The Georgia Supreme Court recently handed down the case of Smith v. Ashford (full text below the break), in which it dealt with a testator's use of a "power of appointment."
What is a power of appointment?
In estate-planning parlance, a power of appointment is used when a benefit is given, together with a right (a "power," as it were) to decide who gets that benefit when the initial beneficiary dies. The possessor of that right has a "power of appointment."
In a common example, parents may leave their wealth in trust to a child, together with an unlimited power of appointment. The child draws benefits pursuant the trust during his lifetime and has the power to decide, in his own will, who will inherit his share of the trust when he dies.
Drafters of trusts governing large estates like to use powers of appointment when they trust the beneficiary (often their child) to decide who most deserves to receive the benefit of the trust years or decades into the future.
In Smith v. Ashford the Supreme Court interpreted a will in which the holder of a power of appointment sought to give the power itself to his wife. Without holding on the question of whether you can inherit a power of appointment itself (you can), the Court said that it didn't matter - the original power of appointment stated that it had to be exercised before its holder died. Since it was not so exercised, the power lapsed.
Under Georgia law, a gift can be made for a specific purpose without the necessity of a trust. OCGA § 44-5-87. However, if it appears that the expressed purpose of the gift cannot be accomplished, then the law imposes a trust over it, in favor of the grantor. Id.
A case announced yesterday by the Court of Appeals addresses this question about the above law: How do we know when it's clear a gift's purpose can't be accomplished? In Choi v. Immanuel Korean United Methodist Church, the Court of Appeals considered whether a trust should not be imposed over a large donation to a church's building fund, when no building had yet been constructed. 2014 Ga. App. LEXIS 218.
HB 683 was signed into law this week by Georgia Governor Nathan Deal. The law allows banks, employers, and other non-lawyers to file answers to summonses of garnishment in any Georgia court, whether or not represented by an attorney. The Georgia legal newspaper of record, the Daily Report, posted a write-up of the law here.
Essentially, the law cuts against the basic notion that practicing in court without an attorney is engaging in the unauthorized practice of law. The reason is that banks and employers are organizations. In practice, they cannot "represent themselves" because they are not people. Paying an employee to represent the institution is essentially like hiring a lawyer without a bar license.
Attorney opinions are mixed on the question of whether this is a good development. On the one hand, responding to a summons of garnishment is fairly routine, and once a bank officer has done it, the procedure varies little in the second and succeeding iterations.
On the other hand, the courts simply are the province of attorneys according to Georgia law. Carving out an exception for garnishment responses makes no sense when there is no exception for other, equally routine legal matters. A strictly libertarian answer to this inconsistency would be to allow anyone, for any reason, to represent a company, lawyer or no. And then we could leave it to lawyers to prove their worth to potential corporate clients.
As this firm practices frequently on behalf of creditors in collections matters, we can say from experience that allowing non-lawyers to practice before courts, at the very least, will increase the rate of error and resultant burden on society in the form of court time and backlogs.
The estate of Georgia singer James Brown, who died in 2006, has been plagued by trouble almost even before the testator's death.
Recently, reported Forbes magazine, owing to court disputes and problems getting income streams from estate assets, the estate faced some $20 million in debt as against $14,000 in cash and other holdings.
The Augusta Chronicle reported, furthermore, in January that an irrevocable trust established by Brown to benefit children's charities has been fleeced at least to the tune of $373,000 by its former trustee, David Cannon.
Presently, Cannon is battling a contempt charge in the South Carolina Supreme Court for failure to pay restitution of this amount, plus attorney fees and penalties.
Working against Cannon in his efforts to argue the fees and fine are excessive is the fact that he owns a $1 million home in Honduras purchased, in large part it would seem, with funds from the Brown trust.
Tanner Pittman, LLC is an estate planning and probate law firm that assists clients in pursuing cases of breach of fiduciary duty against executors and trustees in estates.
92-year-old Kathryn Johnson
Most wills contain standard language requiring executors to pay charitable pledges "whether enforceable or not" out of the estate before any amounts are paid to heirs.
In August of last year, the Rev. Markel Hutchins strained the "enforceable or not" language farther than it was ever intended to go by suing the estate of Kathryn Johnson, the 92-year-old notoriously shot to death by police return-fire in a mistaken drug raid.
Johnson's estate famously won a settlement against the City of Atlanta in the amount of $4.9 million for, among other things, her wrongful death in the raid.
Hutchins is suing for $490,000, which represents a "tithe" from the $4.9 million estate, reports AtLaw. The tithe is owed him, Hutchins has said in pleadings because of his role as "principal strategist and issue manager; public relations expert; crisis intervention and crisis management expert; investigator; project manager; government relations expert; and other duties as requested by the Defendants and those acting in concert with them."
The case is presently before the Georgia Court of Appeals on interlocutory appeal from an early trial court ruling.
In Royal v. Blackwell, handed down by the Georgia Supreme Court on July 5, 2011, the court held that a lawsuit for an executor's breach of fiduciary duty was not moot, even though all parties except the executor had settled the case and the money that had been improperly distributed by the executor was returned to the proper party.
Executors of wills owe a strict duty to the estate, and the very fact that the executor had breached that duty, the Court explained, gave rise to damages, even if the breach had been corrected.
The judge of the trial court in the case had awarded attorney fees against the executor. The Supreme Court overruled this part of the lower court's decision, stating that it was for a jury to decide whether a party to a case has committed one of the acts that give rise to ground for awarding attorney fees.
Click "read more" below and to the right for the full text of the case.
This firm has already seen one case where the client sought to proffer Facebook evidence. Given the prevalence of that website as a medium of communication, it will only be a matter of time before Facebook evidence becomes an issue in probate and estate litigation.
Facebook comments and statuses are classic examples of hearsay evidence, but they generally may fall under one of several hearsay exceptions (notably, statements of party-opponents in probate litigation).
It is interesting to see the way in that Facebook evidence is being sifted by the country's appellate courts. Though not a Georgia probate law case, the case of State v. Eleck is one in which the appellate court agreed to exclude Facebook conversations as evidence, despite that they were crucial to the state's case. As part of its reasoning, the Connecticut Court of Appeals cited the "general lack of security of the medium," the implication being that someone else could have broken into the alleged declarant's Facebook account and posted the messages.
Chicago evidence law Professor Colin Miller disagrees with the appellate court's reasoning in an excellent blog post here. My sympathies are with Mr. Miller. In an age where the majority of a person's communications in a day may actually be by electronic means, it should be left to a jury to decide the likelihood that a particular communication was the result of alleged "hacking" into the declarant's account.
At Tanner Pittman, LLC, we combine adroit knowledge of trial skills and evidence law with expertise in estate planning and probate to bring value to our clients in will and estate contests.
UPDATE: The only Georgia case that seems to deal heavily with the use of Facebook evidence is the criminal stalking case of Placanica v. State. That case, however, does not set forth any new law regarding the admissibility of such evidence.
Huguette Clark, whose copper-baron father died in 1925, died in New York recently, leaving a will that devises most of her property to charities, gives a substantial gift to her lawyer and accountant, and completely disinherits all of her family members, reports MSNBC.
As if this alone didn't make the estate rife for a fight, Joel Schoenmeyer notes in his "Death and Taxes" blog that the attorney, who was also named co-executor of the will, cut off Clark's relatives from contact with her in 2005. Meanwhile, the accountant co-executor . . .yeah - he's a convicted sex offender, of the distributing-lewd-materials-to-minors stripe.
The looming estate litigation bomb.
The baby boomer generation is retiring, and their parents are leaving us. We are poised to witness the greatest transfer of wealth from one generation to another (and then another) the nation has ever seen. And with it: millions of lawyers' billable hours in estate litigation.
What will be the single largest issue litigated? My money is on "undue influence." Undue influence in making a will - like fraud - invalidates the will completely. When a large beneficiary of an estate occupied a confidential relationship with the testator and takes a portion to the exclusion of his natural heirs, undue influence is almost always an issue.
The one mistake to avoid.
Sometimes, claims of undue influence are inevitable and must be litigated. (It's a rare set of children that simply allow their octogenarian father to leave his entire estate to his twenty-five-year-old wife of three years.) But other cases unfortunately see their day in court because of poor planning from the outset.
In Georgia, “[w]here a person  obtaining a substantial benefit under a will  occupies a confidential relationship toward the maker of the will and  is not a natural object of the maker's bounty, a presumption of undue influence arises if  it is shown that the will was made at the request of such person.” Bryan v. Norton, 245 Ga. 347, 348, 265 S.E.2d 282, 283 (1980).
A presumption of undue influence would be a terrible thing to face in court:
The problem: How much do you trust your loved ones to care for a special-needs beneficiary of a will? Probably not this much:
A client recently retained me about a will in which almost all of the estate was left to the testatrix' daughter-in-law (we'll call her Tina). The will itself contained no instructions as to how Tina was to use the money, but she had assured the testatrix (whom we'll call Alice) she would use it to care for her (Alice's) handicapped son, Ben.
My client is Ben's cousin. She came to me with the question, "what can we do to make sure Tina uses this money on Ben's behalf?"
The answer: we have to be very, very creative. And we'll likely go to court over the question.
The reason: no amount of oral instructions or even writings outside your will can bind a recipient of property under that will as to how she (in this case, Tina) can use that property. As any law student can tell you: "the law does not countenance a gratuitous promise." In other words, promises are not legal contracts. Contracts only form when both sides of the bargain get something.
"But wait a minute," you might be saying. "Tina does get something here. She's getting a large inheritance when she wasn't even the testatrix' child."
And, unfortunately, that's wrong. Presuming Tina did promise to use the money on Ben's behalf, she's not getting anything other than the honor of being his trustee. (Leave aside for a moment the question of trustee's fees.) She was simply making a gratuitous promise. It wasn't "give me some money, and I'll take care of Ben." Rather, it was "put some money aside, and I'll give it all to Ben."
The lesson: As always, estate planning should not be done without the advice of a seasoned estate planner. Using Tanner Pittman, LLC's estate planning methods, the above problem would never have formed.
Tanner Pittman, LLC is a West Georgia law firm that specializes in estate services, civil litigation, and legal transactions.
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