The first three minutes of the latest episode of The Simpsons, “Flaming Moe“, introduced a slew of interesting estate planning themes. Spoiler alert: I reveal here these three minutes of the plot, which is then relegated to barely an afterthought for the remainder of the episode.
C. Montgomery Burns, 104, owner of the Springfield Nuclear Power Plant, is in his office with “Blue Haired Lawyer” (hereinafter “BHL”). Loyal assistant Waylon Smithers bursts in just in time to see Burns signing his will. BHL also attempts to have Burns quickly initial portions of the will before his “half hour per day where you’re mentally competent” expires.
Later, Smithers is devastated to discover that Burns has not named him as a beneficiary. Instead, Burns has left his fortune (recently estimated at $1.3 billion by Forbes) “in equal shares to the Yale University Department of Applied Evil; Gary, from Gary’s Trapdoor Installation and Repair; and finally, my faithful and constant companion…”, who turns out to be Burns’ pet tortoise, Sheldon.
Let us briefly discuss several matters that come to mind:
Is the Will Valid?
It is unclear how many witnesses are required for executing a will in this case since the show has never revealed Springfield’s state, but all U.S. states require at least two. Here, BHL and Smithers appeared in the room at the same time that Burns signed and technically witnessed it, but this is problematic for reasons stated below.
The will’s validity could also be in question due to Burns’ incompetency. Very few medical professionals would likely testify that sanity can be turned on and off like a light switch, especially after a thirty-minute period.
Should BHL be a Witness?
According to this analysis of the Model Rules of Professional Conduct (adapted in most states), lawyers have been disqualified from representing their clients’ estates where there is a strong likelihood that they would need to be called as a material witness in the proceedings.
Here, as Burns’ longtime attorney, BHL has an intimate understanding of Burns’ business ventures and personal activities, as well as the endless issues inherent in the private ownership of a facility subject to Nuclear Regulatory Commission oversight. He must certainly foresee the possibility of having to serve as a material witness after Burns’ death when the court determines ownership of the power plant. By witnessing Burns’ signature, BHL risks disqualification from representing Burns’ estate, and is therefore probably not serving in Burns’ best interests.
Parenthetically, BHL’s oversight of this subtlety underlies the importance of using a lawyer specializing in estate planning rather than one who merely dabbles in it.
Can Smithers Challenge the Will?
Smithers would not likely challenge the validity of the will based on any of the above, since he could then be viewed as an interested witness and most likely have his share invalidated anyway, as he is not related to Burns.
Instead, Smithers could try to make a claim against the estate based on detrimental reliance. In other words, despite the will, Smithers could recover if Burns ever promised him a portion of his estate in exchange for the extraordinary services Smithers has provided him through the years. In essence, the court would view Burns as having breached the agreement and his estate would owe Smithers further consideration.
Can Sheldon Be a Direct Beneficiary?
In the United States, animals cannot own property, so they cannot be given anything directly by will. However, most states now have laws that permit the deceased to leave money in trust for the care of their beloved pets.
However, Burns direct gift of over $400 million (less taxes) to his tortoise may create concerns about BHL’s competence, and possibly Burns’ mental state as well.
Is the Use of a Will an Appropriate Choice?
Given the large stack of pages in the will, BHL’s choice to use one here certainly raises eyebrows because it implies that Burns may be holding the plant and his significant assets in his own name. This would subject the estate to approximately $450 million in federal estate taxes alone (under 2011 and 2012 rules).
With the availability of numerous planning and asset protection tools such as irrevocable and offshore trusts, limited partnerships, and estate freezing techniques, the tax bill could be reduced by hundreds of millions of dollars. A revocable trust would also keep any dispersal of these assets (except perhaps the power plant) private.
One wonders if the late, great Lionel Hutz would have performed any differently.
- TV Review: The Simpsons “Flaming Moe” (blogcritics.org)
- ACTEC Commentaries on the Model Rules of Professional Conduct (www.actec.org)
- The Forbes Fictional 15 (www.forbes.com)