Transact Compliance & Communication Center . Letter-Size Brochure, Webviewable Print-Friendly, Created 07.09.04 Tjr: Fill & Download for Free

As you say, you’ll need to consult your own lawyer. I’ll throw in a few thoughts because it allows me to share some points that I think are of general interest, but I am not your lawyer and I’m not giving specific legal advice to you.Trustees dealing with beneficiaries pose a host of issues and there are numerous ways to go wrong. Therefore, there are usually compliance issues and they tend to be costly, even if it all goes smoothly. So a trustee should think twice — maybe more like a dozen times — before engaging in a transaction with a beneficiary.If a trustee is going to deal with a beneficiary, that beneficiary darned well better be represented by fully independent counsel who appropriately reviews the transaction and signs off on it. IMPORTANT POINT: this attorney will charge for this service.Okay, let’s assume the beneficiary gets an independent counsel who enthusiastically signs off on the deal. Done, right? No. I would most likely tell my client that they’d be an idiot if they didn’t get the transaction reviewed and approved by the probate court in advance. IMPORTANT POINT 2: both the trustee’s and beneficiary’s attorneys will charge for this service. IMPORTANT POINT NUMBER 3: even with everyone signing off, there may be reasons why the court won’t approve. I recently had a case where exactly this situation happened. All beneficiaries and trustees, represented by independent counsel, agreed on a transfer of assets, but the Court refused to grant permission. The Court independently concluded the transaction was not in the best interest of the beneficiary and was contrary to the testamentary intent. IMPORTANT POINT 4: Yes, everybody had to pay for the attorneys and the filing fees, etc. even though the exercise proved unsuccessful.Once again, I’m just giving a set of thoughts about issues to consider. Consult your attorney in confidence to secure real legal advice.

8:00 am: “Good morning, Smithers. Exciting day in store for us! You know we're acquiring Acme Widgets. Well, we just decided to change it from an asset purchase to a stock purchase. Please check that we are in compliance with all federal securities requirements and all relevant states.”10:30 am: “Smithers, the tax partner says we can't go with a stock purchase. Stop the securities research. Check all the key third-party contracts and see what notices we need to give of the acquisition.”Noon: “No lunch for you, Smithers. The other side’s tax lawyer and ours just talked. Back to a stock sale. Get that securities work done.”3:00 pm: “Here's a list of liens we found on assets of the target company. Check and see if they are cleared in accordance with applicable law.”7:00 pm: “We’re ordering pizza in. Late night. That securities research? We need to restructure the transaction to use a holding company, dropping down into three LLCs, a C corporation, and a framizzstat. You'll need to rewrite all the agreements. Plus they found some more liens …”

Edge CasesNon-coders who write specifications are generally good about what’s meant to happen when everything goes right…… and typically surprised at how much of the coding effort is actually about checking what should be done when something goes wrong.I’m going to over-simplify, but consider a simple example - someone at an ATM wanting to take out $20.Non-programmers tend to think that it should work something like:Check balanceIssue notesPost the transaction (reduce the balance)Programmers ask about things like “what if there’s a power cut”, and run through some scenarios, like:Check balance is sufficientIssue notes[Power cut comes here, so the customer gets free money.]OK, goes the non-programmer, what about reversing the order, only to find that doesn’t work either once it’s been thought through:Check balance is sufficientDebit balance[Power cut comes here, so the customer has their balance reduced but never gets their cash.]Programmers are used to thinking about how to make this all work fail-safe.But “coping with failure” isn’t the only example of an edge case.A simple one of these might be a website that shows a graph of the customer’s balance over time. What if the customer has an active account, but never paid money in? Should the graph display blank, or should it not display? That’s a design edge case.Or what about some code that calculates an average? What should it do when the set of things it’s trying to average is empty?Another example might be “what if a customer has $10 in their account, but an agreed overdraft facility of $250… the $20 will take them into that overdraft… do we have to advise them of this and any fees before we issue the cash?”… and before we know it, lawyers and compliance people get involved.Lawyers are another profession who tend to be good at thinking about edge cases.Compliance people tend ONLY to think about edge cases :-) But they don’t normally exist outside of highly regulated industries.