Monthly Archives: March 2024

Clients desiring to make gifts often ask about the conditions that they can place upon the gift thereby requiring or forbidding some act prior to receipt. Requests run the gamut from prohibition on tattoos to no children outside of wedlock to divorce of a spouse. If the condition goes against public policy, for example, requiring divorce or a criminal act, or is otherwise impossible to meet, for example, transmuting into an inanimate object, then it will be ignored. Recently, a Michigan case, Marine-Adams v. Tenerowicz (In re Boutet), (2024 Mich. App. LEXIS 643), examined what happens when the intended donee decided against meeting the prerequisite conditions for receipt of the gift.

In 2005, Bernard Boutet created a revocable trust naming himself and his wife, Marilyn, as co-Trustees which they amended later that year. Upon the death of Marilyn and Bernard, the trust was to benefit their three children, Darrell, Dale, and Diane. Marilyn died in 2009. Their son, Dale, died in 2014. Bernard amended the trust twice in 2019, both on the same day. One amendment named the attorney who drafted the trust as successor Trustee of the trust. The other amendment inserted language that conditioned Diane’s receipt of a portion of the trust upon her disclosing her son’s father to her son and providing scientific evidence of the same within 60 days of Bernard’s death. Bernard died about six months after executing the 2019 amendments. After Bernard’s death, Diane met with the drafting attorney to discuss the last amendment. The case indicates that Diane understood that she would forfeit her inheritance if she failed to meet the conditions imposed upon the gift, that she was not certain which of two men was the biological father, and that she was estranged from her son at that time. The case further indicates that Diane failed to take any action because she thought that the terms of the conditions were unenforceable, although she took no steps to have the conditions declared unenforceable.

In 2021, the successor Trustee petitioned the court to modify the trust and for instructions regarding what to do with Diane’s share. The successor Trustee failed to notice the other trust beneficiaries and the probate court denied the petition. Shortly thereafter, the other beneficiaries filed a petition to remove the successor Trustee. In their petition to the court, they argued that the successor Trustee breached his duties by failing to follow the terms of the trust by doing what was necessary to forfeit Diane’s share of the trust based upon her failure to fulfill the conditions placed on her gift by her father. The court removed the successor Trustee and granted the beneficiaries’ request for forfeiture of Diane’s share. Diane appealed and lost. The appellate court found that the Trust had clearly defined the acts that Diane needed to take to receive her share of the Trust and that she failed to provide any information to her son and failed to undertake any steps to comply with the conditions or have them declared invalid. Dicta in the concurring opinion seemed to indicate that if Diane had raised the issue of the conditions being invalid as against public policy, she may have prevailed. Of course, because Diane failed to raise the issue in the lower court, she was precluded from raising it on appeal.

While it’s unclear whether Diane would have prevailed in having the condition set aside were she to have objected earlier in the proceedings, it’s important to take the lesson of being proactive when faced with seemingly unreasonable conditions. Had Diane sought court intervention earlier in the process instead of doing nothing, she may have walked away with something, even if only through settlement. Instead, her inactivity caused her to lose out on her inheritance. If you are thinking about imposing conditions on a gift, make sure to reach out to a qualified Trusts and Estate Practitioner for help in crafting the provisions in a way that will withstand judicial scrutiny. Likewise, if you are a beneficiary receiving a gift subject to a condition, make sure that you abide by that condition.

In the days preceding and following the Super Bowl, Taylor Swift seemed to be everywhere. I read numerous articles ranging in topic from her love life to conspiracy theories to her societal influence and back again. As I read, it occurred to me that blogs must exist about Taylor Swift and Estate Planning. Several authors have written on the interrelationship of those topics and it’s easy to see why. Arguably, 2023 was the year of Taylor Swift’s “Wildest Dreams.” Time magazine named her Person of the Year, she headlined the highest-grossing, billion-dollar, worldwide tour which nearly broke Ticketmaster, and began a high-profile romance with now three-time Super Bowl champion Kansas City Chiefs tight end, Travis Kelce. Call me “Enchanted.”

Naturally, I wanted something relevant for Estate Planning and decided that regardless of whether we have “Bad Blood” toward Taylor Swift, it’s hard to deny her “Style” or impact on the “Cruel Summer” that was 2023. Let’s review the empire that she has built that involves not only her earnings from record deals and concert ticket sales but also lucrative endorsement deals, merchandising, and significant real estate holdings. Turns out that Taylor Swift knows “All Too Well” what she wants and understands how to get it. She’s a savvy businesswoman.

When her first recording label sold her recordings to a well-known manager, Taylor Swift spoke against the sale and began re-recording and re-releasing songs titled “Taylor’s Version” followed by the original song title. If this sounds like an easy way to expand her music catalog, it’s much more than that. It’s an “Invisible String” to ensure that anytime an individual downloads or plays the “Taylor’s version” of the song, she herself, rather than the company that purchased her recordings, receives the royalties from the song. Not only has Taylor found a way to control royalties from her early work, but she’s also found a way to prevent others from using her likeness and phrases by trademarking them. Taylor Swift prevents their use with anything other than her products and services. She has even trademarked her name! This “Fearless” business strategy allows her to control her image and career and protect both.

Taylor has extensive real estate holdings in several states, including California, New York, Tennessee, and Rhode Island. These properties have a value exceeding $150 million. She owns these properties through a trust demonstrating that she has enlisted the help of appropriate advisors to help fill in any “Blank Space.” Finally, Taylor has increased her intrinsic value by associating herself only with brands that she uses herself. In 2022 FTX offered her a $100 million sponsorship deal and she walked away, perhaps thinking to herself “We Are Never Ever Getting Back Together.” Shortly thereafter, several other celebrities initiated a class action lawsuit against the company. Clearly, Taylor saved herself from becoming involved in the lawsuit or associated with the company in any way.

As this article demonstrates, Estate Planning lessons (and opportunities) surround us. Estate Planning matters not just to prevent things from going wrong, but also serves to ensure that they go right. The lessons that this article explores remind us as Trusts and Estates practitioners not only to use reliable methods to achieve desired results, but also to think creatively when problems arise. When her first recording company sold her recordings, Taylor could have had “Bad Blood” or thought “Is it Over Now?” Instead, she found a way to “Shake it Off” and reclaim her music. Likewise, she employs multiple means of protecting her empire, as should anyone who wants to leave a legacy. If you have questions about your Estate Plan or want to discuss your legacy, “You Need to Calm Down” and reach out to me and we can discuss how best to support your intended wishes with best outcomes.