Within a couple weeks of oral arguments, we received a published opinion in the General Perry terror clause case that has been discussed in this blog before (really fast opinion). To read the case, click here.
The result was not favorable to my client, but nonetheless appears to provide planners with the result advocated by our appeal – that is, there is no “safe harbor” tool with which to contest a terror clause.
To review, Beneficiary filed Motion to Determine Probable Cause. Trial Court found no probable cause to contest the Trust, but refused to find that the act of bringing the motion was itself an attack on the Trust so as to invoke the terror clause penalty.
The Court of Appeals said that the trial court never should have accepted the motion to determine probable cause because it did not meet the jurisdictional requirements for the relief requested. Because that issue was not raised at the trial level it was not preserved on appeal. But the COA said that in this case the motion itself does not violate the terms of the terror clause of this trust. Where that leaves us is – in our case the Beneficiary who brought the motion gets to keep his share of the trust – BUT in the future anyone who brings this type of motion should expect to have the motion dismissed without a hearing. So the result is there is no safe harbor way to challenge a terror clause – but that doesn’t help my client.
The case is published – so it matters. I had intended to seek leave to the Supreme Court if the Court of Appeals decision was not favorable. But in light of the ruling, I think such an effort may not be warranted. I thank Phil Harter (f.k.a. Judge Harter) of our office for his review and conclusions about the opinion. Finally it should be noted that opposing counsel on this case, Doug Mielock, (a.k.a. my archnemisis) did an excellent job as usual – just hate losing to him.
Plan to be 100 