed, and receiving hospice care when I met her, Joy was feisty. I certainly had no doubts about her mental capacity. She knew what she wanted and had no issue telling you! What she didn’t want was a guardian or conservator appointed for her – least of all her 30-year estranged family member (“Pat”) who, from thousands of miles away, had only begrudgingly made the trip to see Joy and, even then, chose to disrespect her by removing and requisitioning Joy’s dining room chandelier before bothering to say “hello!” Soon thereafter Pat had returned home and engaged local Virginia counsel to assist Pat in securing complete control over Joy as both guardian and conservator. Suit was filed and a Guardian ad litem (GAL) already appointed by the time I got the initial call. Joy was having none of it and was non-plussed. For her part, Joy, with the help of her attorney-in-fact, had engaged reputable counsel to redo her estate plan writing Pat (and Pat’s equally estranged sibling, who couldn’t be bothered to pay respects) completely out of her will. I know what you’re thinking at this point – was the non-family member taking advantage of Joy and now the object of all of her bounty? Nope. Joy kept it in the family but skipped a generation leaving everything she owned to the grandchildren she’d never been allowed to know. In what turned out to be her final days, Joy wanted nothing more to connect with and meet the now adult grandkids she’d never met, but my requests through counsel on her behalf went unanswered. The “Win” Having personally met with and preliminarily concluded Pat needed no guarding or conservation, I was easily able to convince Pat’s counsel that there was no need to rush to judgment and coordinate a cooperative approach to allowing an independent assessment by the court-appointed GAL – who, by the way, was equally easily convinced of Pat’s mental acuity and just as willing to minimize her involvement so as to avoid unnecessarily running up legal fees. I convinced Joy to allow me to share her new estate plan documents so Pat’s counsel could see and share with Pat that mom was not giving it all away to who knows who and clearly had a plan – a plan reflective of the non-existent relationship Joy had had with her children . . . a plan without Pat. With no basis for denying Joy her freedoms of choice, Pat’s counsel pursued a voluntary dismissal. With everyone doing the “right thing,” a lot of money and heartache was spared and I had successfully defended Joy’s interests without so much as having filed a single pleading or attended a single hearing. No formal discovery was needed; judicial economy was maximized. Joy was happy. Joy’s attorney-in-fact was happy. I was happy. Joy was at peace. Joy passed several days later. The “Gut Punch” With Joy’s passing, there was still work to be done, of course. In keeping with Joy’s wishes, Joy’s attorney-in-fact, now Executor under Joy’s will, made arrangements for the final disposition of Joy’s remains with no public service or ceremony. I reviewed the published eulogy with interest and a strange deference, considering I’d only twice met Joy in person and only known Joy for a few weeks. Count this one as a “win,” I thought. Hold this out as a case study on how every case should go, I concluded. I’d even begun composing the article in my head. That’s when I got the call. Joy’s other long-lost offspring had been given my number. It seems there’d been no love lost between Joy and himself over the years and he’d deferred to Pat to address mom’s final illness. With news of Joy’s death still fresh, he was calling to let me know that Pat had just taken her own life. There it was – his own self-described “1-2 punch combination” which had apparently left him feeling weak in the knees, was the punch to the gut I didn’t see coming. I sat dazed and speechless as he shared the unsolicited gruesome reality of Pat’s disposition as his story morphed into the impact on Pat’s situation on the grandkids – remember the grandkids? He transitioned effortlessly again to talk of wanting to be “fair to the kids” (appearing now to be indirectly referencing Joy’s estate and believing, based on apparently nothing in particular, that Pat’s kids would somehow be short-shrifted with Pat’s untimely demise). In that moment, I caught my breath and lifted myself off the mat with the revelation that he had been written out of the will and the grandkids were to receive everything. “So that’s it, then, huh.” “Yes.” Conversation over. After an awkward silence, he hung up. The Aftermath I’m not sure which had hit harder, news of Pat having taken her own life or the impact of her doing so on the sibling and children she’d left behind. I suppose that in my line of work I ought to be grateful I’ve not faced more such situations. Quite candidly, I’ll concede I’m not sure this would still be my line of work! There was no championship belt for my performance, nor was one deserved. Still, a win’s a win, right? I take solace in knowing that I served my client’s interests cost-effectively, efficiently, and professionally. I successfully protected her legal rights and helped her die with dignity and at peace. The tragic aftermath left in her wake was not of my doing, but rather the apparent consequences of lifetimes of regret about which I know little more than hinted at here and with which I had no involvement. I think it’s important to recognize that our wins and losses as litigators are life-altering events for our clients and their “adversaries” (aka family members, in my specific line of work). I think the struggle comes from the juxtaposed need to be independent-thinking, dispassionate, third-party trained professionals and the inherent value in appreciating the emotional toll and impact the circumstances have on not only our clients but also those caught up in outwardly expanding ripples left in litigation’s wake. My takeaways? If nothing else, I learned I could take a punch. I still what I do . . . for now, at least. Personally, I suggest calling your mom; hug your kids before it’s too late. Professionally, in a personal services context, caring still matters. It’s important to remember that people generally don’t care what you know unless they know that you care, but if they don’t care that you care, you don’t need them.
August 30, 2024
Commercial Litigation
A Divorce Checklist – Death and Bankruptcy Considerations
A substantial portion of estate and trust litigation and post-divorce enforcement litigation (“contempt proceedings”) is rooted in failures or shortcomings in negotiations or drafting during the divorce process itself. Here is a recommended “best practices” checklist of questions developed based on my nearly three decades of bankruptcy, creditors’ rights, collection and enforcement, and estate and trust litigation. This “best practices” checklist for family law (aka matrimonial law) attorneys, divorce lawyers, those contemplating divorce, and those, perhaps, already in the throes of post-divorce contempt proceedings tracks with my recently published List of “Top 5 Divorce-related Financial Protection Failures”. It incorporates lessons learned “the hard way” from potentially avoidable situations occasioned or worsened when the questions compiled here had not been considered or, if asked, ineffectively taken into account by the drafting attorneys involved in the first instance. This checklist is a practical, check-the-box application of the “Top 5 List” broken down into specific questions to be asked and answered by all involved in the divorce process. The checklist can and should be relied upon and applied (in whole or in part, depending on the circumstances) during multiple phases of a divorce proceeding. The checklist should help guide drafting considerations during negotiations of a Property Settlement Agreement when trying to avoid or limit costly equitable distribution litigation to determine how much each spouse is equitably to receive; otherwise to be measured by what portion of which assets the judge determines most appropriate after costly hearings. The checklist similarly serves to guide drafting considerations of the final divorce decree itself. Furthermore, although the checklist is intended to reduce costs and delays associated with post-divorce litigation used to hold a non-compliant spouse accountable when not adhering to one or more financial terms of the divorce, it can be equally effective during these contempt proceedings at aiding decision-making and providing both cost-saving guidance and time-saving benefits for the user. If routinely followed and effectively applied, the checklist should serve to help avoid unintended negative financial consequences while reducing future litigation and related legal fees, costs, and delays. THE CHECKLIST Insurance Notice to Provider - Has the insurance company (and/or benefits provider) been notified and / or asked about relevant policies and procedures for irrevocably assigning policy proceeds (and precluding unilateral re-designation of beneficiaries by the insured)? Beneficiary Re-designation - Have policy beneficiaries been irrevocably re-designated to identify ex-spouse (and/or child, children, or trust) expressly by name? Account Access – Has perpetual real-time account access to policy information (including, most importantly, payment status and continuing coverage) been irrevocably established? Employment Coverage - If relying upon employer-provided insurance coverage, have conditions or contingencies been established for the continuance of coverage upon termination, or if work-related coverage benefits ceases to be provided for any reason? Premium Payments - What specific protections (e.g., Irrevocable Life Insurance Trust (ILIT) or escrow) have been established to assure continuity of premium payments if the debtor-spouse refuses or is unable to pay for any reason? Real Estate Clean Title - Have you verified that there are no mechanics liens, judgment liens, or other title impediments? Premature Death - Have you analyzed and provided sufficiently for the possibility and potential impact of the premature death of either spouse? HELOC - Have you protected against additional credit extensions in addition to making appropriate arrangements for payoff or paydown? “Robbing Peter” - If an asset is to be liquidated and paid over in whole or in part, have you established consequences, contingencies, and otherwise protected against proceeds of the asset(s) being improperly disposed of, including in satisfaction of a separate financial obligation? Retitling/Disposition – Have you documented that “time is of the essence” and maximized protection of “reciprocal rights” against bankruptcy and/or failed pre-condition(s) to relinquishing, re-titling, or otherwise disposing of assets, especially real property assets? Retirement Accounts/Benefits Notice to Providers - Have all benefits managers/providers of relevant retirement accounts and benefits been given sufficient notice of all changes? Beneficiary Re-Designations - As with insurance coverages, have all beneficiaries been appropriately and irrevocably re-designated? Claim Deadlines – If in a jurisdiction with time limits on claims against a decedent’s estate (e.g., MD – 6 months), have adequate disclosures been made to assure timely action after death? Spousal Payout Elections – If applicable, have appropriate elections been irrevocably made to assure manner and means of payout after death (e.g., continuing spousal payments v. payments terminating at death)? Borrowing Restrictions – Have any outstanding loans against any retirement assets been factored in for valuation purposes and future borrowing against such assets been appropriately and irrevocably restricted? Bankruptcy Jurisdiction - Do you know what, if any, continuing jurisdiction the “divorce court” has if a bankruptcy is filed? Different Chapters - What difference, if any, would the filing of a Chapter 7, 11, 13, or “Subchapter V” bankruptcy have on your situation? “DSO’s” - Have you negotiated financial obligations regarding future PSA payments concerning whether they are subject to characterization under bankruptcy law as “domestic support obligations?” “The Automatic Stay” - Are you prepared to seek relief from the automatic stay and or pursue enforcement in bankruptcy court if a filing is forthcoming? Corporate Assets - If division and/or control of corporate assets by or between one or both of the spouses is/are to be factored, has a potential bankruptcy filing been accounted for with relevant valuation and enforcement considerations? Collectability Limitations Contempt Jurisdiction - Have you sufficiently familiarized yourself with binding local precedent regarding the scope of continuing contempt jurisdiction of the “divorce court” in the event of a bankruptcy filing? Bankruptcy Clawback/Discharge - Have you evaluated whether, and/or the likelihood of, future financial obligations might be subject to clawback or discharge in bankruptcy (and/or how the outcome/impact might differ depending on which bankruptcy chapter or sub-chapter is pursued)? Third-Party Requirements - For known assets held or controlled by third parties, has/have any specifically needed language been incorporated into the PSA, divorce decree, or contempt order to avoid later having to seek additional judicial relief as a pre-condition to third-party cooperation? Escrows/POA’s - Presuming future ex-spouse noncompliance, what, if any, limited power of attorney language and/or separate writings might be included, created, and/or escrowed to avoid, potentially altogether, future ex-spouse involvement? “Double-Duty” PSA - As a potential failsafe, have you incorporated language of present intent and otherwise satisfied necessary elements for the PSA itself to serve if/as needed as a deed, written assignment, or other ownership conveyance? (See [TWR’s “PSA as Deed”] and [TWR’s “PSA as Equitable Assignment”]
July 11, 2024
Estates and Trusts
Top 5 Divorce-Related Financial Protection Failures
Inadequate Insurance Assurances Uncorrectable Real Estate Refinancing/Retitling Shortcomings Unclaimed Retirement Benefits Unconsidered Bankruptcy Impacts Unconsidered Collectability Limitations Death and Insolvency Considerations as Divorce-related “Best Practices” Divorce lawyers routinely fail to protect clients against an ex-spouse’s failure and/or outright refusal to comply with the terms of the documents governing the termination of the marriage relationship between their client and their client’s soon-to-be ex-spouse. As an estates and trusts litigator, with nearly thirty (30) years of relevant creditors’ rights and bankruptcy experience, I have seen innumerable cases involving avoidable–if not always easily foreseeable!–situations occasioned at least partly by shortcomings in the language of the documents generated and relied upon in a client’s divorce proceedings. In short, many, if not most, of the more costly post-divorce, death-related and non-compliance enforcement/collection matters can be substantially mitigated, if not completely avoided, by additional considerations at the drafting stage. With a backward-looking inquiry addressing “how could this ‘new’ costly litigation have been avoided?” assuring that these death and collection-related matters make the “best practices” checklist in any divorce-related legal planning only makes sense. Top Five Divorce-related Financial Protection Failures The top five divorce-related financial protection failures are as follows: Inadequate Insurance Assurances – Failure to assure irrevocable designation of proper policy beneficiaries and unlimited access to policy-related information are primary among divorce “to do” list items not done. Similarly, divorce lawyers do their clients a disservice by failing to take sufficient steps to assure that insurance coverage remains in place, typically by neglecting to include a plan or structure assuring the payment of, and means to make, policy premium payments. A written assignment of policy proceeds is a necessary consideration, as is job-loss protection against either potentially willful or involuntary loss of employment where the insurance coverage relied upon is a benefit provided by a spouse’s employer and, therefore, only an option so long as the employment continues. Providing for a client anticipating death benefits to have perpetual, real-time access to policy information is an easy way to afford a client the means to protect themselves against the future indifference and/or neglect of a willfully non-compliant ex-spouse who fails to keep up premium payments. In circumstances justifying the added expense, the imposition of and well-considered funding of an irrevocable life insurance trust, or “ILIT,” may provide the highest level of protection short of pre-paying policy premiums for the entire life of the policy (which is itself, a non-option in more than 99% of cases). Uncorrectable Real Estate Refinancing/Retitling Shortcomings – Failure to provide properly or sufficiently for failed refinancing/retitling of marital assets converts a hypothetical remedial benefit into a potentially cost-prohibitive non-option. Many divorces include commitments to sever ties between spouses both as to title and financing commitments related to the marital residence or other jointly held real property. It is not enough to provide for a simple “what if” scenario involving the failure to refinance, retitle, or otherwise dispose of a real property asset by one spouse for the benefit of the other, or, for that matter, to include some form of reciprocal rights of the other spouse in the event the first fails to achieve the contemplated refinancing, retitling, etc. Best practices in this regard ought to consider unanticipated, untimely death-related scenarios. For instance, what if the hypothetical “what if” scenario arises because of suicide? What if the titular owner of the real property dies unexpectedly before carrying out the contemplated transfer of title? Thorough planning in this regard would necessarily consider the existence and potential interaction of an existing will or trust, or of the intestacy hypothetically arising due to the lack thereof. Unclaimed Retirement Benefits – Much like the unfortunate situations involving life insurance policies with unchanged beneficiary designations, failure to provide for proper notice and/or re-designation of retirement plan beneficiaries can mean the difference between a divorce client’s future perpetual financial security and potential ruin. First and foremost, it is not enough to include a provision in a divorce-related agreement that one simply agrees that a particular someone shall receive the proceeds of one’s work-related pension, 401k, or other ERISA-qualified retirement account. In fact, it is not enough to include such a commitment generally in one’s will, trust, or other testamentary document. One must communicate one’s change in beneficiary designations directly to and with the account broker/provider (or, in many cases, through official means managed by one’s employer acting as the provider’s agent). Such a change is most typically accomplished by submitting a signed beneficiary designation change form or via an electronic equivalent. Again, it is not enough to request such a form, or even to complete such a form without “delivery” of such a form to the provider or its agent. Here, best practices should include confirmation requirements and not merely a commitment to timely effect the change. Query whether pre-compliance, untimely death considerations ought not also be taken into consideration in this instance as a best practice, as well. The better question is why one wouldn’t at least include this on the checklist of considerations when deciding whether to expend any additional resources in protecting against such a risk. Unconsidered Bankruptcy Impacts – Failure to contemplate “what if” scenarios of possible bankruptcy filings by either or both divorcing parties or a related business entity (e.g. individually to try to delay or avoid support obligations or of a business the value, cashflow, and/or operational continuity of which as a critical marital asset served to leverage negotiated concessions). There is no “one size fits all” bankruptcy provision to plug into divorce-related property settlement agreements, just as every divorce gives rise to a necessarily factually unique set of circumstances. What is most important is that when negotiating asset transfers and contemplating spouse #1 v. #2, one factors the potential impact of bankruptcy scenarios into asset values and negotiates accordingly. Client risk tolerances and, possibly, actual threats or perceived intentions regarding post-divorce bankruptcy filings comprise the most important considerations. One does not necessarily need to incorporate potential bankruptcy language in every divorce agreement but failing to make or seek a bankruptcy risk/impact evaluation only invites subsequent client dissatisfaction, potential Bar complaints, and perhaps even potential malpractice considerations. Unconsidered Limitations on Collectability – Failure to consider requirements of financial institutions and other third-party asset holders likely comes at a future cost and with potentially significant unwarranted delays. It should be no surprise that divorcees do not always live up to their financial commitments in divorce-related agreements and/or divorce decrees. Contempt proceedings and related remedies are not unto themselves the only mechanism to be employed when it comes to securing payment and satisfaction of divorce-related financial obligations. In fact, contempt proceedings themselves generally give rise to additional financial obligations, the collection of which is not a foregone conclusion and rarely, if ever, immediate. Contempt awards are frequently not satisfied immediately. Consequently, the financial relief a successful contempt proceeding is intended to provide often comes, if at all, only after imposing additional financial burdens on the “creditor spouse.” When a “debtor spouse” refuses to make divorce-obligated payments, a creditor-spouse can employ the contempt process to quantify and formally liquidate the amount(s) owed in an enforceable court order (sometimes coming only after the threat of or actual jail time). Having secured entry of a liquidated contempt order amount, one still needs to enforce the order to satisfy the newly liquidated debt. Such enforcement actions (such as garnishments, attachments, asset seizures, turnover actions, etc.) again mean additional legal fees and costs, but here’s where some pre-planning can potentially reduce or avoid even more fees, costs, and delays. Applying some “creditor’s rights” know-how during the contempt process, including considering known third-party asset holder’s risks and requirements, can be a substantial difference maker. It might very well avoid altogether the need for a secondary enforcement proceeding.
June 20, 2024
Estates and Trusts
Five Biggest Mistakes of Estate Planning
#5 - Inequity The fifth biggest mistake of estate planning is presuming to treat everyone equally, equaled only by the error of presuming to treat your loved ones differently because you don’t think they need anything or, in the other extreme, that they don’t deserve anything. Perhaps you’ve given more to one in life and intend to balance things in death. Unless you intend to include a detailed accounting (and even then?), I urge you to reconsider in this regard. Similarly, choosing who is to serve in what role (attorney-in-fact under a power of attorney, executor, or trustee, for instance) based on perceived fairness or not wanting to seem inequitable is a mistake. Have a reason, trust your judgment, and choose someone based on your sound judgment (for instance, she’s the oldest; he’s a lawyer; she’s the only one who hasn’t done time… these are all good reasons). Worse, appointing two co-fiduciaries (i.e., co-attorneys-in-fact, co-executors, or co-trustees, might be the biggest mistake of all - especially if you refuse to provide the two co-equals with a means of breaking a deadlock. If there are two empowered to make decisions and they don’t agree on something, if you’ve not authorized a coin flip or other means to break the tie (rock, paper, scissors, perhaps?!), their only recourse is to the courts. Don’t do it…don’t name two co-equal decision-makers to manage your affairs when you die. If you simply can’t help yourself, at least give them a fighting chance and tell them what to do when they disagree (if considering a coin flip, I suggest making it at least two out of three!). #4 – Sentimentality The fourth biggest mistake of estate planning is presuming one or more of your loved ones “wouldn’t want” something of yours, or alternatively, planning based on presumed values ascribed to the “objects of your bounty.” It is difficult to nearly impossible to know accurately what one of your kids might value over another, and you should take no offense by loved ones’ avoiding the subject altogether or making statements to the effect that they don’t want anything of yours. Everyone deals with death and the loss or thoughts of loss of a loved one in one’s own way. That said, it may, of course, be true that they don’t want your stuff; your style and tastes may be embarrassingly outdated. It may also be true that they don’t need anything, have the space for things they might want, or might not want to be perceived as thoughtless or greedy by asking for something of yours, for instance, before you are even in the ground! Rather than take offense or think, “How dare they!” consider over-sharing and discussing more with them, not less. Force them to face truths none of us generally care to acknowledge — first and foremost of which, you are going to die! Hate to be the one to burst that bubble for you, but it happens to all of us eventually. Too often, I see families left squabbling over misperceived intentions and failing/refusing to face these avoidable issues head-on, which brings us to the third biggest estate planning mistake. #3 – Communication The third biggest mistake of estate planning is failing to involve your beneficiaries in the planning. You need not give them a say in your plans necessarily or even seek their input per se, at least not everyone’s!, but that doesn’t mean you shouldn’t involve them at all, even if only to communicate that you’ve made a plan and where/how it can be found. Those who intend to play a role later should be consulted. The executor (or “personal representative”), who will oversee the administration of your probate estate; the trustee, who you will count on to manage assets you’ve opted to have held/protected from creditors and managed for the benefit of those you may not completely trust to manage them effectively for themselves (either because of their immaturity, addictions, or other special needs); and especially guardians of any minor children you might leave behind…these should all be consulted and confirmed before being named and saddled with such responsibilities. After all, they may not want or be able to handle the responsibility and/or their own life circumstances may not be fully known to you and may not make them the best choice. To minimize the risk of mistaken choices in this regard, don’t compound the mistake by failing to name a backup and a backup to the backup and also setting forth a means of picking the person you would want to be next in line should all else fail. #2 – Indecision The second biggest mistake of estate planning is changing your plans. This one comprises a whole series of mistakes. Changing one’s mind is ok, of course. The timing of a revised estate plan is one of the primary factors when litigation is later considered. Doing so after declining mental health, shortly before or after major life events, just prior to death (on one’s deathbed!), and/or with the involvement or input of less than all of one’s beneficiaries virtually assures legal wrangling after you’re gone, or, at the very least, likely breeds ill will among your loved ones in ways you can’t possibly fully anticipate. Compounding this mistake with less than full and open communication about your planning efforts (refer back to #3!) frequently sparks resentment and even hostility when you yourself have set different and differing expectations among those to whom you intend to benefit. If you opt to share your planning documents, do so with all of your beneficiaries. If you opt to make a change, be sure to communicate any changes to everyone, preferably with very specifically communicated reasons why. Oftentimes, in addition to breeding resentment for each other, change, especially uncommunicated changes to one’s estate plan, leaves your loved ones resenting you, even when they are the ones benefiting from the change! #1 – Inertia The number one biggest mistake of estate planning is not to plan. A favorite lyric from a group I’ve enjoyed since the 80s goes as follows: “If you choose not to decide, you still have made a choice.” Not planning, i.e., not creating a will or other document directing the disposition of assets upon your death, is the equivalent of deciding you want your loved ones to experience the costly, time-consuming, living hell that can often be the result of doing nothing. Don’t let inertia be your guide. Have a plan… execute the plan. Do it now; tomorrow may never come. Carpe diem!
January 29, 2024
Litigation
Possession – Is It Really Nine-Tenths of the Law?
What does the expression “possession is nine-tenths of the law” mean? “Possession is nine-tenths of the law” is simply a recognition of presumed ownership. As highlighted recently in an Alexandria federal case over the rightful heirs to four original Norman Rockwell paintings (see Elam v. Early, Case No. 1:23-cv-229), the common law provides that the one possessing property is presumed to own it. On the flip side, one claiming ownership in property possessed by another has one’s work cut out. Why does the common law presume that one in possession is the rightful owner of something? Why does the common law presume that one in possession is the rightful owner of something? Stated alternatively, “Why do we infer ownership from possession?” Because the alternative is too impractical! Imagine a world in which you had to carry or produce receipts or other proof of ownership for anything and everything you own, everywhere, all the time! Absent such proof, you would instead be presumed a thief subject to arrest. One will note that we have developed certain exceptions to the general rule – vehicle registries and cattle branding come immediately to mind. While not expected to produce a car title if stopped by police, drivers are expected to produce proof of registration in part to evidence that the vehicle they are driving isn’t stolen. Similarly, ranchers have a longstanding tradition of uniquely branding their livestock as a means of readily identifying ownership of the animal. The exceptions are generally accepted as appropriate due to the significant value of the items involved. Similar “branding” exists with other items of significant value to which unique identifiers or serial numbers are inscribed or otherwise affixed. While registries and unique identifiers may prove helpful in establishing ownership, however, it must be noted that they, too, merely provide evidence on which one might rely in proving one’s status as the rightful owner. How does one legally challenge the “possession is nine-tenths of the law” presumption? The ability of one not possessing property to establish proof of ownership renders the original presumption rebuttable. One claiming ownership might claim, for instance, that the possessor stole or, in non-criminal terms, “converted” the property. Alternatively, if one had originally come into possession of property legally but subsequently refused to return it, an aggrieved owner of the property might argue that a breach of bailment had occurred. While proof of theft would serve to rebut ownership, it would not necessarily be conclusive in a particular situation where what is ultimately called for is proof of superior title. One might imagine a situation, for instance, where the true owner is shown to have improperly stolen an item back from the original thief. Proof of superior title would prevail as to ownership even if the owner might remain answerable for any legal consequences of the thievery. Establishing proof of a gift of an item is another foreseeable step in a case in which burdens of proof shift back and forth. As a presumption can be rebutted, so too can additional evidence of many kinds serve to support an ownership claim grounded in possession. The challengers in the Norman Rockwell case failed utterly to produce any evidence of superior title such that the party possessing the paintings need not establish, even in the absence of proof that the paintings had been gifted by the decedent prior to death, anything more than unquestioned possession. Proof of a gift is not always impossible, however. Testimony of anyone aware of the gift is generally relevant and admissible, as would be a reference in a gift card (in the event it still existed) to the gift itself. I am reminded of a case of my own early in my career in which my client, for reasons I no longer recall, actually had a Polaroid picture of herself with a gift cuckoo clock and writing from the decedent on the bottom of the frame referencing how pleased he was to have given it to her. Then again, one of my all-time favorite lawyer movies, Legal Eagles (a 1986 romcom starring Robert Redford, Debra Winger, and Darryl Hannah – check out its IMDB), draws a much closer parallel to the Eastern District’s recent summary disposition of the Norman Rockwells. While I’ had not intended this as a movie review or date night recommendation, I can’t help but encourage my fellow law-minded movie lovers to check out this legal classic in which Redford and Winger struggle with proving their non-possessory client’s (Hannah’s) ownership of a valuable painting which ultimately comes down to establishing the existence of a gift inscription on the back of the painting (the fiery pursuit and result of which I wouldn’t dream of spoiling for you!). [You’re welcome in advance for this “oldie but a goodie,” 2-in-1 romcom – “lawyer movie” recommendation, notwithstanding the purposefully only-a-lawyer-could-love, yawnfest of a description! I’ll look forward to reading your critical movie reviews.] Does “nine-tenths of the law” equate to only a 10% chance of successfully challenging one claiming ownership merely by possession? Possession may be nine-tenths of the law, but legally supporting or refuting ownership on behalf of either the one in possession or in favor of the other one-tenth is when you need 100% confidence in the legal advocate you choose to help make your case. Don’t make the mistake of equating “nine-tenths of the law” with a 90/10 probability outcome regardless of who represents you. Good legal representation can increase your odds of success, and indifference in the selection process can lead to unfavorable results. Don’t leave your outcome to chance. Relevant experience matters.
December 13, 2023
Real Estate
When's A Property Settlement Agreement Not A Property Settlement Agreement? (Part Two)
Originally posted on 01/16/20, content updated on 11/23/23 In this second of a multi-part series (read part one here), I consider a second alternative “use” for a marital property settlement agreement, or PSA. With the help of Shakespeare’s Romeo and Juliet, I’ve previously noted that a document need not necessarily be defined solely by its name, and particularly, that a PSA can legally serve as more than merely an agreement settling property rights between spouses contemplating divorce. For instance, in my prior example, a legally enforceable PSA moonlit as a real property deed in the right circumstances. Like a multi-faceted Swiss Army Knife, that same PSA might also serve you further as a written “assignment” if and when no separate, stand-alone, self-titled “assignment” document exists. At least that’s among the possible outcomes I am currently seeking to convince the Virginia Supreme Court to adopt in Wood v. Martin, Record No. 190738! As with deeds in my prior example discussed in Part One, assignments need not be self-contained in a document so titled. Legally speaking, an “assignment” of a right or interest in property is an act by which one person transfers to another, or causes to vest in that other, all of the right or interest the person has in particular property. For instance, assuming no express contractual limitations on my doing so, I might assign an unencumbered interest I have as a tenant in an apartment lease to a new tenant (as opposed to a “sublease” arrangement where I maintain my original relationship and rights with the landlord). “Signing over” a check is another example of a simple assignment which occurs when the payee on the check (i.e. the one to whom the check is to be paid) transfers to an assignee by signing the back of the check as “payable to [assignee’s name]” the right to cash the check and to receive the full face value. In Virginia, any order, writing, or act “appropriating” a fund, amounts to an enforceable assignment of the fund, so long as it appears that the one transferring an interest intended to do so, and the one to whom the interest was being transferred understood as much and accepted it. Certain insurance-related, protectionist statutory provisions serve to prevent creditors from reaching the proceeds of a debtor’s life insurance policy, but certain categories of “creditors” of the insured debtor, including those with a written assignment of the policy proceeds, are expressly excluded from this limitation. So what befalls an ex-spouse anticipating proceeds of a life insurance policy when their former spouse dies without having honored the obligations of the couple’s PSA? Is such an individual protected by the court’s decree and the court-ordered relief to which they’d bargained? Or is the ex-spouse reduced to a mere “creditor” forced to line up with everyone else for a share of whatever else the deceased may have left behind? If a consensually court-ordered PSA serves to transfer from one spouse to another the former’s interest in life insurance policy proceeds (including the legal right to designate the beneficiary of same) and incorporates the latter’s acceptance of the transfer, nothing more is required to effect a written assignment under such circumstances. Having been granted such a right in the policy proceeds, the surviving ex-spouse, as assignee of the proceeds, is the rightful owner thereof, and not merely a “creditor” to whom the general exemption statute (Va. Code § 38.2-3122) applies (see Faulknier v. Shafer,264 Va. 210, 216 n.6 (2002), reserving on this issue). As such, both the potential statutory bar to recovery for divorcees as “creditors” of their ex-spouses and a possible malpractice trap for unwitting divorce lawyers are thereby mooted — at least insofar as proper notice of the assignment is provided to the insurer before another creditor perfects a priority claim to the proceeds and/or the insurer, without notice of the PSA assignment, pays out the proceeds to a differently named beneficiary. Much like a delivered but unrecorded real property deed, a PSA assignment is not invalidated or rendered unenforceable merely because the insurance provider wasn’t timely provided a copy, or because the provider’s assignment form wasn’t used. Again, like a deed, there are no “magic words” or specific forms required to create an assignment, and the document creating and embodying an assignment need not be called such. So when is a property settlement agreement not a property settlement agreement? When it’s a legally enforceable written assignment, of course. [Practitioner’s Note: One shouldn’t underestimate the potential significance of the insurer’s notice requirement(s)! Failing to meet the insurance provider’s notice requirements or other procedures for perfecting an assignment might, in limited circumstances, force a PSA doubling as an assignment to cede priority on equitable grounds to other would-be claims to the policy proceeds. For instance, while an unnoticed PSA assignee’s assignment remains no less valid and enforceable, the holder of such an assignment must anticipate taking an equitable back seat to either or both one who subsequently lends against the value of the assigned policy proceeds without knowledge or notice of the PSA obligation and/or another (subsequent spouse, perhaps?) who similarly bargained something of value in exchange for being named beneficiary of the proceeds and, unlike the unnoticed PSA assignee, timely took the necessary steps with the insurer to perfect their bargained-for interest.]
November 23, 2023
Real Estate
When's A Property Settlement Agreement Not A Property Settlement Agreement? (Part One)
Originally posted on 11/20/19, content updated on 11/20/23 In this first of a multi-part series, (read part two here) I address some of the multiple potential “uses” to which one can put a property settlement agreement, or PSA, to use when other options aren’t available. “How’s that?” you ask. For starters, to constitute a deed in Virginia at least, one thing not required of a document is that it be titled “deed” to be a deed. To be a valid Virginia deed, a document – regardless of its title — must reflect a “present intent to transfer” to an identifiable recipient and actually be signed by one transferring an interest insufficiently identified the real property. In the course of assisting a judgment-creditor client pursue a multi-million dollar, post-judgment collection, we sought to reach some real property of a debtor in partial satisfaction of the judgment amount. The crafty debtor had successfully avoided finalizing his divorce from his estranged wife such that, according to the land records at least, the couple’s real property appeared to remain subject to “tenancy by the entirety” (TBE) protection from creditor claims. However, a little third-party discovery from the debtor’s estranged spouse confirmed that she claimed no interest in the property pursuant to a legally enforceable PSA entered into by the estranged spouses (despite not having finalized their divorce). The PSA terms included an expression of her present intent to transfer to the debtor-spouse all of her interest in the couple’s real property, which was sufficiently identified for Virginia deed purposes. Our adversary sought pre-trial dismissal arguing (among other things) that a PSA could not be a deed and that even if one could, this PSA wasn’t one because it lacked any “present intention to transfer” language. Accepting the premise that the PSA itself could legally be a deed, the Circuit Court refused to dismiss the case, and instead, afforded the judgment-creditor the right to have a jury decide whether the PSA sufficiently expressed the non-debtor spouse’s “present intent to transfer” the real property. Voila! When is a property settlement agreement not a property settlement agreement? When it’s a deed! In my example, a little creative lawyering (and a receptive, open-minded judge!) afforded the judgment-creditor client newfound negotiating leverage from a seemingly unassailable TBE property interest of a “married” judgment-debtor. At least on that occasion, called upon to serve the judgment-creditor’s need as “deed,” the estranged couple’s PSA unwittingly “doffed” its name, yet smelled every bit as sweet, indeed! (See what I deed there?)
November 20, 2023
Intellectual Property
Are You Properly Licensed to Sing “Happy Birthday”?
Originally posted on 02/20/20, content updated on 11/17/23 It can’t possibly be illegal to sing “Happy Birthday”… can it? We sing “Happy Birthday” about as often as we mow the lawn, fill up the car with gas, or go to the grocery store. Until recently, however, we may have been doing so illegally, depending on the circumstances. It’s easy to forget (if one ever was even aware in the first place!) that someone first wrote a tune and that intellectual property rights might extend to something as basic as “Happy Birthday.” Particularly egregious violations of such IP rights [note tongue firmly in cheek!] might include summer campfire renditions, or worse, heaven forbid (!), posting a YouTube video in blatant disregard for such legally protected rights. Fear not! (well, fearless, at least…) As a result of a major lawsuit involving the copyright’s claimed owner at the time, Warner/Chappell Music, the Happy Birthday tune, written in 1893 by Patty Smith Hill and her sister Mildred J. Hill (originally titled “Good Morning to All”) is now in the “public domain.” Additionally, after the American Society of Composers, Authors and Publishers (ASCAP) threatened years ago to sue the Girl Scouts, among others, the American Camp Association (ACA) and ASCAP reached an understanding costing the ACA thousands of dollars a year to assure legal campfire singing of copyrighted music – the ACA licenses all of ASCAP’s licensed music for all ACA-accredited camps! [Legal disclaimer: Posting a video of your little campfire girl performing even an ACA/ASCAP-licensed tune requires its own special license (available through ASCAP’s Internet Licensing Dept – for a small fee, naturally!). Also, stage production music is licensed by MTI, an entirely separate entity (with no blanket camp licensing deal in place!).]
November 17, 2023
Bankruptcy
The “Omnibus Order” - “Mutually Beneficial ‘Kitchen-sinking’” | Part Two
Originally posted on 05/06/20, content updated on 11/16/23. Read Part One here » If I’ve learned anything over my many years of legal practice, it’s not to under-estimate how much can be achieved in a single Final Order. Having had my eyes opened to the “mutually beneficial kitchen-sinking” concept, I have taken the challenge personally to test the limits of this time-saving, client-cost-saving practice. For instance, in conjunction with a negotiated global settlement on behalf of a multi-million dollar judgment-creditor involving third-party rights in real property in which the judgment-debtor held an interest (and a host of other pending and potential forthcoming creditor’s rights enforcement proceedings), counsel and unrepresented parties managed in a single order to take a pending Circuit Court case from and through a threshold pre-trial stage of amending the Complaint to allow and add an arguably necessary party (and resolving service issues consequent thereto) all the way to a final order of dismissal. With the cooperation of all but the judgment-debtor, counsel for all parties were able to consolidate into a single comprehensive order presented at a short and simple Motions Day docket presentation for the Court, a multi-party settlement of a pending post-judgment creditor’s rights complaint to sell the judgment-debtor’s real property asset. In the omnibus consent order, agreed to and jointly presented by all but the judgment-debtor, the parties managed to cobble together in a manner ultimately found acceptable to the Court, all of the following: (i) allowing intervention and adding parties; (ii) defaulting the judgment-debtor; (iii) amending claims; (iv) accepting/waiving formal service; (v) stipulating to facts; (vi) stipulating to legal and factual findings and conclusions of law (and doing so in the alternative); (vii) making asset value determinations; (viii) allowing and deeming a private sale had and held with credits/setoffs determined and applied (and done in a manner so as to moot the need for otherwise required proceedings); (ix) entering judgment; and (x) awarding fee simple title transferred to the judgment-creditor. There was no need for a sale, public or private; no commissioners needed to be appointed; no valuation hearings needed to be held. In this manner, the time and expense of proceeds allocation arguments or accountings were all avoided along with the potentially substantial expert and legal fees attendant to such procedural requirements. Rather than presume some or all of the foregoing would be necessary hoops through which the parties were required to jump, even if consensually, counsel cooperatively approached the global resolution with a collective eye towards minimizing time and expense for all involved while assuring that procedural corners were cut in such a way that no rights were prejudiced. Faced with having to choose form or substance, sometimes “all of the above” works best!
November 16, 2023
Estates and Trusts
Discretionary Trust Distributions – When “Because I said so!” May Be Legally Sufficient
Not too long prior to Senator Diane Feinstein’s recent passing, her daughter, exercising a durable power of attorney (POA) for the ailing Senator, filed suit seeking to force payments by the trustee of what is described as a very generously endowed trust fund (by the Senator’s late billionaire husband) reported to include provisions to cover expenses related to the Senator’s health and welfare. So many directions to take this one! This single-sentence summary presents so many potentially valuable legal nuggets to mine! . . . from “What’s a durable POA?” to “What possible good-faith basis could the trustee have for refusing to pay/reimburse for medical/healthcare expenses with funds entrusted to his/her oversight for this very purpose?” I’ll leave the durability question to Siri and Google, noting that with the adoption in states such as Virginia of what is known as the Uniform Power of Attorney Act (or “UPOAA”), powers of attorney are now presumptively durable unless expressly indicated otherwise in the document itself. Before moving on, I’ll also add that a POA need not require the incapacity of its principal/maker to empower the agent/attorney-in-fact to act on the principal’s behalf. Many people mistakenly presume that a POA is intended only to take effect upon the incapacity or incapability of the principal to act on one’s own behalf. POAs can be immediately effective or “spring” into effect if and only when specifically defined events occur, which define the circumstances when the agent’s authority springs to life on behalf of the principal. Without conducting any sort of formal study on the subject, I am confident when I say that springing POAs are by far the exception to the norm. For now, at least, I address myself to the meatier issues stemming from the late Senator’s trustee’s alleged breach of fiduciary duties and general malfeasance. Asked for my opinion about this “obviously-in-the-wrong” trustee after news of the legal action broke (because no one would go to the trouble of filing suit if the allegations weren’t true, right!), I instinctively provided my standard go-to, why-everyone-hates-lawyers response: “It depends!” With little more than the headline as fodder for a good cocktail party debate, any substantial opinion must necessarily depend on so many variables that any other conclusion about the merits of such a case should be presumed fiction (with similar presumptions regarding anyone who would be willing to draw any definitive conclusions about the impropriety of the trustee’s actions, motives, etc. on such scant information). For starters, the outcome of any such case and claim(s) totally depends on the precise language of the trust document governing the specific situation and the scope and extent of the authority such language extends to the trustee. Because the “correct answer” is so driven by the fact-specific trust language, it is truly pointless to speculate on whether the trustee should or should not have paid the particular expenses in the Feinstein situation. It is also precisely why two or more seemingly identical cases can produce seemingly equally contrary results. It is not necessarily true that one judge or jury gets it exactly right while another gets it completely wrong. Nearly identical facts can produce widely disparate legally correct results for a myriad of reasons. [For a separate case study on this issue, check out my co-authored piece on two seemingly identical cases resolving disputed beneficiary designations in the context of divorce-related life insurance obligations: “Same facts . . . opposite results!”] All that having been said, it is not uncommon for such trusts to build in not only a certain level of discretion for the trustee to decide when it might be appropriate to pay and when a particular expense might be unreasonably “over the top” or simply unnecessary. With such built-in discretion, the trustee has effectively been entrusted by the maker of the trust to act in a manner as to reach the closest equivalent to what the maker himself or herself might have decided. Under these circumstances, the trustee is essentially in the right simply because they said so. A court will generally not seek to impose its discretion over that of the individual the now deceased trust maker trusted in the first instance to make what the trustee determines to be the best decision. With this outcome in mind, I commonly encounter provisions bestowing on trustees the ability, or even the requirement, that before releasing any funds from the trust for expenses seemingly word-for-word covered by the trust, the trustee consider and/or “take into account” other resources available to the beneficiary. In this way, the trustee is forced to exercise fiduciary responsibility not only to the current trust beneficiary but also to those who would stand to benefit from the trust after the current beneficiary has passed. Then again, it might very well be that the scope of such authority is less than clearly defined in the trust document or that a trustee with an axe to grind and/or a personal agenda contrary to that of the beneficiary (perhaps favoring future beneficiaries over the current beneficiary, for instance) is, indeed, acting in a manner inconsistent with the trustor’s original intent. In either case, a court order might be needed to provide appropriate “aid and direction” to the trustee or forcing the trustee to act in a manner not otherwise abusing the discretion afforded to the trustee. One simply cannot presume to conclude as much from a news report, nor should one draw conclusions regarding either the trustee or the one bringing such an action against a trustee without knowing all the relevant facts – or at least substantially more of them than might be reportable in a 60-second, news soundbite. In one rather extreme example, I encountered an example recently where a trustee was empowered to provide for the health and welfare of the beneficiary, but only out of trust income (no principal) and if and only if the beneficiary passed a monthly drug test, the cost of which could be paid out of the trust income, but consequently serve to reduce the amount to be paid to the beneficiary. Whether to bring and/or how to defend such an action requires appropriate legal experience, understanding, and, consequently, investigation and analysis of as much relevant information as can be gleaned both from what might be readily available and that which might take some digging to uncover. In my experience, whether one or more valid claims exist in such situations requires significant investigative and analytical time and should not be presumed either a simple or inexpensive process nor one which is likely to lead to an unimpeachable, singular conclusion. I have observed, advised, and/or been involved to varying degrees in numerous such disputes representing various perspectives with differing agendas (consider, for instance, how a second or third-generation, non-profit charitable organization set up as a contingent beneficiary might view as a wasteful fiduciary breach of duty any payouts by a trustee to current beneficiaries with substantial independent wealth and the means to pay their own expenses). I would welcome the opportunity to evaluate the possibility of assisting should you find yourself on one or the other side of such a situation (or perhaps as a drafting attorney seeking to minimize the chances of such a dispute down the road).
November 13, 2023
Litigation
Same Material Facts . . . Opposite Results?
The Western District of Virginia's Hartford Life v. Herring case outcome doesn’t track with the Virginia Supreme Court’s Wood v. Martin decision . . . or does it? In a recent decision by the Roanoke Division of the United States District Court for the Western District of Virginia, Hartford Life and Accident Insurance Co. v. Herring, the parties disputed the rightful recipient of insurance policy proceeds but were at least able to agree that the separation and property settlement agreement at issue was governed by North Carolina law. In seemingly all material respects, the facts of the Herring case mirrored those of the Virginia Supreme Court’s 2020 decision in Wood v. Martin. Yet, with the Court’s application of North Carolina law, the outcome of the case is in direct conflict with the Wood v. Martin results. Or is it? In Wood v. Martin, the Court held that by operation of Virginia law, Ms. Martin, as the ex-wife, was the rightful 50% beneficiary of her ex-husband’s life insurance policy. The ex-husband’s beneficiary re-designation days before taking his own life, by which he removed her from the policy, was in direct conflict with his contractual and consensually court-ordered obligation to her. The Court agreed with Ms. Martin that under Virginia law, the terms of the divorced couple’s agreement (as incorporated into their consensual divorce decree) requiring that he designate her as the life insurance policy beneficiary effected a written assignment of his contractual right with the life insurance company to change his beneficiary designation, and, consequently, he remained bound to maintain Ms. Martin as the 50% beneficiary of the policy. In Hartford Life v. Herring, the Western District applied North Carolina law to strikingly similar facts to reach the opposite result. The Roanoke federal court faced the situation in Herring where a divorced couple’s post-nuptial agreement had stated that the ex-husband was to retain ownership of his life insurance policy, free and clear from any claim by his ex-wife, presumably bargained for to afford him carte blanche to designate anyone he wanted as his policy beneficiary. When the ex-husband died a few years later, it was discovered that he had never removed his ex-wife as the primary beneficiary of the policy. The Western District acknowledged that under North Carolina law, the failure of a spouse to change the beneficiary ordinarily indicates that he or she did not intend to effect such a change. The Court found that the separation agreement did not sufficiently clearly express the policy owner’s intention to alter beneficiary status (notwithstanding the language about the policy being consensually free and clear from any claim of ownership by his ex) and, therefore, did not constitute an assignment of such interest. Consequently, the Court refused to “blue pencil” the policy’s beneficiary designation to match the stated intentions of the divorced couple’s post-nuptial agreement. With directly opposing outcomes, in such strikingly similar cases, one might simply presume the results were dictated by differing state assignment laws. On closer inspection, one or more other factors might have led to such seemingly contrary findings and conclusions. One possibility is that, perhaps, both courts simply applied an “ends justifies the means” approach to decision-making to fashion a remedy and result favoring an otherwise aggrieved ex-spouse. While attractive at first, with both cases resulting in arguably otherwise aggrieved ex-spouses awarded the life insurance proceeds, this justification seems unlikely. From all outward appearances at least, the Herring policy designee stood to receive an apparent windfall contrary to the outcome for which she’d bargained in the couple’s post-nuptial agreement. Instead, perhaps the facts of the cases differ materially in a non-obvious way? Perhaps the results were driven by specific language in each of the agreements, highlighting more than an innocuous distinction. As it turns out, ownership of a policy is not synonymous with the right to dictate who receives the proceeds thereof. It is true that legally speaking, one with ownership of a policy generally maintains the right to designate beneficiaries of that policy. The Woods v. Martin court recognized an exception to this general rule when one contractually obligates oneself to maintain a particular designee. The Hartford Life v. Herring court was not asked to consider the same contractual obligation, but rather, the apparently unequivocal waiver by the would-be designee to claim an ownership interest in the policy. Considered from these differing perspectives, ownership of the policies in each case went unchallenged, whereas the obligation to designate a particular someone in the former case contrasted materially from the unfettered right of the owner in the latter case to designate anyone he wanted. Then again, perhaps the differing outcomes can be explained factually but less legalistically. After all, simply stated, in the former case, Ms. Martin was awarded with what her deceased former husband had contractually promised to do for her. In the latter situation in Herring, the court’s decision let stand the decedent’s beneficiary designation, which, despite having negotiated for himself the exclusive right to designate anyone he wanted as his beneficiary -- which right he then could have exercised any time he wanted! -- for reasons he apparently took to his grave, he never did. Perhaps it was merely an oversight by the deceased policy owner, or perhaps it was a conscious decision on his part. We’ll clearly never know. We do know, however, that merely because he could change the policy beneficiary did not legally dictate that he must do so. Without language in the post-nuptial agreement expressly directing him to take particular action regarding the beneficiary designation, as in Woods v. Martin, perhaps this is a sufficiently material factual distinction justifying an opposite result without regard to the law of assignments in either North Carolina or Virginia. Seen in this light, the Woods v. Martin and Hartford Life v. Herring decisions make perfect sense! So, when does it make sense that the same material facts lead to opposite results? Certainly, one option is that the law differs from state to state. In this situation, however, another option appears to be that no matter how strikingly similar the facts of the two cases, they differ materially in more ways than one – sufficiently so much as to dictate opposite results and, consequently, leaving unresolved the issue as to the extent to which the law of assignments in this context actually differs between the two states. Thoughts?
November 9, 2023
Litigation
The “Omnibus Order” - “Mutually Beneficial ‘Kitchen-sinking’” | Part One
Originally posted on 04/23/20, content updated on 11/07/23 “MBKS” or Mutually beneficial “kitchen-sinking.” It’s a thing. . . . No, seriously, it is totally a thing! Well, it should be! I credit opposing counsel in a substantial life insurance claim litigation for having suggested that in a single order we might have the court nonsuit (voluntarily dismiss) some claims; nonsuit some arguably interested parties; allow and approve both interpleading of funds and partial payouts of non-interpleaded funds; conditionally dismiss the interpleading party; and generally streamline the pending case to the core factual/legal issue(s)/matters about which the remaining principal parties would be left to dispute. “Not possible,” I was confident. “No way a judge signs off on all that in a single order.” I was willing to try it, of course,–this “omnibus order” approach, as I had dubbed it, where we would toss in everything but the “kitchen sink”–in hopes of achieving all of the above in inconceivably record time. “Doubting Thomas” that I am, however, I had little expectation of this actually working and was confident it would only end up serving to add costs and delay unnecessarily to all of the procedural and substantive agreements we’d negotiated. I waited for the inevitable call to come from the law clerk informing counsel that there were certain rules and procedures to be followed for these sorts of things, and asking (but not really asking) if I would we be so kind as to file the appropriate multitude of motions to be heard at the proper times on succeeding Fridays, etc. . . . etc. But, as you’ve no doubt already discerned, the call never came. The omnibus order was entered, and, as if having just scored an unexpected “Fast Pass” at Disneyworld, we shot to the front of the litigation roller-coaster line short-circuiting much of the anticipated pre-trial delays. Attorneys, litigators in particular, are typically paid really well to know the law (or at least how to figure it out when and as necessary in a given situation!), and compensated even better if able to apply it effectively to their clients’ advantage. Mutually beneficial “kitchen-sinking” is about saving clients’ time and money. Adversaries willing to resolve multiple substantive and procedural matters in a single omnibus order well-serve their clients and, concomitantly, the legal system (by helping keep dockets unclogged and access unfettered) and themselves, “…to the extent one’s reputation among both future adversaries and potential future clients is immeasurably impacted by one’s own choices.” The best litigators know and apply the law to their clients’ substantive advantage with a time and cost efficiency that avoids results where “only the lawyers win,” because these lawyers understand that a pyrrhic victory is no victory at all. One would be wise to remember that, to one’s client, “winning at all costs”–whether or not one’s client appreciates it at the time!–is typically tantamount to a loss. #MBKS!
November 7, 2023
The Practice of Law
Jury Duty (Part Three): From Voir Dire to Deliberations to . . .
Originally posted on 03/05/20, content updated on 11/07/23 “Ladies and Gentlemen of the jury, please stand and raise your right hand to be sworn. Do you solemnly swear to be fair and impartial to uphold the Constitution and laws of The Commonwealth of Virginia to the best of your ability?” And with a resounding chorus of “I do’s,” we — the chosen few! – are asked to be seated and prepare for what is to be a several-day journey through dramatic opening statements, myriad facts and witnesses, emphatic legal “Objections!” (sustained and overruled), rousing closing arguments, and methodical instructions from the judge, before heading off to what was to become our own special home-away-from-home for the next several days for our “deliberations” as we were to decide the fate of the accused – alleged to have embezzled an insane amount of money from a former employer’s operating account (apparently not as uncommon as you might think! Note to self – review A/P payment approval process!). I had been called to serve – my first time ever! – called for jury duty in Fairfax County Circuit Court. Unlike many of those I’d joined in the jury assembly room that fateful Monday morning, I was excited and hopeful of being selected to serve on a jury. Seeing and experiencing first-hand a juror’s perspective of what it is I do for a living in the courtroom as a trial attorney from the other side of counsel’s table and behind the rostrum is something very few litigators ever get a chance to experience. (I’ve only met two over my career that have shared the experience.) There are any number of big screen and small screen representations of what goes on behind closed doors but, as I’ve previously noted and explained, it is a relative rarity for a litigator to experience the actual inner workings of the jury room. So this was, indeed, an exciting day! “Voir dire,” the part of the pre-trial process where the judge and the attorneys ask potential jurors a bunch of seemingly random unrelated questions designed to help the attorneys decide who the best jurors will be (or at least who they most definitely don’t want on the jury, if they can help it) was surprisingly and disappointingly uneventful. The only real surprise was that neither side felt compelled to dismiss or “strike” me as a juror (each apparently believing that having a civil litigator on the panel would be somehow beneficial to their cause). If you’ve seen the CBS TV show “Bull” for instance, you know there is a whole science (art?) to this evaluative process. There is a large “cottage industry” of jury consultants out there willing to take desperate people’s money to avoid conviction. This, however, was definitely not one of those cases. Opening statements were matter-of-factual and methodical (classic “tell ‘em what your gonna tell ‘em” lead-in’s). Witnesses were relatively “vanilla” providing, mostly at least, “just the facts, ma’am!” There was a big flourish of an “OBJECTION!” at one point after some seemingly irrelevant but salacious testimony, but a quick “Sustained!” from the judge mooted the need for the Commonwealth’s Attorney (the state’s prosecutor) to respond, and she simply continued as if nothing had even happened. Witness after witness, mundane direct exams followed by somewhat more spirited cross-examinations, frequent breaks and lunches (many more than I generally take in a week!), judicial admonitions not to talk to anybody about the case, all culminating in relatively flamboyant, definitely more emotional, closing arguments including the defense attorney’s impassioned insistence that the Commonwealth had failed to prove its case beyond a reasonable doubt and, somewhat surprisingly actually, of his client’s having done nothing wrong, etc. before the judge turned to us to read carefully crafted instructions and sent us out with reminders of our oaths and duty to our fellow citizens and community. We pick a foreman (or forewoman, in this case), take a single unanimous vote; watch the “guilty” verdict get read in open court, watch further as the defendant – clearly shocked by the result – get cuffed and lead by Sheriff’s Deputies (a couple of Fairfax County’s finest!) through a special side door in the courtroom (leading to the special prisoner elevator and back hallway system in the courthouse most people never get to see; receive an appreciative “thank you” from the trial judge; collect all our belongings, shake hands, exchange pleasantries (and a couple business cards!) with fellow jurors, and unceremoniously head back to our respective lives. At least that’s what I had hoped would be my first juror experience. If you remember back to Jury Duty 2, I left off waiting for the Sheriff’s Deputy to come back to bring my group of jurors to our assigned courtroom with me looking forward in anxious and excited anticipation to my first “voir dire” as a prospective juror. In fact, when the Deputy eventually did return, after we were forced to sit and wait in the jury assembly room for nearly another hour or so, he thanked us for our service and summarily dismissed us. That was it. We were done. There would be nothing further required of us. Thanks for playing; there will be no parting gifts, and you won’t be getting a copy of the “home game” (a la television game shows of the ’80s). The Deputy couldn’t tell us how “our” case had been resolved or even the type of case to which we had been assigned – either because he truly didn’t know or simply knew better than to engage us down that path of inquiry. Regardless, there would be no voir dire, not for me . . . not that day. There would be no empaneling, no opening nor closing, no objecting nor sustaining, no deliberating nor convicting. Jurisdictions handle jury service differently with some having continuing obligations in the event one is dismissed as I was that day — not Fairfax County, however. In Fairfax County one fulfills one’s jury duty service by timely presenting at the courthouse and making oneself available to serve just as equally as those fortunate enough to be selected and empaneled on a jury. If you’ve been fortunate enough to have served on a jury, I thank and envy you for your service. You help the legal system function, and it is better because of you. Drop me a line . . . I’d love to hear your story. For me, I fear, it is like the elusive hole-in-one I may never achieve.
November 7, 2023
The Practice of Law
Jury Duty | Voir Dire: “To tell the truth?” - Part Two
Originally posted on 02/13/20, content updated on 11/02/23 Courtroom assigned! One after another, Sheriff’s Deputies come to call out a list of potential jurors to report to various courtrooms. I sit, comparing myself to the Schoolhouse Rock “Bill,” sitting on Capitol Hill, just waiting for the possibility of getting called, only to be “stuck in committee” for who knows how long. For now, it appears I am headed — along with 29 of my community “peers” — to a courtroom to face “voir dire,” which derives, as the Chief Judge so ably explained during the informative orientation video, from an old French term meaning “to tell the truth” – my French is rusty enough that I decide not to challenge the judge on this one! “Wait right here, and I’ll be back to take you to the courtroom,” the Deputy tells us after assuring we are all present and accounted for. One step closer, and my thoughts return to how unlikely it is that, as a trial lawyer myself, I will survive voir dire to make it to one of the comfy seats in the jury box. Telling the truth won’t be an issue, obviously. The threshold question is whether the lawyers on the case like my answers. In the video, Judge White cautioned that one or more of us might be subject to an attorney’s “strike” and not to take it personally or to take offense if that happens. Yeah, right! How else to interpret being stricken other than: “Juror X, you are exactly the kind of person we don’t want deciding the fate of our client. Buh-bye!” Still, we all have our biases, whether we recognize them or not. As trial attorneys, we are called upon to engineer trial scenarios most favorable for our client, including evaluating and striving for the most potentially favorably pre-disposed jury possible – or, in any event, one that is the least unfavorably pre-disposed! But, this day, I am not the one doing the engineering. This day, my own predispositions are subject to being exposed – or worse . . . presumed! . . . guessed at by those who will be forced to consider, as they must with each potential juror, whether having me, a trial attorney, on their jury panel is a pro or a con for their client’s case. When the attorneys “rest” their case and the jury leaves to deliberate the outcome, will my presence in the room help or hurt their chances of success? Essentially, the attorneys on the case must decide whether my professional experience is more or less likely to be a positive factor for them. Will I be open-minded and able to decide the case based only on the evidence presented? Will I influence others on the jury to consider things that perhaps only I observed during the trial because of my own trial experience (evidentiary shortcomings?) or be called upon to explain what something meant (a legal objection sustained or an instruction from the judge), or perhaps even resolve legal questions ordinarily brought to the judge’s attention? And, ultimately, will it be better or worse for their client if I am in the jury room with the possibility of any or all of the above. Whoa! Pump the brakes, big guy! Reality check. We’re still sitting in the jury assembly room, awaiting the Deputy’s return to take us to the courtroom. I wonder what kind of case we’ll be assigned . . . civil or criminal? Will it be an attorney I know? Here comes the Deputy now . . . . Juror 996642 ready for voir dire!
November 2, 2023
The Practice of Law
Jury Duty – A Litigator’s Dream? Part One
Originally posted on 01/30/20, content updated on 10/31/23 Juror 996642 reporting for duty! There I was, responding to my first ever “SUMMONS FOR JURY DUTY.” I’d heard several stories over the years from legal colleagues and friends summoned, voir dire’d, and a couple who actually served on a jury. Not me. Decades of eligibility, but this was my virgin run! Perhaps I filled out the form differently this time? Had I been previously claiming an exemption? Honestly, I’ve no recollection of past years but have a vague recollection of making a conscious decision not to claim an exemption in hopes of serving. Voila! As members of the Bar, especially those of us who spend a substantial time at the courthouse, we appreciate all too well the substantial amount of effort and resources that are required to provide access to justice. Here in Virginia, and Fairfax County, in particular, we are fortunate to have the resources we do (though we could always do more with more!) and an unyielding commitment to timely resolution of cases. To be sure, there will always be opportunities for improvement in the judicial system, many of which we as members of the legal community are uniquely empowered to pursue. Being willing to answer the call to serve and to accept the responsibility of possibly being asked to help decide the guilt/innocence or civil liability of a “peer” is an opportunity too easy not to partake. Each state handles jury duty obligations differently. In fact, with both a federal and state court claiming jurisdiction over you no matter where you live, eligible jurors are at all times subject to multiple selection systems. In Virginia, the selection process differs from county to county. Fairfax County is the largest jurisdiction in the Commonwealth, with the most potential jurors. As a result, one answering the call to serve can anticipate it’s being at least several years before being summoned to serve again. Here in the “land of the free, because of the brave,” where one’s “day in court” comes as a right and privilege for which so many have sacrificed so much, jury duty is really no sacrifice at all. So . . . client obligations, pending deadlines, other work, and family commitments aside . . . along with maybe 100-150 or so fellow Fairfax County residents answering the call, I am Juror 996642 . . . reporting for duty! After the parade is over and all the fanfare and hoopla die down (not!) . . . my I.D. has been verified, and I have made myself comfortable in the assembly room. Polite smiles; quiet as expectations build; we wait. Next time . . . “voir dire.”
October 31, 2023
The Practice of Law
Jury Duty for Lawyers: Are You In or Out?
Jury service is both a civic duty and a privilege. Yet, attorneys rarely serve on juries. To be clear, there is a difference between reporting for duty and actually serving on a jury. For those attorneys who might consider reporting for duty, some question the value of the experience. In the County of Fairfax, Virginia, where I live and practice law, attorneys, along with judges, “first responders,” and some others are among those afforded an exception to jury duty. Every so many years, the County sends out a questionnaire to confirm eligibility to serve. I recently received mine and faced again the question of whether to exercise my right to choose not to serve, i.e., whether to opt in or opt out of jury service. That’s right, jury duty is optional for lawyers! (Please tell me I’m not the only one seeing the irony?!) [For a glimpse into the result of my previous decision to “opt-in” for jury duty.] I certainly don’t begrudge anything to those attorneys that choose to exercise their legal right to “opt out” of jury duty. After all, why expend all the effort when not being allowed to serve on a jury is practically a foregone conclusion – especially for a litigation attorney such as myself (and many of my colleagues with whom I’ve debated the issue)? I recognize that it is highly likely I will have wasted a great deal of time and effort only to be sent away without having been part of the deliberative process and/or helping decide a winner and loser at trial. Be that as it may, for me, at least, opting in is my only option. Why? As I stated at the outset, jury service is both a civic duty and a privilege. Expectation of a “strike?” For at least one of the lawyers trying a case, allowing an attorney on the jury is likely to be a bad thing since a lawyer-juror may be more likely to recognize weaknesses in the evidence presentation, including evidentiary gaps leaving material questions unanswered, and less likely, perhaps, to be persuaded by legal rhetoric. For these reasons and countless others, I suppose, it is very likely that a lawyer reporting for jury duty will be stricken with one of the “strikes” afforded to each of the parties as part of the jury selection process and, consequently, equally unlikely that the lawyer would actually end up serving on a jury. Our system would fall apart completely if everyone measured and determined their level of input by the relative expected impact on the overall process. Just as a single vote is unlikely to tip the scales of an election either way, the potential significance of one’s individual involvement in the judicial process cannot be overstated. I simply refuse to accept that the measure by which we ought to decide in the first instance whether to participate in the process at all is the extent to which we believe that our individual input is likely to be outcome-determinative. Rather, our willingness to serve, to make ourselves available to serve, as impartial decision-makers willing to share our time for others ought to equate to the level we would hope others might share of themselves should we ever find ourselves in need of a jury of our peers. Impacting the process? Whether one wants to accept responsibility for the consequences of one’s inaction, one’s non-involvement in the jury selection process impacts the end results. If the presence of an attorney is likely to cause one or the other party to exercise one of their limited strikes to remove the attorney from the jury, the absence of that attorney must necessarily mean that a strike remains available to be used on someone else. In other words, the ultimate makeup of the jury is skewed by the absence of an attorney who could have reported for duty, even if only to be struck. By not participating, therefore, an attorney has, unintentionally or otherwise, impacted both the process and the results merely by one’s absence. Jury of one’s peers? One accused of a felony is entitled to have the matter heard and decided by a “jury of one’s peers.” In a jurisdiction such as Fairfax, where lawyers abound, a jury pool with no lawyers would reflect less than accurately the “peer group” from which one’s jury is to be drawn. Consider, for instance, a lawyer-defendant on trial for a murder she didn’t commit. What ought the makeup of a jury pool of her “peers” properly include, if not a lawyer or two? My involvement would not assure an attorney on the jury for this hypothetically wrongly accused lawyer-defendant, but participating to the extent I am able amounts to playing my part and doing at least what is within my power to do. What if . . .? Maybe I get contacted and told to report to the courthouse. Maybe I get assigned to a jury pool, and report to a courtroom where lawyers preparing to try a case will ask a bunch of questions and decide whether having me sit on their jury is a good or bad idea. Maybe I survive all the strikes, get seated on a jury panel, and, after hearing all of the evidence, find myself in a jury room with the rest of that same jury panel deciding the fate of an accused criminal or the potential civil liability of parties to a civil case. Maybe I get elected foreman because those non-lawyers on the jury believe the attorney among them knows best what to do and how best to do it. Maybe we convict; maybe we acquit … or maybe we decide that one neighbor’s fence should be moved a foot to the left because it was improperly installed on the next-door neighbor’s side of the property line. Maybe, as a litigator myself, it proves to be an invaluable learning experience from which I am able to hone my craft. Maybe I gain a better appreciation for how all those potential jurors feel the next time I am the one selecting a jury. Maybe I make it as far as the first round of strikes and am sent home. I can live with that! I acknowledge the unlikelihood of my getting impaneled to help decide a case. I accept at the outset that most attorneys selecting potential jurors for their case will not see the potential value in having me in their jury box. I understand that it would be wishful thinking to believe I might find myself as the difference maker persuading fellow jurors to consider evidence in a different light, helping tip the balance in a case with life-altering consequences for the parties. For my money, opting out of jury duty is akin to not buying a lottery ticket – you can’t win if you don’t play. The PowerBall jackpot recently surpassed $1.5 Billion without a winner. My chances of winning were as infinitesimal as the next guy’s, . . . but I bought a ticket anyway. I’ll be sure to tell you all about it if my jury lottery number gets called. (P.S. I’m not making the same promise if my PowerBall number comes up!)
October 19, 2023
Estates and Trusts
Handwritten Wills and the Couch Cushions that Hide Them
No doubt, the basic scenario plays out every day across America. An elder loved one passes, and an adult child or children are left to deal with an estate and no plan in place — or at least no apparent plan. What to do with mom’s comfy chair? How much is that old couch worth? Should we just donate everything to charity? Who decides? The oldest? The one living closest? Do we all get a vote? Before anything gets decided about the couch (or any other furniture, for that matter), I suggest everyone take a breath and consider the recent case of Aretha Franklin‘s four kids… and definitely don’t rush to divvy up everything and especially do not just get rid of the old couch! Nearly five years after the Queen of Soul passed and, no doubt, many tens (more likely hundreds) of thousands in legal fees later, the fate of Aretha Franklin’s estate was decided by a Michigan jury, which determined that a four-page “holographic“ (i.e., handwritten) document in a notebook found stuffed under Aretha‘s couch cushion was her intended last Will. No matter that the four kids had already long since mutually consented and arranged to have an agreeable cousin serve as a third-party neutral to administer the estate. No matter that the lack of a will had meant all four would share everything equally and that they’d come to terms with that. No matter that one of the four separate potential final will documents was several times longer, more detailed, found in a locked cabinet, and notarized! The jury’s findings result in Clarence Franklin getting cut out completely and brother Kecalf, alone, receiving Ms. Franklin’s $1.1 million home and most of her “personality” (i.e., her physical stuff-including jewelry, furs, and numerous luxury cars). Impossible to know for sure what Aretha had intended. In fact, according to a New York Times report, the trial judge overseeing the trial has ruled that portions of one or more of the earlier signed documents might still end up being incorporated into what the jury determined to be the final document. (Note: This can happen in certain circumstances when one deals more completely / thoroughly with the disposition of all that one owns in one document before creating another, which inexplicably makes no specific reference to replacing or substituting for the former document). So, despite having endured nearly five years of legal wrangling and a jury trial publicly airing the family’s “dirty laundry” along with matters preferably kept private, the Franklin kids may yet be forced to endure additional delays as the lawyers face-off on potentially unresolved issues, and Clarence and the other siblings now receiving substantially less than the presumed 25%, are now forced to consider their potential appellate options, as well. Why leave such unnecessary heartache to your loved ones after you’re gone? Consult a legal professional, and have it done correctly—and the way you want it—the first time. And if you have recently lost a loved one – especially if you’ve been led to believe they had an estate plan in place (and doubly especially if the “plan” they told you about appears to differ substantially from the plan the decedent actually left behind (or the lack of a plan altogether), I would urge you again to consider the plight of the Franklins and rethink that couch donation . . . at least until someone’s had a chance to lift the cushions and run their hands through the frame. (Epilogue: True, not-totally-unrelated, anecdote . . . I discovered a $20 bill and a pair of Ray-Ban® sunglasses (sold on the spot for $75) in the back of an abandoned couch acquired during a brief stint co-owning/operating a used furniture/carpet going concern more than 30 years ago. I didn’t have to become an estate and trust litigator to appreciate the potential treasure trove those old cushions might unlock! “What’s a ‘treasure trove?’” you ask . . . and “How does one determine ownership of a treasure trove when discovered?” That’s a whole other topic for another day. For now, happy couch-surfing!)
September 14, 2023
Litigation
Missed a Deadline?
Have you ever received a lawsuit or claim with a time-sensitive deadline? While it may be possible to receive an extension from the court or the opposing party, one should not count on such leniency. In some instances, particularly appeals, the filing deadline(s) are mandatory and jurisdictional. By way of example, the Supreme Court of Virginia recently expedited granting an Offit Kurman team’s motion to dismiss an interlocutory petition for review as untimely. The terse and expedited ruling by the Court upholding a Circuit Court decision to deny a preliminary injunction serves as a cautionary tale for those seeking appellate relief in Virginia as the Court refused the petitioner’s attempt to excuse a one-day late filing.[1] If you or your organization are served with a civil lawsuit or are forced to consider appealing an adverse decision, missing a filing deadline might prove to be outcome determinative. Which rules apply and how much time one has to act in a given situation may not be readily apparent. Consulting with a trusted attorney in your area might prove to be the difference between winning and losing. While outcomes cannot be guaranteed and past performance cannot assure future success, Offit Kurman litigators Thomas W. Repczynski | Offit Kurman and Anders Sleight | Offit Kurman are available to evaluate your specific c situation.[2] _______________________________________________________________________ [1] Case results do not guarantee or predict a similar result in any other case. [2] These materials have been prepared for informational purposes only and are not legal advice. Reviewing this post or contacting Offit Kurman in response does not create an attorney-client relationship. Case results depend upon a variety of factors unique to each case, including the specific factual and legal circumstances of each case. This post may constitute ADVERTISING MATERIAL.
August 17, 2023
Estates and Trusts
What’s New in Estate Planning? Notable Local Law Changes
D.C. Adopts the Uniform Electronic Wills Act: Electronic Wills in D.C. – it’s the law! . . but should it be? As of March 10, 2023, the “Uniform Electronic Wills Amendment Act of 2022” (Law 24-296) became effective in the District of Columbia. With it, D.C.’s pandemic-inspired, emergency legislation allowing virtual will signings was formally replaced with a new Chapter 9 of Title 18, known officially as the “Uniform Electronic Wills Act” (D.C. Code § 18-901, et seq.). With its adoption of the Act and making permanent the previously interim measure, D.C. joins only six other states and the U.S. Virgin Islands[1] to have adopted the Act and made the leap legalizing will signing without ever putting pen to paper, or for that matter, without ever involving a pen or paper.[2]. In the District, to be legally enforceable, one’s will no longer needs to have been physically signed or reduced to paper. With the appropriate software and/or application, one can now finalize a will with a few keystrokes. Of course, there are some parameters, and one should not presume to have met all the criteria merely by tapping out a document on one’s laptop without consulting the Act . . . and a good lawyer! Nevertheless, the new law certainly makes it easier to make a testamentary disposition of one’s assets, i.e., direct who gets what when you die. I am left questioning the tradeoff; however, with the Pandora’s box of fraud schemes, this development undoubtedly unleashes. You can now create and sign your Will electronically in the District of Columbia . . . but should you? There has been no shortage of debate over the years as to steps minimally appropriate to make a legally enforceable will. While varying across jurisdictions and with only limited exceptions, certain minimum requirements regarding one’s “soundness of mind,” witnesses, notarization, signatures and related representations, for instance (see, e.g., DC Code § 18-102, et seq. and Va. Code § 64.2-403, et seq.), have universally been intended to assure both genuineness of a document and accuracy of one’s testamentary intentions on a document which only becomes legally operative after the testator is dead. With the advent and development of electronic communications (email, facsimile, text messaging, and the like) and, in recent years, the ever-improving ability to sign (or affix an equally individualized electronic mark), send, and store one’s electronically signed documents increasingly securely, the legal acceptability and enforceability of electronic signatures have become unexceptionally commonplace. Moreover, with the recent lessons of a global pandemic, including a new-found appreciation for conducting one’s affairs from a distance, the ability to “get one’s affairs in order” remotely became, for many, a life-preserving necessity. Time may reveal better the extent to which the inability to e-sign estate planning documents “forced” COVID-19 victims and countless others to die intestate, an argument I’ve heard posited in favor of easing and expediting signature requirements to this extent. In the District, emergency legislation made it possible, on a limited temporary basis, to execute wills without all of the “whistles and bells” otherwise required under the law. The primary argument for maintaining the physical signature requirement for wills, along with the physical presence of witnesses, generally centers on the significance of the finality of making testamentary disposition of one’s assets and not being around to assure that one’s intentions are carried out as we had intended. But with the general acceptance nowadays of e-signing in the context of so many acceptable alternatives to disposing of one’s assets without either invoking a will (trusts and contractual-based, third-party provider agreements such as life insurance and ERISA-qualified retirement plans, for instance) and/or the probate process pursuant to which one’s Will’s directions are administered and overseen, why should will-signing retain such an exceptionally high bar?. . or so the argument goes! With the advent of AI-generated, at times seemingly indifferentiable virtual “reality,” do we really need to ask “why?” Perhaps there will come a time when one’s “John Hancock” indelibly inscribed, notarially certified, and appropriately witnessed will no longer have any value at all. Perhaps. We’re not there yet, however, . . . at least not everywhere. Neither Virginia nor Maryland has yet to succumb to this latest modern trend towards allowing and trusting electronically signed will documents . . . although, it seems only fair to acknowledge in this regard that Virginia, for instance, has allowed exceptions to its strict signing/witnessing requirements in certain limited circumstances. [For more on “de facto wills” and the “Harmless Error Rule” in the Commonwealth, see my prior discussion regarding Virginia’s modified version of Section 2-503 of the Uniform Probate Code, Va. Code § 64.2-404.] Mind you, I am not suggesting that electronic evidence of a Will (including, for instance, a PDF copy of the purported Will itself) would not, per se, be devoid of probative value. By way of example, not too long ago, I found myself challenging whether an emailed copy of a document purporting to be a Will might itself be deemed a “de facto will” under Section 64.2-404 and the extent to which, if admitted into evidence, the electronic version of the document and the email transmitting it ought to be given weight by the judge when considering the decedent’s intended finality of the document at the time. Perhaps someday Virginia will fall lockstep into line in the march towards what may be an inevitably paperless, impersonal future. Maybe someday, sure, but I would take the “over” if anyone proposes a near-term adoption of such a risky proposition here in the Old Dominion. As of this writing, at least, D.C. stands alone in the “DMV” and with only a handful of other jurisdictions (in the mid- to Pacific West) formally allowing this dangerous practice. Over the years, I have counseled countless clients who have found themselves questioning the bona fides of a suspicious Will document or the circumstances and timing of the document’s creation. With what I perceive as the floodgates now opening, I suspect the next wave of litigation will involve many new variations on the theme requiring us to (dis)prove testamentary intent and whether certain 0’s and 1’s amount to an electronic signature of an improperly formatted, electronic document very loosely resembling what only some might consider a Will. You know where to find me! ___________________________________________________________________ [1] North Dakota and Washington enacted versions of the Act in 2021, and the U.S. Virgin Islands followed suit in 2022. D.C. joins Minnesota, Idaho, and Utah in enacting the Act in 2023, while Texas, Missouri, and New Jersey have introduced, but, as of this writing, have not enacted the Act. (Source: Uniform Law Commission, https://www.uniformlaws.org/committees/community-home?CommunityKey=a0a16f19-97a8-4f86-afc1-b1c0e051fc71, site visited on 8/8/2023) [2] Maryland has not adopted the Act but has adopted its own version of electronic will signing/witnessing. See Estates & Trusts §4-101, et seq. (Source: Maryland General Assembly, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=get§ion=4-101, site visited on 8/29/2023.) There may be other states that have gone this route as well.
August 14, 2023
Litigation
Creative Lawyering – Property Settlement Agreement as Written Assignment (a Supreme update)
A beneficiary’s interest in a life insurance policy is only as protected as the written assignment securing the interest with the policy issuer. In the right circumstances, a Property Settlement Agreement (PSA) – or other similar agreement! – can double as any number of other useful legal documents. I’ve previously written of trial court successes where PSAs have doubled as a real property deed and, in a more recent case, as an “assignment” (serving to transfer an interest in life insurance policy proceeds). Over the pandemic, I left readers hanging by failing to share the appellate outcome on the “assignment” issue. The Virginia Supreme Court took up a case of mine involving a divorcee whose deceased ex-spouse failed to honor a consensually court-ordered life insurance commitment. Essentially, the divorcing husband had promised to maintain life insurance for the benefit of his soon-to-be ex-wife and later reneged by changing the policy beneficiary designation (a not uncommon occurrence, unfortunately) shortly before committing suicide. The trial court had ruled favorably for the surviving ex-spouse (our client) but had done so on questionable legal grounds – relying on a definition of “creditor,” which I had not even argued to the Court (with good reasons, it turns out!). Suffice it to say, the circumstances in the case required a “written assignment” for the proceeds of the life insurance policy to be rightfully owed to the surviving ex-spouse. The assignment requirement stemmed not from the former couple’s divorce documentation but rather from the contractual arrangement with the life insurance company issuing the policy. Additional details of the case aren’t nearly as significant as the rule of law on which the Supreme Court chose to uphold the trial court’s decision and the impact it ought to have on anyone expecting to benefit from the life insurance policy of another. It turns out the Supreme Court agreed that the language of the couple’s PSA satisfied all the requirements of an assignment sufficient to have effected a transfer of the policyholder’s interest in the proceeds of the policy to his ex-spouse. The appellate victory was sweet – not going to lie. Our client’s win, however, proved a cautionary tale for all future would-be policy beneficiaries (not to mention their divorce attorneys, financial planners, and estate planning counsel!) facing similar circumstances. Our client had lucked out inasmuch as her vengeful ex-spouse hadn’t compounded his in-your-face beneficiary re-designation by pledging or otherwise re-assigning the policy to another in exchange for a financial interest of some kind. According to the Supreme Court, had he done so, he would have successfully cut his ex-spouse out of a substantial portion of the financial consideration negotiated for during the parties’ divorce. Because the PSA/assignment document was not provided to and accepted as an assignment by the insurance company (in lieu of the company’s own form assignment document) prior to the policy owner’s death, any subsequent assignment properly documented with the insurance company would have superseded the PSA’s operative language. In essence, the reach of a PSA’s operative assignment impact only extends as far as the parties to the agreement unless and until either the policy issuer becomes a party to the agreement or the policy owner opts to reassign some or all the same interest in the proceeds. The rationale of the Court’s decision might easily be extended beyond the divorce context to anyone with an expectancy in policy proceeds. I’m speaking especially in this context to anyone who might consider extending credit with the promise of repayment to be backed by policy proceeds. Failing to insist on a written assignment on the insurer’s form and confirmation of the insurer’s acceptance of the assignment unnecessarily affords an unscrupulous borrower the ability to leave you completely unprotected. I welcome opportunities to provide guidance prior to leaving oneself or one’s client unnecessarily exposed and/or counsel when looking to extricate from unanticipated consequences after having failed to protect against them beforehand.
July 25, 2023
