Tuesday, October 30, 2018

Nemo dat quod non habet

Everyone has heard the quip about weddings and funerals, something to the effect that they both bring people together and afford an opportunity to reconnect. There is another less popular adage about funerals in particular; and that is the unspoken attention to the Will of the deceased, more specifically what if anything one will inherit. In the broad delineation of estate administration the over-riding consideration is captured in the maxim, "Nemo dat quod non habet" - that is, "No one gives what he does not have".

The issue of what one has to give is particularly apt when the person about whom you are speaking is dead. The complication arises from an examination of what the deceased may or may not have done or intended to do prior to his or her death about their stuff. The scrutiny becomes especially serpentine when the apparent conduct of the deceased is subject to debate of interpretation. When confronted with seemingly insurmountable dilemmas - distortions which in particular arise from an instinctive violation of what is just or fair - the courts have imposed manufactured theories which rise above the technical impediments.  Those formulas of invention are sometimes given the laudable title of equity - implying impartiality, rightness and integrity.  Strictly speaking the driving force is purely constructive - that is, useful, practical and encouraging.

Obviously the deceased is unable to speak for himself.  He therefore relies upon his trustee - quite simply the person to whom he has entrusted the management of his affairs.  In the context of the estate of a deceased person, that trustee is normally called an executor (though the proper appellation includes both "executor and estate trustee" which captures the more expansive duties of both administrator and guardian). It is at this initial stage that the trustee faces his first hurdle - namely, that every power of the trustee is only as strong as that of the person (the deceased) who gave it to him in the beginning. The capacity of the trustee depends upon the capacity of the deceased.  It is for this reason that the scope of the Will is limited to the scope of the deceased; or, more poignantly, the trustee can only dispose of what the deceased had himself to dispose of.  This axiomatic observation is not as simple as one might imagine. While there are some easily understood qualifications - for example, that jointly owned assets do not form part of the estate of the deceased but rather flow "by operation of law" (not the Will) to the surviving joint owner(s) - this standard rule can be overtaken by an interpretation that the joint ownership was ultimately for the benefit of the deceased only, who therefore continues to hold sole beneficial interest in the asset even after death.  Such an interpretation defeats the survivorship feature of joint ownership and reinforces the legitimacy of the Will (and therefore the executor) to administer the asset.  This can become an uncomfortable conclusion if the joint survivor is not the same person as the beneficiary named in the Will.

This potentially thorny result arises from a dispute about what was intended in the first instance.  That is, did the deceased intend to gift outright ownership to the joint survivor ("inter vivos" - between living persons); or did the deceased intend merely to enable the joint survivor to manage a distribution in line with his Will ("testamentary" bequest). The latter interpretation (testamentary) draws upon the view that a trustee (the person to whom management has been given) is normally considered separate and apart from the beneficial owners. If therefore it is interpreted that the original intent of the deceased was to impose a trust upon the person to whom the management has been given (by deed) or bequeathed (by Will), then the question arises, "What are the terms of that trust?"

It is customarily understood that a Will - in order to have any validity - must be in writing. Therefore it is not normally too difficult to read the Will to ascertain to whom the assets of the deceased are to be given.  Less common is the creation of an express trust governing the terms upon which a gift is given between living persons.  In fact the creation of inter vivos trusts even by lawyers is relatively esoteric.  Trusts can involve arcane language and extraordinary expense which together have little appeal either to general practitioners or their clients. Some people flatter themselves to think they can accomplish the advantage of a trustee relationship without having to cement the terms of the trust in writing - hoping merely that the trustee will "do the right thing". What constitutes the "right thing" after a death seldom includes any others beyond the original trustee unless there is written specificity. It is all too appealing for the trustee to rise above the quandary of interpretation by ignoring it all together, preferring instead to rely upon the strict evidence without the nicety of having to consider the equitable interest of others.

I am tempted here to trot out another principle of law that, "You cannot do indirectly what you cannot do directly", which is to say that no amount of legal finagling or interpretation will defeat what is essentially irresponsible (the application of law contrary to common sense). To say "The law is a ass" is wrong.

"If the law supposes that", said Mr. Bumble, squeezing his hat emphatically in both hands, "the law is a ass - a idiot.  If that's the eye of the law, the law is a bachelor; and the worst I wish the law is, that his eye may be opened by experience - by experience."

"Oliver Twist" by Charles Dickens (1838)

My purpose in engaging in this dissertation is to remind myself that I adored the practice of law.  Parenthetically I recently had occasion to discuss an estate matter with a close friend.  The contemporaneous obligation to throw myself into a family estate administration has evoked a consideration of these and many related details. I am now thankfully far enough removed from the immediacy and weight of these brain-teasers that I do not have to afford them anything more than intellectual amusement. In a small way it reminds me that law is a developing model and one whose doors are never closed. In a strange way - on the current national and international political scene - it is similarly consistent with the improving posture of the likes of Beto O'Rourke compared to the diminishing propaganda of Donald J. Trump. Everything connects.

Meanwhile the more relevant collateral of my dance with mortality is not its legal complexities but rather the recollection that my late mother would always have wished only the best for her family (admittedly sometimes to an excessively singular degree).  The utmost I can do for her is to enjoy my life. Certainly it is not hard to do so under present circumstances - beautiful sunny and warm weather, the benefit of pleasant bicycle rides and swimming and sun bathing, nutritious meals of fresh fruit, fish and vegetables, the community of kind and pleasant people. My inbred talent for immediacy triumphs over even the most prospective animation. Here I have no trouble living in the present. Each day I rejoice in our fortuity.

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