Court Opinion

ID: 9699308
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:19:01.321439+00
Date Added: 2024-06-11T12:39:29.785601
License: Public Domain

Justice HOE NS,
concurring in part and dissenting in part.
I write separately to concur in part and to dissent in part from the decision announced by the majority of the Court. I concur in the analysis of the meaning and the limitations of N.J.R.E. 701, the result of which is to exclude as inadmissible all of Hill’s opinion testimony on which both the trial court and the Appellate Division majority relied. I dissent, however, from the majority’s opinion to the extent that it concludes that the result reached by the trial judge, and affirmed by the majority of the appellate panel, can be sustained once that inadmissible opinion testimony has been excised.
Although correctly rejecting Hill’s opinion testimony, my colleagues nonetheless conclude that there is “ample” admissible *288evidence, largely from Hill, to sustain Richards’ burden of proof with respect to the doctrine of probable intent. In concluding that there is sufficient credible evidence to support the trial judge’s conclusion that Johnson intended to include surviving spouses as beneficiaries of this particular trust, the majority overlooks the inescapable fact that Hill’s trial testimony was overwhelmingly comprised of statements that amount to nothing more than his opinion. Both the questions posed to Hill by counsel, and Hill’s answers, were couched carefully in words that conveyed Hill’s “impression,” “belief,” and “understanding” about Johnson. In doing so, however, Hill simply offered one opinion after another.
For me, the problem remains that when this voluminous trial record is stripped of all of the inadmissible opinion testimony, there are but three facts on which the trial judge, and the appellate majority, could have relied. The first, which in actuality is not a fact but a series of facts, is the overall plan evidenced in the various wills and trusts Johnson executed over time for the benefit of his family. The second fact is the comment Johnson made to Hill about the widow left without means to support her child when her spouse died. The last fact is Johnson’s expressed concern for the protection of his family from the “vicissitudes of life.”
I consider the first of these to be the most telling evidence about what Johnson himself actually intended. The majority is only partly correct in stating that “the trusts created between 1939 and 1963 devised a comprehensive plan aimed at benefiting his heirs and their spouses.” Ante at 286, 944 A.2d at 595. In reality, as the record makes abundantly apparent, Johnson’s several trusts had different aims; as time went on, the goals he told Hill and others he intended to achieve changed. Particularly as it relates to the later trusts, including the 1961 trust, Johnson was largely motivated by considerations only indirectly relevant to providing for his children.
His intentions are obvious from an examination of how the different groups of trusts evolved. The earliest ones were de*289signed specifically to provide for his children and their spouses. Thus, the 1939 trusts, created for the benefit of his children born of his marriage to his first wife, and the 1944 trusts, created for the benefit of his six children, all included references to the particular children. These early trusts also specifically included inheritance rights for the spouses of those children, should those spouses survive the Johnson children. The intention of these trusts, without any doubt, was the creation of financial security for each child, along with protecting the spouse and children of each of them. In these trusts, the intention to provide for the surviving spouses of his children was expressed and it was accomplished in part through the grant of a power of appointment by which Johnson’s children could, effectively, pass the trust assets to a surviving spouse.
In fact, consistent with the terms of her 1944 trust, Mary Lea designated her surviving spouse, Richards, as the principal beneficiary of that trust upon her death. By doing so, she largely excluded her children, all of whom were grandchildren of Johnson and none of whom were children of Richards. Regardless of what Johnson might have thought of that outcome, by vesting his daughter Mary Lea with a right of appointment, he allowed her to direct that the majority of the corpus of that trust, in essence, provide for her surviving spouse, even to the exclusion of Johnson’s own family members.
The record demonstrates that by the time Johnson created the 1961 trust, his overall estate plan strategy, as described by Hill, had changed. Johnson recognized that he had already provided directly for all of his children through the previously-created trust instruments. At the same time, he had amply created vehicles for the protection of their spouses and, to a lesser extent, consistent with the right of appointment, for their children. The primary goal to be accomplished by the creation of the 1961 trust, however, had nothing to do with providing for his children or their spouses, but instead related to the preservation of control of the Johnson & *290Johnson Company (“the Company”), limiting payment of taxes and the protection of his grandchildren.
According to Hill, Johnson had long expressed his significant concerns about taxes and specifically considered the tax implications of much of what he did. He had two tax-related concerns that bore upon his creation of the 1961 trust in particular. First, he feared that the death of any family member would make it necessary for that family member’s heirs to sell shares of the Company to generate the cash needed to pay estate and inheritance taxes. He repeatedly sought ways to reduce that likelihood because he wanted, above all else, to avoid dissipation of the family’s control of the Company. Second, he was concerned that if there were a distribution from one of the trusts to one of his children and if that child wanted to share that distribution with a spouse, the distribution from child to spouse would require the payment of gift taxes. Both of these concerns are evident in the provisions of the 1961 trust.
By 1961, Hill had learned about a then-novel estate planning device through which a trust could be devoted to charitable purposes, which, when coupled with the use of a generation-skipping device, would reap significant tax advantages both to Johnson and to his grandchildren. It was these purposes, according to Hill’s admissible factual testimony, that led to the creation of the 1961 trust. In doing so, however, Johnson was required to, and did, devote the 1961 trust to charitable purposes for thirty-five years. The trust, after that thirty-five year period of time, includes a period of years during which the trustees have discretion to make distributions to children, spouses, and grandchildren. When the trust terminates, however, neither Johnson’s children (should any of them still survive) nor their spouses, are named as residuary beneficiaries. In fact, only Johnson’s grandchildren and their issue fall within the class of permitted residuary beneficiaries.
These unrebutted facts support conclusions that are plain from the language of the 1961 trust, and are all consistent with John*291son’s expressed (as opposed to probable) intent. First, by creating the charitable lead period, Johnson enabled himself to take advantage of the then-possible lifetime income tax exemption available to individuals who gave ninety percent of all of their ordinary income for a period of years to charity. Second, by permitting distributions to spouses of children following the charitable lead period, Johnson accomplished his expressed goal of reducing or eliminating the potential gift tax impact on a then-living child who might choose to share a permissible distribution with a then-living spouse. Third, by including his grandchildren as both permissible beneficiaries during the period of years and as the only residuary beneficiaries (to the exclusion of any of his own children who might be surviving), he effectively passed significant assets on to the succeeding generation.
Notwithstanding the use of the word “spouses” as it relates to Johnson’s children’s rights in the 1961 trust, the plain intent of this part of his estate plan was the generation beyond his children. The suggestion that in this particular trust he intended that a surviving spouse of one of his children, already well provided for through the use of the 1944 trust, would reap a benefit to the detriment of his grandchildren is simply without any support.
Nor, in my view, can it fairly be said that Hill’s two other factual bases for his now inadmissible opinion about Johnson’s intent support the findings of the trial court. The vignette about Johnson’s concern for the widow and his expressed worry about life’s vicissitudes reveal only that Johnson had a concern for his own children and grandchildren. These facts tell us little about any continuing concern Johnson had for his children’s surviving spouses in 1961 who had all been provided for through the 1944 trusts. Moreover, these two factual tidbits tell us nothing at all when viewed in light of the very specifically expressed objectives Johnson sought to achieve in creating the 1961 trust.
Like the majority, I would ordinarily announce the appropriate legal test relating to the inadmissibility of Hill’s proffered opinion testimony and remand to the trial court for its re-evaluation of the *292record. I would ordinarily do so even though the trial judge has retired in the interim. The unfortunate passing of the principal witness Hill, however, leads me to agree with the majority that a remand is not feasible in these unique circumstances.
However, in the final analysis there is so little left of Hill’s testimony, once his inadmissible opinions are put aside, and the overwhelming evidence that remains supports only the conclusion that Johnson did not intend that the surviving spouse of his child Mary Lea would be included in the class of permissible beneficiaries during the discretionary period under the 1961 trust. I, therefore, would reverse the judgment of the Appellate Division and remand with directions to the trial court to enter judgment in favor of the appellants.
Justice RIVERA-SOTO joins in this opinion.
For affirmance—Chief Justice RABNER, and Justices LONG, LaVECCHIA, ALBIN and WALLACE—5.
For concurrence in part, dissent in part—Justices RIVERA-SOTO and HOENS—2.