Mary Goodblood grew up believing that she was Cash Goodblood’s only daughter. Twenty-five years after he died, her dad’s brother Uncle Trusty sold the Goodblood family business for a tidy sum. After report of the lucrative sale was plastered on the front page of the local newspaper, Mary received a Facebook message from a stranger Désirée saying “Hi, I think your Dad is also my Dad. Do you want to exchange DNA?” In talking to her Uncle Trusty Mary learned that Désirée’s mom, Candy Onenight, had a brief relationship with Cash long before Cash and Mary’s mom got married. When Uncle Trusty, the trustee of Cash’s trust that specifically names Mary and nowhere mentions Désirée, is presented with Désirée’s claim for a share of Cash’s estate, what should Uncle Trusty do?Continue Reading “Hi, I Think Your Dad is Also My Dad”: Illegitimate Heirs – Fiduciaries
Co-author Emily Morris*
Last month Tilting blogged about Peter LoDuca, Steven A. Schwartz and their New York law firm who New York Federal Judge Kevin Castel chastised for submitting non-existent judicial opinions with fake quotes and citations created by the artificial intelligence tool ChatGPT. Worse yet, they continued to stand by the fake opinions after Judge Castel challenged their brief. Though LoDuca and Schwartz claimed they were “unaware of the possibility that [ChatGPT’s] content could be false,” Judge P. Kevin Castel ordered them to appear earlier this month to evaluate whether sanctions were warranted.Continue Reading Lawyers and ChatGPT — Averting a Possible Disaster
Following the untimely death last year of his father Big Daddy Bux due to COVID-19, brother Hustler Bux was appointed independent executor of Big Daddy’s Will. When Hustler asked for a judicial discharge, sister Kathy “Kitten” – who had cared for both parents and still lived in the family home – objected complaining that Hustler failed to disclose important facts related to the estate. Kitten’s mistrust was intensified by altercations between them at the family home, and then confirmed by Hustler’s late inventory and accounting revealing his uneven distribution of Big Daddy’s $5 million estate. Without telling Kitten, Hustler (i) deeded the family home to Kitten and deducted his determination of its value from her share, (ii) deeded a ranch in Goliad to himself and their two brothers – but not her, (iii) reserved $150,000 of estate funds to cover his attorneys’ fees to defend any lawsuit. Kitten asked for explanations. Hustler refused. Even worse, Hustler intimated that, by just asking for the estate information, Kitten violated the will’s “no-contest” clause. Can Hustler refuse to tell Kitten about Big Daddy’s estate and his assets? What’s a “no-contest clause?” What is a judicial discharge?
Continue Reading Can Executors Keep Secrets From Beneficiaries?
Ernest “Big Daddy” Bux’s great Auntie Heidi Loper moved to a retirement community when her husband Sam retired years go. A short time later, Sam died. Over the years Heidi’s handyman Don Meetdirts and his wife Ada befriended Heidi. They persuaded her to leave them millions of dollars in cash and other items. Prior Wills would have left Heidi’s property to her family of whom she was very proud – both of the Bux family name and of the assets she and Sam had acquired. When the Wills were changed, Heidi had failing eyesight, deteriorating health and a delicate mental condition. When Big Daddy and the Bux family learned at Auntie Loper’s death that the Meetdirts were the only beneficiaries under the last Will, they asked their favorite attorney if they have a claim of undue influence to deny the Meetdirts any inheritance. Do they?
Continue Reading Grandma Left the Money to Whom? Legal Options for Undue Influence and Changing of Wills
Last month, Jim Duncey, the majority owner and face of Duncey’s Caps, Inc., was involved in a car accident and arrested for DWI. Facing a PR crisis Duncey’s board of directors called an emergency meeting. The board implemented its crisis plan, issued a statement condemning driving while intoxicated, suspended Duncey, ordered him to attend rehabilitation, and made a $100,000 donation to MADD.
While the company survived the initial PR crisis, its bottom line did not. Retail sales during the following quarter were down 20%. One of the company’s major commercial customers also terminated its contract that produced $3 million in revenue annually. To make matters worse, the board’s private investigator discovered that Duncey had previously been arrested for DWI three years earlier while on vacation in another state, but had managed to keep it quiet. Does the company have any legal remedies against Duncey on top of terminating him? Should the company seek those remedies?
Continue Reading The Calm After the PR Storm: Recovering Damages from the Offender
After reluctantly shuttering her family owned Widgets-R-Us last month due to insufficient profits to pay even the secured debt, Susie Sears is now dealing with disbelieving unsecured creditors. What should she do?
Continue Reading Your Shuttered Business: Bankrupt It, Dissolve It or Walk Away?
Seeing the bottom line awash with red ink yet again, Susie Sears reluctantly decided to shut down her family-owned Widgets-R-Us. Pressured by thinning margins, a weakening labor pool and increasing competition from foreign markets, Widgets-R-Us is leveraged to the hilt and profits are insufficient to pay even her secured debt. With no viable assets or business, there’s nothing to mortgage or to sell. How can Susie and her fellow company officers walk away without becoming personally liable?
Continue Reading Closing up Shop: Your Company and You
Board of directors member Y.I. Gnough, who is also president of Algae Company, is in a pickle. Although denying any knowledge of sexual harassment and misconduct by the company founder and deal-maker Iam Algae, three co-board members resigned fearing for their reputational and financial survival. Employees are fueling the rumors of women who complained of unwanted touching, sexual harassment and other over-the-line behavior. Even Algae’s former counsel discloses that several years ago the board and the company were told of three or four confidential settlements with women. Company investors suggest that Y.I. and fellow officers and directors breached their fiduciary duty. Should Y.I. be concerned about his pocketbook and his reputation?
Continue Reading Am I My Director’s Keeper?
A number of years ago John Drane, owner of Drane Plumbing & Supply, executed a Power of Attorney (POA) naming his eldest daughter LaTrina Drane as his attorney in fact. John’s debilitating stroke last weekend risks placing him in rehabilitation for months. Determined to continue the family business that offers its customers “Let Us Drain Your Swamp,” LaTrina dusts off John’s POA. Will Latrina have any problems?
Continue Reading Returning “Power” to the Power of Attorney
Ima Knowitall, owner of All My Business Ideas (AMBI), just read the Wall Street Journal article on new Department of Labor (DOL) regulations and called her financial advisor, Phillip Coffers. Mindful of last fall’s Tilting the Scales post that suggested she might owe her employees a fiduciary duty as the trustee of AMBI’s 401(k), Ima…