Estates and Trusts Commons^™

Property Law For Positive Externalities: Carving New Sticks For The Bundle, J.B. Ruhl, James Salzman

William & Mary Law Review

Property law has long confronted a troubling puzzle: Why does doctrine focus so much on eliminating harms flowing as negative externalities from uses of property—curbing pollution, nuisances, and other harmful land uses—while largely ignoring the potential to encourage positive externalities? Why such a strong focus on preventing bads instead of promoting goods? Using a case of a natural capital resource and the ecosystem services of flood control, water purification, and pollination it provides, this Article explains how and why existing doctrine fails to recognize these benefits as distinct property interests, leading to systematic underinvestment in conservation and service provision. We …

(Reverse) Piercing The Trust Veil, Eric Kades

Faculty Publications

Emergent doctrine deems trusts legal entities distinct from their trustees and beneficiaries. Venerable doctrine empowers creditors to "pierce the veil" separating entities' and their owners' property to avoid inequitable treatment. This article weaves together the new and old to craft a legal roadmap for reversing the ongoing race to the bottom among the states authorizing indefensible self-settled asset protection trusts (SSAPTs) designed solely for the purpose of swindling creditors. As a matter of both policy and doctrine, piercing (more precisely, reverse piercing) an entity's veil is ideally suited to empower the creditor of a SSAPT beneficiary to get paid from …

Anti Trusts: Reforming An Excessively Flexible Legal Tool, Eric Kades

Faculty Publications

Trusts are one of the most flexible legal tools in lawyers’ arsenals, deployed for socially desirable uses ranging from supporting orphans to structuring complex investments. Trusts, however, are also used for a host of socially undesirable purposes, including restraint of trade, cheating creditors, establishing family dynasties akin to feudalism, and avoiding taxes. This negative litany shows that flexibility has a dark side, and these undesirable trust uses have accelerated in the last few decades. Creative lawyers continuously find novel uses for moldable tools like the trust. This Article argues that long experience and recent developments teach us that dark eclipses …

A New Feudalism: Selfish Genes, Great Wealth, And The Rise Of The Dynastic Family Trust (Dft), Eric Kades

Faculty Publications

Today’s record levels of economic inequality are infecting our future as the top 0.01% bequeath vast wealth to their descendants. With the death of the Rule Against Perpetuities (RAP), this inequality has the potential to harden social class lines—not just for a generation or two, but forever. Although it may sound implausible, interviews with estate lawyers serving very high-net-worth clients reveal that some members of the wealthiest tier of testators are already exploiting the RAP’s elimination, along with a tax loophole, to establish dynasty trusts that will financially empower their bloodline as long as it continues. Recent work in evolutionary …

Justifying Anglo-American Trusts Law, Ying Khai Liew

William & Mary Business Law Review

Is the existence of trusts law within Anglo-American law justified? The literature to date does not provide a satisfactory answer. Situating the doctrinal features of trusts law within the liberal tradition of political morality, this Article suggests that trusts law is justified because it enhances personal autonomy in a unique way. It is comprehensively autonomy-enhancing, with express, constructive, and resulting trusts each playing a unique role in achieving this aim. Thus, the law provides a facility for property owners to unilaterally deal with their own property (express trusts), allows individuals the freedom to enlist others in their pursuit of their …

The Domains Of Loyalty: Relationships Between Fiduciary Obligation And Intrinsic Motivation, Deborah A. Demott

William & Mary Law Review

Recent scholarly inquiry into fiduciary law predominantly focuses on whether the subject is a coherent field and not a piecemeal assortment of doctrinal detail. This Article looks to the future and to relationships between the formal domain of fiduciary law and other factors that shape conduct. These include intrinsic motivation, markets for professional services, and forces like the operation of reputation. The Article demonstrates that looking across domains, from the legal to the extralegal, casts in sharp relief the reasons why fiduciary law is distinctive. These stem from the specific qualities of relationships to which fiduciary law applies, as well …

Erisa Defined Benefit Plans Are Not "Trust"Worthy, Stewart E. Sterk

William & Mary Law Review Online

What role does the common law of trusts play in policing investment decisions made in the context of a defined-benefit retirement plan governed by ERISA? That issue, among others, divided the Supreme Court this past term in Thole v. U.S. Bank N.A. The Court’s majority decided the case by holding that plan beneficiaries had no Article III standing to challenge allegedly self-interested investment decisions made by the plan’s sponsor and administrator. Because the Court grounded its decision in constitutional standing, Congress would be powerless to confer standing on plan beneficiaries without also amending the substantive rights accorded those beneficiaries. This …

Community-Driven Climate Solutions: How Public-Private Partnerships With Land Trusts Can Advance Climate Action, Jessica Grannis

William & Mary Environmental Law and Policy Review

In 2018 and 2019, several landmark developments demonstrated the failings of past efforts to address climate change and the need for new and more ambitious solutions. In October 2018, the Intergovernmental Panel on Climate Change (“IPCC”) released a dire report indicating that the window is rapidly closing for countries to dramatically reduce emissions in order to avoid the worst consequences of climate change and predicting dramatic consequences to the environment and public health if countries fail to take action; young activists started taking to the streets to demand more ambitious action to address climate change; and, at the 25th Conference …

Kaestner Fails: The Way Forward, Mitchell M. Gans

William & Mary Business Law Review

This past term, the Supreme Court applied the Due Process Clause to prevent the states from closing down a tax strategy that employs out-of-state trusts. Many had hoped that the case would serve as a vehicle for the Court to overrule taxpayer-friendly precedents that make the strategy possible. But it failed. The question that emerges is whether the decision leaves the states with a path to address the strategy and thereby prevent it from being used to exacerbate issues of inequality. After examining the decision, this Article considers the options available to the states and then suggests a way forward.

Of Piketty And Perpetuities: Dynastic Wealth In The Twenty-First Century (And Beyond), Eric Kades

Faculty Publications

For the first time since independence, in a nation founded in large part on the rejection of a fixed nobility determined by birth and perpetuated by inheritance, America is paving the way for the creation of dynastic family wealth. Abolition of the Rule Against Perpetuities in over half the states along with sharp reductions in, and likely elimination of, the federal estate tax mean that there soon will be no obstacles to creating large pools of dynastic wealth insuring lavish incomes to heirs for generations without end. The timing of these legal changes could hardly be worse. Marshaling innovative economic …

Borrowing In The Shadow Of Death: Another Look At Probate Lending, David Horton

William & Mary Law Review

“Fringe” lending has long been controversial. Three decades ago, demand for subprime credit soared, and businesses started to offer high-interest rate cash advances, such as tax refund anticipation loans, payday loans, and pension loans. These products have sparked intense debate and are subject to a maze of rules.

However, in Probate Lending, published in the Yale Law Journal, a coauthor and I examined a form of fringe lending that has gone largely unnoticed: firms that pay lump sums in return for an heir or beneficiary’s interest in a pending decedent’s estate. Capitalizing on a California law that requires …

Maximizing Ponzi Loss Deductions For Estate And Income Tax Purposes: Are Taxpayers Better Off Dead?, Valrie Chambers, Brian Elzweig

William & Mary Business Law Review

There is a long history of cases interpreting whether a theft loss deduction for securities fraud is allowable for personal income taxes. The cases require that for a theft loss to be actionable as such, it would have to meet the requirements of the common law definition of theft in the U.S. state in which it occurred. This generally requires direct privity between the person claiming the loss and the person who committed the theft. Because most securities transactions are brokered, the direct privity is lost and a theft loss deduction is denied in favor a capital loss. Recently, in …

The Method In Fiduciary Law's Mixed Messages, Evan J. Criddle

Popular Media

No abstract provided.

Liberty In Loyalty: A Republican Theory Of Fiduciary Law, Evan J. Criddle

Faculty Publications

Conventional wisdom holds that the fiduciary duty of loyalty is a prophylactic rule that serves to deter and redress harmful opportunism. This idea can be traced back to the dawn of modern fiduciary law in England and the United States, and it has inspired generations of legal scholars to attempt to explain and justify the duty of loyalty from an economic perspective. Nonetheless, this Article argues that the conventional account of fiduciary loyalty should be abandoned because it does not adequately explain or justify fiduciary law’s core features.

The normative foundations of fiduciary loyalty come into sharper focus when viewed …

Let My Trustees Go! Planning To Minimize Or Eliminate Virginia And Other State 12 Income Taxes On Trusts (Outline), Richard W. Nenno

William & Mary Annual Tax Conference

No abstract provided.

Let My Trustees Go! Planning To Minimize Or Eliminate Virginia And Other State Income Taxes On Trusts (Powerpoint), Richard W. Nenno

William & Mary Annual Tax Conference

No abstract provided.

Forfeiting Trust, Deborah S. Gordon

William & Mary Law Review

Over the past two years, a significant number of appellate courts in jurisdictions throughout the country have faced trust provisions that purport to disinherit any beneficiaries who challenge a trustee’s decision making. Such provisions to “secure compliance ... with dispositions of property”—known as “forfeiture,” “no-contest,” “anticontest,” or “penalty” clauses—have appeared in wills for well more than a century. But the trust clauses differ from their testamentary counterparts and thus deserve serious scrutiny in their own right, especially because the abundance of recent cases has led to increasingly inconsistent and haphazard approaches. This Article exposes the problems that trust forfeiture clauses …

Fiduciary Governance, Paul B. Miller, Andrew S. Gold

William & Mary Law Review

The fiduciary relationship is one of the most fundamental legal relationships, and its importance for both public and private law is increasingly recognized. Fiduciary mandates typically involve one person—the fiduciary—administering the affairs or property of other persons—an individual beneficiary or group of beneficiaries. Yet, as we will demonstrate, this is not the only way fiduciary relationships are structured. Most accounts of fiduciary law oversimplify the law because they exclude a categorically different form of fiduciary relationship. A significant set of fiduciary relationships feature governance mandates in which the fiduciary is charged with pursuing abstract purposes rather than the interests of …

Special Family And Lifestyle Tax Issues, Helena S. Mock

William & Mary Annual Tax Conference

No abstract provided.

Aligning The Stars -- Estate Planning For Entrepreneurs In Interesting Times, Stefan F. Tucker, Mary Ann Mancini, Tammara Langlieb

William & Mary Annual Tax Conference

No abstract provided.

Kennedy V. Plan Administrator For Dupont Savings & Investment Plan: Anti-Alienation And Anti-Cutback Rules, Christina Payne-Tsoupros

W&M Law Student Publications

No abstract provided.

Child Trust Fund, Christopher L. Griffin Jr.

Faculty Publications

No abstract provided.

Law, Biology, And Property: A New Theory Of The Endowment Effect, Owen D. Jones, Sarah F. Brosnan

William & Mary Law Review

Recent work at the intersection of law and behavioral biology has suggested numerous contexts in which legal thinking could benefit by integrating knowledge from behavioral biology. In one of those contexts, behavioral biology may help to provide theoretical foundation for, and potentially increased predictive power concerning, various psychological traits relevant to law. This Article describes an experiment that explores that context. The paradoxical psychological bias known as the "endowment effect" puzzles economists, skews market behavior, impedes efficient exchange of goods and rights, and thereby poses important problems for law. Although the effect is known to vary widely, there are at …

Whose Money Is It Anyway? The Case For A Mortality Discount For Cash Balance Plan Early Termination Lump Sum Distributions, William Handley Woolston

Student Award Winning Papers

No abstract provided.

The Empire Of Illness: Competence And Coercion In Health-Care Decision Making, Marsha Garrison

William & Mary Law Review

The law's willingness to take account of factors that interfere with volition tends to vary in accordance with its underlying goals. The law of wills is dominated by the principle of freedom of testation; it has thus developed doctrines aimed at detecting coercive influences that interfere with the testator's free agency. The law of medical decision making, dominated by the analogous principle of patient autonomy, has not developed doctrines aimed at detecting coercive influences despite a large and growing body of evidence showing that disordered insight and major depression, two common medical conditions, often have a coercive, negative effect on …

In Defense Of The No Further Inquiry Rule: A Response To Professor John Langbein, Melanie B. Leslie

William & Mary Law Review

No abstract provided.

The Virginia Uniform Trust Code, John E. Donaldson

Faculty Publications

No abstract provided.

The Hershey Trust's Quest To Diversify: Redefining The State Attorney General's Role When Charitable Trusts Wish To Diversify, Jennifer L. Komoroski

William & Mary Law Review

No abstract provided.

Public Trust & Distrust: Theoretical Implications Of The Public Trust Doctrine For Natural Resource Management, Erin Ryan

Faculty Publications

This Comment reviews the theoretical underpinnings of the public trust, a doctrine originating in Roman common law and now constitutionalized by many states, and explores its contentious reception by green legal theorists. Since Professor Joseph Sax's revival of the doctrine as a vehicle for environmental legal advocacy in the early 1970s, it has been haJled by many. as the most powerful tool available for protecting natural resource commons and attacked by others who argue that use of the property rights-based doctrine will reify an ownership approach to natural resources and obstruct the development of more stewardship-oriented legal theories of natural …

From Jeans To Genes: The Evolving Nature Of Property Of The Estate, A. Mechele Dickerson

Faculty Publications

No abstract provided.