A legal battle developing in Milwaukee over the wishes of philanthropist Kurtis Froedtert ought to remind donors everywhere to be very careful in how their wills are phrased.
There’s a legal battle developing over the wishes of donor Kurtis Froedtert, as reported by Bruce Vielmetti in the Milwaukee Journal Sentinel
Froedtert made his fortune malting barley for the city’s many breweries. In 1951 he left $8 million to the city of Milwaukee to build the Froedtert Hospital which is now part of a five-hospital chain. He then left $500,000 in a trust for his daughter, Mazie Froedtert, born in 1928. Mazie Froedtert received $10,000 a year when her annual payment was increased to $20,000. She’s gotten $20,000 a year from the trust ever since, as the trust’s assets have risen to $40 million.
Mazie Froedtert Willms is now 91, and she has several questions about the trust. Why hasn’t her annual payment risen? Adjusted for inflation, she should be getting $160,000 a year, and if she annually got the four percent of the trust’s assets that she received in 1951 she’d be getting $1.6 million annually. She is also bothered that administrators are getting more money from her trust than she is. She says that administrators received $200,000 from her trust last year when she only got her $20,000.
“Nearly 70 years after his death, my father would not have wanted so much of his money going to trustees and lawyers and investment advisers,” Mazie Froedtert Willms
But the clause of the trust she objects to the most is one that says that the Froedtert Hospital Trust will receive the assets of her trust upon her death. She’d prefer that the money go to the Froedtert Hospital Foundation or to the Greater Milwaukee Foundation to support other causes she says her father wanted, including “physically disabled children, orphans, college scholarships and research into food medicine and chemistry.”
I don’t have a copy of Kurtis Froedtert’s will, but apparently the will says unambiguously that Mazie Froedtert Willms was to receive $20,000 a year.
A second dispute is about dispersing some of the Froedtert estate to other charitable activities besides the hospital. Apparently, the will states that it was Kurtis Froedtert’s “hope” that after the hospital was built any funds left over would be used for other charitable causes. At issue here is whether “hope” here is what lawyers call “precatory language.”
Trusts and estates lawyers are careful to distinguish between “mandatory” and “precatory” terms in a will. I found this brief, prepared by the law firm of West Palm Beach, Florida lawyer David Garten, helpful in explaining the difference.
If you say in your will, “I direct” or “it is my desire” then your wishes have to be followed. But other words are ambiguous, and, for donors, ambiguity is not your friend.
In Haltom v. Austin National Bank, a 1972 case, Texas courts dealt with the will of Wayland E. Adams. Adams wrote that after his death, his wife should be able to live in the family home for the remainder of her life. Then, after her death, “if it had not been necessary to dispose of it would like our home at 2815 San Gabriel, Austin, Texas to be given to the Texas Fine Arts Association for a small museum.”
The courts ruled that the phrase “would like” was not “the choice word and measured phrases of a cultivated gentleman” but was precatory. The Texas Fine Arts Association did not get Wayland Adams’s house.
Milwaukee County Circuit Judge Paul Van Grunsven says he will rule in December about whether Mazie Froedtert Willms has standing to sue the Froedtert Hospital Trust and whether the clause expressing Kurtis Froedtert’s “hope” about how his fortune would be used was precatory and therefore invalid.
We will see how Judge Van Grunsven rules. But the case reminds donors to be very careful in how their wills are phrased, making sure that any potentially precatory language is eliminated before the will is signed.