Law Commons^™

Perpetuities And The Genius Of A Free State, Joshua C. Tate

Vanderbilt Law Review

Legal history, like all history, is inevitably a speculative affair. No one can be sure what the editors of Justinian's Digest might have excised from long-lost works of classical Roman law; nor can one know for certain what went through the minds of certain justices of the U.S. Supreme Court in the mid-twentieth century when they formed and reformed their views on Roosevelt's New Deal. Of course, scholars can try to chip away at this uncertainty: great progress can be made through educated guesses and learned theories. But certainty about the past is reserved for those who lived in it. …

Probate Law Meets The Digital Age, Naomi Cahn

Vanderbilt Law Review

This Article explores the impact of federal law on a state fiduciary's management of digital assets. It focuses on the lessons from the Stored Communications Act ("SCA'), initially enacted in 1986 as one part of the Electronic Communications Privacy Act. Although Congress designed the SCA to respond to concerns that Internet privacy posed new dilemmas with respect to application of the Fourth Amendment's privacy protections, the drafters did not explicitly consider how the SCA might affect property management and distribution. The resulting uncertainty affects anyone with an email account. While existing trusts and estates laws could legitimately be interpreted to …

Unconstitutional Perpetual Trusts, Steven J. Horowitz, Robert H. Sitkoff

Vanderbilt Law Review

"I never can be thankful, Mr. Bennet, for any thing about the entail."t Perpetual trusts are an established feature of today's estate planning firmament. Yet little-noticed provisions in the constitutions of nine states, including in five states that purport to allow perpetual trusts by statute, proscribe ')erpetuities." This Article examines those provisions in light of the meaning of ')erpetuity" as a legal term of art across history. We consider the constitutionality of perpetual trust statutes in states that have a constitutional ban on perpetuities and whether courts in states with such a ban may give effect to a perpetual trust …

Arbitration Of Trust Disputes: Two Bodies Of Law Collide, S. I. Strong

Vanderbilt Journal of Transnational Law

Once considered nothing more than "mere" estate-planning devices, trusts play a large and growing role in the international economy, holding trillions of dollars of assets and generating billions of dollars of income each year. However, the rising popularity of both commercial and noncommercial trusts has led to an explosion in hostile trust litigation, leading settlors and trustees to search for new and less expensive ways to resolve trust-related disputes.

One possible solution involves use of a mandatory arbitration provision in the trust itself. However, the unique, multiparty nature of trust disputes often makes this sort of arbitration highly controversial.

This …

Agents In Secrecy: The Use Of Information Surrogates In Trust Administration, Lauren Z. Curry

Vanderbilt Law Review

Trusting another to look after one's best interest when money is at stake is difficult in many different situations. This is true in the area of trust administration as well. As with most areas of law and regulation, trust law addresses this concern primarily through the requirement of information disclosure. Information disclosure to trust beneficiaries has become a heated issue among trust scholars and practitioners. Interestingly, as fundamental as disclosure may be in trust administration, the duty to disclose is not precisely defined at common law and is far from uniform. This creates a profusion of problems for trustees who …

Individualized Justice In Disputes Over Dead Bodies, Frances H. Foster

Vanderbilt Law Review

In February 2007, the world had a ringside seat to a truly macabre fight. Under the glare of television cameras, Anna Nicole Smith's nearest but not dearest' battled in a Florida probate court over custody of her body. The parties agreed on only one point: "Anna Nicole Smith's appearance was a paramount issue to her." Yet, those same parties denied Anna Nicole after death the beauty she prized during life. Because of their protracted legal wrangling, Anna Nicole went to her grave a decomposed corpse in a closed casket. Anna Nicole Smith's tragic fate is by no means unique. For …

Neotrusteeship Or Mistrusteeship? The "Authority Creep" Dilemma In United Nations Transitional Administration, Christian E. Ford, Ben A. Oppenheim

Vanderbilt Journal of Transnational Law

State failure poses one of the greatest threats to international peace and security. The collapse of governing institutions breeds civil wars, generates refugee flows, causes enormous civilian suffering, foments instability in neighboring countries, and provides safe havens for transnational criminal and terrorist organizations. As a result, commentators and policymakers have increasingly called for a remedy to the problem of state failure. One of the most compelling arguments is to draw on an old legal institution: international trusteeship by the United Nations (U.N.). This Article argues that while trusteeship may prove effective in managing state failure, it also carries risks. International …

Public Independent Fact-Finding: A Trust-Generating Institution For An Age Of Corporate Illegitimacy And Public Mistrust, R. William Ide Iii, Douglas H. Yarn

Vanderbilt Law Review

Public distrust in the wake of corporate scandals caused corporate legitimacy crises for the companies involved and for the marketplace as a whole. The loss of trust has contributed to an environment in which traditional responses to allegations of wrongdoing and incompetence are less effective. Alternatively, organizations engage in "Public independent fact-finding" ("PIFF") by hiring public figures with reputations for integrity to conduct internal investigations and to report their findings to the public. This Article describes the role played by trust, reputation, and social legitimacy in the health of organizations and examines corporate legitimacy crises and traditional responses. Identifying factors …

Planning For The Future: Using Child Support Trusts To Prepare Both Father And Child For Life After Professional Sports, Thomas C. Quinlen

Vanderbilt Journal of Entertainment & Technology Law

The issue of professional athletes siring children out of wedlock was first thrust into the national conscience in an article in Sports Illustrated in May 1998. The SI piece was followed by several newspaper articles in various cities around the country, but like most hot news topics, it was quickly forgotten as the nation moved on to more pressing issues. This Note aims to revisit this issue with an eye towards practical and legal resolution of this pervasive problem, suggesting ways that lawyers and agents can establish child support trusts to represent their clients' interests and provide the best result …

The Trust Offshore, Antony G.D. Duckworth

Vanderbilt Journal of Transnational Law

I was not present at the birth of the offshore financial centers or of their trust business, but I am told that the mother was taxation. Perhaps that is an oversimplification, but I do not doubt that taxation was the major influence. The typical settlor was a taxpayer from one of the major common law countries, and his primary motive for going offshore was tax avoidance. But there were also a few settlors from other places, some motivated by estate planning considerations (the trust allowing them to make property arrangements which could not be made at home), some by fear …

Learning To Live With The New Foreign Nongrantor Trust Rules, Carlyn S. Mccaffrey, Elyse G. Kirschner

Vanderbilt Journal of Transnational Law

The Small Business Job Protection Act of 1996 (the 1996 Act) was intended to deal a heavy blow to the appeal of foreign trusts to U.S. persons. The results were mixed. On the one hand, the 1996 Act imposes an array of reporting requirements, imposes harsh penalties on failures to comply with these requirements, increases the interest charge imposed on taxes paid on distributions of accumulated income from foreign trusts, treats loans of cash from foreign trusts as distributions, and expands the kinds of gifts that can be treated as indirect transfers from foreign trusts. On the other hand, curiously, …

Law For Sale: Alaska And Delaware Compete For The Asset Protection Trust Market And The Wealth That Follows, Amy L. Wagenfeld

Vanderbilt Journal of Transnational Law

For years, U.S. citizens have looked to offshore jurisdictions to create trusts that protect a settlor's assets from the claims of creditors, yet allow the settlor to be named as a beneficiary. United States law and public policy have long been against the idea of allowing a person to enjoy benefits from assets that are simultaneously shielded from creditors' claims. However, despite this existing public policy, Alaska and Delaware have enacted statutes that attempt to do just that. Essentially, these statutes claim to make what used to be possible only offshore, now possible in the United States.

This Note seeks …

Offshore And "Other" Shore Asset Protection Trusts, Eric Henzy

Vanderbilt Journal of Transnational Law

The Portnoy, Brooks, and Lawrence cases demonstrate that under the right facts and circumstances, courts can and will enter orders finding spendthrift provisions of asset protection trusts invalid. These cases and this Article discuss a path that a bankruptcy court may follow to find that property transferred to an asset protection trust is property of a bankruptcy estate. Such a finding may lead to effective remedies for creditors, such as denial of a discharge to a debtor, orders compelling a debtor to direct a trust trustee to transfer assets, with contempt orders if the debtor fails to comply, and, possibly, …

English Fiduciary Standards And Trust Law, David Hayton

Vanderbilt Journal of Transnational Law

This Article will focus on two major areas of inquiry in contemporary English trust law: fiduciary standards and substantive trust law. In Part II it will cover the trustees' exercise of managerial discretions and of distributive discretions, before considering the role and duties of protectors in relation thereto. In Part III it will focus upon spendthrift and other protective trusts, the termination of trust rules, the hesitancy to invoke public policy to invalidate conditions imposed by settlors, and difficulties in ascertaining whether a proper valid trust has been created.

Respect For "Form" As "Substance" In U.S. Taxation Of International Trusts, Donald D. Kozusko, Stephen K. Vetter

Vanderbilt Journal of Transnational Law

...we might decide that the attribution rule should not be applied so broadly, or so automatically. But how would such a system be devised by regulation? The attribution rule could be applied to trusts in which the discretion of the trustee is very limited and the beneficial interests so clearly ascertainable that the trust is, for all practicable purposes, transparent. That is, however, only a small universe of cases. This leads to the further conclusion that the attribution rule has to be applied based on a facts and circumstances determination of the beneficial interest in each case. Yet that seems …

International Recognition And Adaptation Of Trusts: The Influence Of The Hague Convention, Adair Dyere

Vanderbilt Journal of Transnational Law

The process of bringing English-style trusts into systems that do not have a similar device is fraught with difficulties. This is especially true with respect to efforts directed towards the creation of a domestic trust law within such a system, but it is also true about the adaptation of legal institutions that is necessary in order to recognize trusts created under foreign law, in accordance with Article 11 of the Hague Trusts Convention. Thus far, it can be said that no country that did not have trusts before the Hague Trusts Convention has reacted to the Convention by adopting a …

The Civil Law Trust, Maurizio Lupoi

Vanderbilt Journal of Transnational Law

It is generally held that trusts are incompatible with the basic assumptions of civil law systems. In order to discuss this statement one would have to inquire, first, what is meant by the term "trusts"; second, what assumed common characteristics of the civil law systems are being envisaged and declared to bein compatible with trusts; and third, why those characteristics should be incompatible with trusts. It is also commonly held that the Hague Convention of 1984 on the law applicable to and the recognition of trusts concerns only those trusts that are foreign to the jurisdiction in which the rules …

The Role Of Legal Doctrine In The Decline Of The Islamic Waqf: A Comparison With The Trust, Jeffrey A. Schoenblum

Vanderbilt Journal of Transnational Law

The starting point of this article is that the same impulses present in societies with Western legal systems to manage family wealth over time have been present in Islamic societies as well. But unlike other legal regimes regulating such impulses, waqf law has been largely unresponsive, especially in light of changing typologies of wealth and socio-economic conditions. A number of factors explain the failure of legal doctrine to respond. The first of these is the religious or divine grounding of waqf law, making it difficult for the law to evolve in a responsive and uncontroversial manner, one that does not …

The Islamic Family Endowment (Waqf), David S. Powers

Vanderbilt Journal of Transnational Law

As part of the larger Islamic inheritance system, endowment law accorded Muslim proprietors a legal means to circumvent the effects of the Islamic inheritance rules by allocating usufruct rights to specified people in specified amounts and to regulate the transmission of those rights from one generation of beneficiaries to the next. Over time, the institution appears to have contributed to the physical integrity of both urban and rural property. Whether or not it also contributed to the economic viability of the local economy is a subject that deserves further investigation." At the same time, the transformation of significant segments of …

Further Thoughts On Realizing Gains And Losses At Death, Joseph M. Dodge

Vanderbilt Law Review

Professor Lawrence Zelenak has put forth a detailed proposal' for repealing present Section 1014 of the Internal Revenue Code, which gives a decedent's successor a basis equal to the estate tax value of property at death. This rule, commonly known as the stepped-up basis (at death) rule, has been roundly criticized as producing an unwarranted (inequitable, nonneutral) income tax loophole, because the step up in basis without realization of gain removes the gain from the tax system entirely. Its repeal, therefore, offers a potential source of significant revenue. Moreover, Section 1014 aggravates the "lock-in effect"; that is, it inhibits rational …

The Resurgence Of The International Will: A Call For Federal Legislation, David Quam

Vanderbilt Journal of Transnational Law

Recent Development--

In August 1991, eighteen years after diplomats and scholars completed the Convention Providing a Uniform Law on the Form of an International Will (Washington Convention), the United States Senate consented to ratification. Before the Washington Convention enters into force, however, the United States Congress must enact federal legislation that requires each of the fifty states to recognize the Convention and its prescribed form of an international will.

The Washington Convention is the result of the Diplomatic Conference on Wills which convened in Washington, D.C., in October 1973. Its primary objective is to provide testators with a common means …

Dying With The "Living" (Or"Revocable") Trust: Federal Tax Consequences Of Testamentary Dispositions Compared, C. Douglas Miller, R. Alan Rainey

Vanderbilt Law Review

The purpose of this Article is to examine the federal tax consequences of the revocable trust to the grantor and to his estate.Principally due to the grantor's power to revoke the trust and re-vest the trust assets in himself the federal tax consequences to the grantor are in effect, if not in cause, insignificant. The perception that creation of a revocable trust has no federal tax consequences,therefore, is at least to that extent essentially correct, and the discussion herein is merely a summary review of the tax consequences to the grantor upon the trust's creation and during its administration. Perhaps …

Concealing Legislative Reform In The Common-Law Tradition: The Advancements Doctrine And The Uniform Probate Code, Mary L. Fellows

Vanderbilt Law Review

This essay first sets forth the doctrine of advancements and includes a discussion of its suitability for a study of statutory reform and the purpose and origin of the doctrine. The essay then demonstrates how a presumption against finding an advancement that can be rebutted only by a writing showing a contrary intent operates as a practical repeal of advancements. Next, the essay explores the rationales of the drafters of the Uniform Probate Code(UPC) in repealing the advancements doctrine by subterfuge and analyzes the costs of reform by subterfuge. Finally, the essay recommends an alternative approach to reforming the advancements …

The Winds Of Change In Wills, Trusts, And Estate Planning Law, The Editor

Vanderbilt Law Review

The articles in this Symposium illustrate three different aspects of change. The essay by Professor Fellows provides an analysis and criticism of one very important change, the trend toward the use of a legislative rather than judicial forum to create new law. In the second article, Professor Rein discusses adoption and proposes a mechanism by which the laws of succession can be modernized better to reflect the social phenomenon of adoption,whether of children or adults, legal or equitable. Professor Miller and Mr. Rainey in their article examine the premises that have prompted the increasing use of a revocable trust rather …

Books Received, Journal Staff

Vanderbilt Journal of Transnational Law

Books Received

Utilization of Outer Space and International Law

Gijsbertha C.M. Reijnen.

Amsterdam and New York: Elsevier Scientific Publishing Company, 1981. Pp. 179, $69.75.

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International Estate Planning

William H. Newton, III.

Colorado Springs: Shepard's/McGraw-Hill Company, 1981. Pp. 614.

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International Tax Avoidance and Evasion, Colloquy of the Council of Europe, Strasbourg, 1980

Publication 31, Publications of the International Bureau of Fiscal Documentation Amsterdam: International Bureau of Fiscal Documentation, 1981. Pp.184, Dfl. 65.00.

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Fiscal Reform in Bolivia: Final Report on the Bolivian Mission on Tax Reform Richard A. Musgrave

Cambridge: Harvard Law School International Tax Program, 1981. Pp. 593, …

Books Received, Journal Staff

Vanderbilt Journal of Transnational Law

Books Received

CANADIAN CRIMINAL LAW: INTERNATIONAL AND TRANSNATIONAL ASPECTS

By Sharon A. Williams and J. G. Castel

Toronto: Butterworth's, 1981. Pp. 513. $80.00.

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CASES AND MATERIALS ON SALE OF GOODS

By John Adams

London & Canberra: Croom Helm: Ltd., 1982. Pp. 174. $15.50.

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THE DEFENSE POLICIES OF NATIONS: A COMPARATIVE STUDY

Edited by Douglas J. Murray and Paul R. Viotti

Baltimore and London: The Johns Hopkins University Press, 1982. Pp. 525. $35.00 (cloth), $12.95 (paper)

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DOCUMENTS ON THE LAWS OF WAR

Edited by Adam Roberts and Richard Guelff

New York: the Clarendon Press; Oxford University Press, 1982. …

The Fiduciary Responsibilities Of A Surviving Partner Acting As Executor Of The Deceased Partner's Estate, Sandra L. Randleman

Vanderbilt Law Review

This Note examines the nature of the fiduciary duty in the situation in which an executor/surviving partner must decide whether to consent to a continuation of the partnership business after dissolution and in the situation in which the surviving partner has an option to purchase the deceased partner's interest in the partnership under the terms of a partnership agreement. After separately considering the nature of the fiduciary duties of an executor and a surviving partner, the Note discusses the degree to which the fiduciary loyalty that an executor/surviving partner owes the deceased partner's estate governs his decision on whether to …

Federal Estate And Gift Taxation Of Joint Interests: Planning And Policy Perspectives, Hugh D. Brown

Vanderbilt Law Review

This Note will first provide a brief background outlining the incidents of joint tenancy which make it an attractive form of co-ownership under state law. This background section also will place joint ownership in the overall perspective of federal estate and gift taxation by pointing out the impossibility of achieving certain basic federal estate planning objectives in an estate composed primarily of jointly held assets. The Note will then analyze the specific provisions of the Internal Revenue Code governing federal estate and gift taxation of joint interests. This analysis will: first, focus on some of the legal problems generated by …

Current Problems Facing The Executor Taking The Section 2053 Estate Tax Deduction, Jay D. Christiansen

Vanderbilt Law Review

Section 2053 of the Internal Revenue Code allows the executor to deduct from the gross estate amounts attributable to expenses, indebtedness, and taxes. This Note will examine problems currently confronting an executor who is attempting to utilize the 2053 deduction. The first problem examined in this Note is the conflict in the federal courts of appeals regarding the deductibility of expenses incurred as a result of a sale of decedent's property. The statute,cases, and regulations in this area will be examined, and a suggested approach for the executor encountering this problem will be provided. The second problem considered is the …

Foreign Accumulation Trusts And The Tax Reform Act Of 1976, David H. Simmons

Vanderbilt Journal of Transnational Law

If the foreign trust is not a grantor trust under the Grantor Trust Provisions (sections 671-679), then the new Act creates several new disparities in the tax treatment between it and a corresponding domestic accumulation trust. Domestic accumulation trusts are no longer subjected to a capital gains throw back, while capital gains of foreign trusts are included in DNI, subject to throw back, and then taxed as ordinary income to the beneficiary because of the abolition of the character rules upon accumulation distribution. Foreign trusts are subjected to throw back of accumulation distributions even though the accumulation was during the …