Equity and Trust Law

Writing Assignment #2
Zhao and John grew up as best friends, bonding over their shared ambition to someday play in the NBA. They spent endless afterschool hours practicing together and dreaming of their future glories. Zhao always spoke in quite odd phrases, and everyone was always amazed that John knew exactly what he meant no matter if no one else could.
While they had great competitive success in high school, it soon became evident that the future careers of 1.7m John and 2.1m Zhao would diverge. Both attended college at UCLA in the United States, where Zhao became a national star and John majored in Accounting and began managing Zhao’s growing commercial opportunities. Zhao was drafted and realized his dream of playing in the NBA.
After a few years as a professional, Zhao heard from his teammates that trusts were a “great way to cheat the system” and to “hack taxes.” After graduation, John had returned home to enroll in HKU’s ultra-prestigious JD program, and had recently completed his PCLL as well as taken the New York bar. He always maintained control over Zhao’s business interests, and after passing the NYC bar formally took over as Zhao’s agent.
Zhao told him he wanted to create a trust. John was excited by the prospect to use his high-level trust skills and told him he would get on it. Zhao told John “just make sure I am not being a chump and am breaking the system.” John was left with a puzzled look on his face. He transferred all of Zhao’s assets into a Cayman Island trust which he constructed perfectly to minimize Zhao’s ongoing tax liabilities.
While on a summer tour of Estonia for his new “HK Proud” basketball brand, Zhao had a near-death experience with a rampaging moose. He saw his life flash before his eyes. Once he got back home, he told John that he needed to “get his legacy together.” “How so,” asked John, to which Zhao replied “just do your lawyer thing and make sure all of our people are taken care of.” John added several clauses to the trust the reorganized the assets and beneficiaries if Zhao passed away. The three main clauses were:
Clause #1
Half of Zhao’s intellectual property was to be auctioned to set up a fund to provide scholarship for “Hong Kong kids with a shot at playing in the NBA or WNBA.” $50,000,000 HKD was to go to build an elite training fitness academy in Cyberport.
Clause #2
Eight of Zhao’s prized Kuroko no Basuke limited-edition platinum-plated figurines were for John, and the remaining to Zhao and John’s favorite high school coach. The clause stated “John and Zhao know the coach will use the proceeds to help more kids make their dreams happen.”
Clause #3
Everything left over goes to Zhao’s closest relatives, or at least enough to make sure they can live reasonably the same style as other parents of NBA stars.
Unfortunately, the following year Zhao took a private space trip into orbit that was never heard from again after an unexpected solar flare. Zhao’s parents were enraged to learn anyone but they would get Zhao’s estate.
Analyze the Relevant Facts and Case Law

Note
Responses to a provided prompt that will present a basic fact pattern that implicates the doctrines at issue.
Analysis should draw on the key cases identified in the class reading guide.
Grading will reflect the Three Core Elements of Legal Reasoning:
(1) Identification of Relevant Legal Authorities,
(2) Recognition of Legally Relevant Facts, and
(3) Differentiation of Competing Case Authorities and Factual Interpretations.