EDITOR’S NOTE: THIS IS THE FIRST IN A SERIES ABOUT PROTECTING YOUR FAMILY’S ASSETS IN THE WAKE OF NEW RULINGS FROM THE TENNESSEE COURTS.
October 26, 2018
Special to www.stopprobatefraud.com
NEW RULES FOR FRAUD:
A decision from the Tennessee State Court of Appeals creates big changes in what Tennesseans can expect from the legal and financial professionals (called fiduciaries) they hire in the Volunteer state.
A “fiduciary,” according to www.Law.com is “ …a person or business who has the power and obligation to act for another (often called the beneficiary) under circumstances which require total trust, good faith and honesty.”
In most states, bankers, insurance agents, stock brokers and Realtors are examples of “fiduciaries.”
Judges, attorneys and police are sworn to uphold the law, and are considered “officers of the court.”
SMALL CASE. BIG CHANGES
Tennessee’s new rules come from a simple accounting case that started in the court of Williamson County Clerk and Master Elaine Beeler, and was later heard by Williamson County Judge James Martin III.
THE CRUX OF THE MATTER:
The case was about the accountings for the estate of Woody Darken. Woody Darken was a retired businessman living in Leiper’s Fork. His first wife, and the mother of their two children, had died from cancer. Woody later remarried.
Darken represented one of three generations of his family that used the firm of Lassiter, Tidwell, Davis, Keller and Hogan for estate planning. (The firm now is named Farmer, Purcell, Lassiter and White, the business home of Nashville mayor Bill Purcell).
When Darken died, his sons Brett Darken and Eric Darken, were trustees and beneficiaries of his estate. They also were clients of the firm.
The Trustees asked for their father’s legal and financial records which were held by the firm. The firm said it would give the trustees their father’s records.
But the firm subsequently changed its tune and refused to deliver the records to the trustees.
Court records detail that the executrix of the estate, referred to as “Miss Cherry Lane,” teamed with firm hide the legal and financial records of their father, and force the Trustees into a legal battle—with their family’s firm—for access to their father’s files.
The fight took more than two and a half years, but the Trustees prevailed. Judge Timothy Easter forced the firm and the executrix to deliver the hidden accountings to the trustees. Judge Easter also ordered the parties to mediate the damages inflicted on the trustees by the executrix and the firm.
MORE COURT BATTLES: THE EXECUTRIX DEMANDS TRIAL:
But the firm and the executrix “refused” mediation. Instead, they forced the trustees back into Tennessee’s court system.
At trial, hours of testimony detailed a long list of events that are historically considered illegal, including accounting fraud, insurance fraud and securities fraud.
DEFINITION DRILL DOWN: WEBSTER DEFINES FRAUD AS “…DECEPTION INTENDED TO RESULT IN FINANCIAL OR PERSONAL GAIN.” FRAUD OFTEN INVOLVES FAMILY, FRIENDS AND TRUSTED PARTNERS, AND SO IS CALLED “STEALING WITH A SMILE.”
It was a legal battle that continued for more than half a decade. According to the trustee’s billing records, it was a fight that cost their family more than half a million dollars in legal fees.
A LANDMARK DECISION
In the end, Williamson County Court Judge James Martin III (shown left) ruled that when the firm and the executrix teamed up to hide legal and accounting records from the trustees and beneficiaries, it was not a breach of fiduciary duty in Tennessee.
The trustees appealed their case, but Martin’s ruling was upheld by the Middle Tennessee Court of Appeals.
“It’s a landmark decision,” said Brett Darken in an interview from his home in Virginia. Darken, 58, was the lead trustee in the case. Neither he nor his brother Eric had ever been involved in an estate accounting.
“This is a big deal for every family in Tennessee, but the court’s have spoken,” said Darken. “All we can do now is try to help people learn about how the laws in Tennessee have changed, and how they differ from every other state in America.”
The editors at www.stopprobatefraud.com contacted Mayor Bill Purcell and William Lassiter, both partners at the firm at the center of the case for comment. Neither responded.
ACTION STEP: SINCE ATTORNEYS AND FIDUCIARIES IN TENNESSEE ARE NOW ALLOWED TO HIDE YOUR FAMILY’S RECORDS, MAKE COPIES OF ALL YOUR LEGAL AND FINANCIAL FILES (SIMPLY COPY THEM TO A JUMP DRIVE EVEN PHOTOGRAPH FILES WITH YOUR CELL-PHONE) AND SHARE THEM WITH TRUSTWORTHY ALLIES.
“New Rules for Families and Finance in Tennessee” is a multi-part special report for www.stopprobatefraud.com developed to educate Tennessee Families on navigating the state’s revised legal and financial landscape. This installment is the first. Next: “Tennessee’s New Rules for Accounting Fraud.”