“Inside the Judicial Mind,” 86 Cornell L. Rev. 777 (2001); Mandel, G.,
“Patently Non-Obvious: Empirical Demonstration that the Hindsight
Bias Renders Patent Decisions Irrational,” 67 Ohio St. L.J. 1391 (2002);
Holzl, Kirchler, and Rodler, “Hindsight Bias in Economic Expectations:
I Knew All Along What I Want to Hear,” J. of App. Psych., Vol. 87, pp.
437-443 (June 2002); Wendel, P. “The Evolution of the Law of Trustee’s
Powers and Third Party Liability for Participating in a Breach of Trust:
an Economic Analysis,” 35 Seton Hall L. Rev. 971 (2005); Guthrie,
Rachlinski, and Wistrich, “Blinking on the Bench: How Judges Decide
Cases,” 93 Cornell L. Rev. 1 (2007); Schanzenbach, M., and R. Sitkoff,
“Did Reform of Prudent Trust Investment Law Change Trust Portfolio
Allocation?,” 50 J. Law & Econ. 681, 684 (2007) (hindsight bias can skew
the evaluation of trustee investments).
2Fischhoff, B. “Hindsight does not equal foresight: The effect of outcome knowledge on judgment under uncertainty,” J. of Experimental
Psychol.: Hum. Perception and Performance, 1( 3), 288-99 (1975); see
also Fischhoff, B., “An Early History of Hindsight Research,” Social
Cognition, Vol. 25, pp. 1-13 (Feb. 2007).
3See, generally, C. Heath & D. Heath, Made to Stick: Why Some Ideas
Survive and Others Die, 1, 19 (Random House 2007).
4Hastie, R., and W. Viscusi, “What Juries Can’t Do Well: The Jury’s
Performance as a Risk Manager,” 40 Ariz. L. Rev. 901, 915 (1999)
(“hindsight effects have been documented in almost every domain of
everyday and professional judgment”).
5Guthrie, Rachlinski, and Wistrich, supra, note 1 at 803, 818.
6See, e.g., Wears, Robert and Christopher Nemeth, “Replacing Hindsight With Insight: Toward a Better Understanding of Diagnostic
Failures,” Ann. Emerg. Med., Vol. 49, pp. 206-209 (2007); Szmukler,
George, “Homicide inquiries: causality and the pervasive influence of
hindsight,” The Psychiatrist, Vol. 24, pp. 6-10 (2000).
7Johnson, Roy B., “The Hindsight Bias and the Evaluation of Strategic
Performance,” Mountain Plains J. Bus. & Econ., Vol. 11, pp. 1-11, at 7
8Trustees typically have a duty to invest “as a prudent investor would,
in light of the purposes, terms, distribution requirements, and other
circumstances of the trust.” American Law Institute Restatement of the
Law, Trusts, § 90 (2007).
9Stark v. U.S. Trust Company, 445 F. Supp. 670, 678 (S.D.N. Y. 1978).
10Merrill Lynch Trust Company v. Campbell, C.A. 1803-VCN, V.C. Noble
(Del. Ch. Sept. 2, 2009; Memo Op.).
11In re Chamberlain’s Estate, 156 A. 42, 43 (N.J. Prerog. 1931).
12First Alabama Bank v. Martin, 425 So.2d 415 (Ala. 1982), as modified
on rehearing Jan. 14, 1983, cert. denied, 461 U.S. 938 (1983).
13Id. at 428.
14Growney v. Central Pacific Bank, Circuit Court No. 1CC09-1-001374
(2009) (CPB paid $69.26 per share for AIG stock in March of 2008 and
sold it for $2.17 per share six months later; it eventually bottomed out
at about 35 cents per share in March of 2009).
15See Daysog, Rick, “Campbell heir blaming CPB for losses,” Honolulu
Advertiser, June 25, 2009, at B5 (including quotes from the complaint:
“CPB—either purposely or through gross neglect—neglected to take
any action to end the hemorrhaging in a number of the worst performing stocks, despite long and deep declines”).
16See, generally, Zlatos, Bill, “Lawsuit filed for $168.1M over McCune
Foundation losses labeled ‘absurd,’” Pittsburgh Tribune Review, Aug.
1, 2009 (“You put 20/20 hindsight into the hands of law enforcement
officials, and that’s a very powerful, if not dangerous, tool.”).
17Newton, E., Overconfidence in the Communication of Intent: Heard
and Unheard Melodies. Unpublished doctoral dissertation (Stanford,
CA: Stanford University, 1990).
18Examples of the songs used in the study include the “Happy Birthday”
song and the Star Spangled Banner.
19See Heath, Chip, and Dan Heath, Made to Stick: Why Some Ideas
Survive and Others Die, 1, 19 (Random House 2007). See also Kiviat,
Barbara, “Change Agents: Are You Sticky,” Time, Oct. 29, 2006 (“When
you hear a tune in your head, it’s tough to put yourself in the position
of a person who doesn’t”).
20See Smith, Abbe, Case of a Lifetime: A Criminal Defense Lawyer’s Story
21In re Rowe, 712 N. Y.S.2d 662 (App. Div. 2000), appeal denied, 749
N.E.2d 206 (N. Y. 2001).
22Id. at 665.
23In Re Dumont, 791 N. Y.S.2d 868 (2004), rev’d in part, 809 N. Y.S.2d
360 (App. Div. 2006), appeal denied, 813 N. Y.S.2d 689 (App. Div. 2006),
appeal denied, 855 N.E.2d 1167 (2006).
24Hoffman, Aaron, A Survey of Potential Pitfalls for Estate Planners,
manuscript on file with the author.
25In re Galloway, 2007 WL 5125298 (Minn. Dist. Ct.) at 51.
26Id. at 58.
27After 34 trial days and testimony from 12 expert witnesses, the court
issued a 176-page opinion in favor of U.S. Bank. The couple’s lawyer
had already settled for an undisclosed amount.
28Jeanes v. Bank of America, 40 Kan. App. 2d 281 (Kan. Ct. App. 2008).
29Nevin v. Union Trust Co., 726 A2d 694 (Me. 1999).
30Id. at 699.
31Merrick v. Mercantile Safe Deposit & Trust Co., 855 F.2d 1095 (4th
32Id. at 1101.
33See, e.g., Nenno, “Planning With Domestic Asset-Protection Trusts:
Part I,” 40 Real Prop. Prob. & Tr. J. 263, at 284 (Summer 2005) (“
Attorneys might face exposure if they do not advise the client to [engage
in asset protection planning] and creditors later reach the client’s
assets.”); Rubin and Goldberg, “Consider the Implications,” Trusts &
Estates, 44-48 at p. 48 (Nov. 2005) (“Perhaps, once upon a time a well-designed estate plan did not need to involve deliberate consideration
of the asset protection implications to the client. That time has long
passed.”); Mata, “Piercing of Spendthrift Trusts, Family Limited Partnerships, and Other Threats to Estate Planning Structures,” ABA RPTE
e-Report, July 1, 2008 (failure to advise a wealthy or at-risk client of
asset-protection possibilities may constitute malpractice if the client’s
assets are needlessly exposed to a subsequent judgment or other legal
claim); Rothschild and Rubin, “Asset-Protection Planning: Ethical? Legal? Obligatory?,” Trusts & Estates at 42 (Sept. 2003) (it is only a matter
of time before clients make claims against estate planners who did not
raise the subject of asset protection planning as part of the planning
process—when it arguably would have worked); Mata, ALI-ABA Asset Protection Planning Update—2005, p. 250 (“failure to so advise a
wealthy or at risk client may constitute malpractice if the client’s assets
are needlessly exposed to a subsequent judgment or other legal claim”).
34Schoenblum, Jeffrey, “Governing Law Clauses for Trusts,” 44 U. Miami
Heckerling Est. Plan. Inst. Ch. 14 at 14-47 (2010) (“the law is uncertain
as to whether an attorney has a duty to take such laws into account”);
Nenno, Richard W., “The Trust from HELL: Can it be Moved to a
Celestial Jurisdiction?,” Prob. & Prop. 60, 64 (May/June 2008).
35Cornman v. Eastern Counties Railway Co., 157 Eng. Rep. 1050, 1052
(Exch. 1859), quoted in J. Rachlinski, “A Positive Psychological Theory
of Judging in Hindsight,” 65 U. Chi. L. Rev. 571, 572 (1998).
36See, e.g., Landsman, Stephan, “The Risk of Risk Management,” 78
Fordham L. Rev. 2315 (2010).
About thE Author
Randall W. Roth teaches trusts and estates, federal
taxation, and professional responsibility at the University of
Hawaii. He is an academic fellow of the American College
of Trust and Estate Counsel and associate reporter for the
American Law Institute’s Restatement of the Law (Third),
Trusts. With senior federal district court judge Samuel P. King,
he wrote a bestselling book about the fabled Bishop Estate,
Broken Trust, which the Hawaii Book Publishers Association
named Book of the Year. Professor Roth can be reached at