Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Friday, November 21, 2014

Deed of Trust Trumped IRS Lien

GavelAfter Restivo Auto Body Inc. filed for bankruptcy, a disagreement between Susquehanna Bank and the IRS began over which had a priority interest over the other. The bank had an executed deed of trust as of January 4, 2005 and recorded security interest as of February 11, 2005. In the interim time between the two actions by the bank, the IRS filed a federal tax lien on January 10, 2005. The bank was granted priority in both bankruptcy and district court and the IRS appealed.

In In re: Restivo Auto Body, Inc., the 4th Circuit held that while under Maryland statute the bank did not have priority because they recorded second, under Maryland common law the bank qualified as a bona fide purchaser and thus the bank's deed of trust had priority over the IRS's lien.

See, In re: Restivo Auto Body, Inc.: 4th Circuit Rules Executed but Unrecorded Security Interest Has Priority Over IRS Tax Lien, McGuireWoods, Nov. 17, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.


November 21, 2014 in New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, November 20, 2014

Griffin Industries Fiduciary Duty Case Going to Trial in May

Gavel2As I have previously discussed, a family feud over inheritance between the Griffin Industry heirs has four sisters pitted against three brothers. The sisters brought suit accusing their brothers of misappropriating their inheritance by transferring property the sisters were owed to the family company controlled by the brothers. Last week, a Federal district judge denied the brother's request that the September summary judgment ruling that found they breached their fiduciary duty to their sisters be reconsidered. A trial date has been set for May 5, 2015 and is scheduled to last four weeks. The brothers will present their affirmative defenses at the May trial.

See Andy Brownfield, Trial Set For Griffin Industries Family Legal Battle, Cincinnati Business Courier, Nov. 17, 2014.

November 20, 2014 in Estate Administration, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 19, 2014

IRS Announcement 2014-32 Clarifies New IRA Rollover Rule

IRAA recently released IRS announcement clarifies how the decision in Bobrow v. Commissioner, T.C. Memo. 2014-21 will be applied. Announcement 2014-32 explains that only one IRA rollover can be made tax-free each year, and that limitation applies to all IRA accounts held by the Taxpayer in the aggregate. The announcement also states that the new rule will not be applied until January 1, 2015.

See Jeffrey S Ashendorf, IRS Protection Against Upcoming Change in Rollover Rules, Ford Harrison, Nov. 11, 2014.

November 19, 2014 in Estate Planning - Generally, New Cases, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 18, 2014

Poster Company Sues Family of Betty Boop Creator

Betty BoopAfter the death of Betty Boop creator Max Fleischer, his family created Fleischer Studios and has brought multiple lawsuits for copyright and trademark infringement regarding use of the character. One target of the litigation is Nevada company AVELA who restores vintage Betty Boop posters and licenses the rights to them to third parties. After successfully defending the infringement claims in the 9th circuit and a Federal district court, AVELA has brought suit against Fleischer Studios and the two law firms that assisted Fleischer in their litigation. AVELA describes the litigation tactics by the family as harassment and extortion, and claims that the Betty Boop litigation is knowingly without merit.

See Elizabeth Warmerdam, Fight Over Betty Boop Gets Fierce, Courthouse News Service, Nov. 17, 2014.

November 18, 2014 in Estate Administration, New Cases | Permalink | Comments (0) | TrackBack (0)

Trust Accounting Limited to Statutory Laches Period

Trust1Doris Corya appealed the order of a Florida trial court to complete accountings on four trusts that she was trustee of for all years that she had failed to do so. Corya had been trustee for all four trusts since their creation and had not provided the beneficiary with any reports.

In Corya v. Sanders, a Florida Appeals court reversed the lower court holding that the trustee could only be held liable for the missing reports for the length of time that Florida's statutory laches would apply, in this case four years. Thus, Corya will only have to go back through records and report accountings on the four trust for the past four years and not all trust years, which could have gone back as far as 61 years when the first of the four trusts was created.

See Charles Rubin, Laches as a Limit on the Duty of a Trustee to Account, Rubin on Tax, Nov. 13, 2014.

November 18, 2014 in Estate Planning - Generally, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Parents Sue Adoption Center That Solicited While on Probation

Family3After adopting their child from The Adoption Center of Choice, Charlesly and Charlotte Josephs were called by the center and asked if they would adopt a second child. The center told them the child was a sibling of the child they had adopted. The Josephs paid the center $37,900 in adoption fees, traveled to Utah where the center is based, and waited. But after nine days they were not able to take their newly adopted child home, but were told the mother had changed her mind. The Josephs not only have not been able to get their fees paid back, but also found out that the adoption center was on probationary license due to noncompliance with state adoption rules, which required the center to inform their clients of their status. The Josephs have filed a breach of contract claim in Bernalillo County Court to get a refund for their adoption fees paid and punitive damages.

See Victoria Prieskop, Adoption Turns Ito Expensive Fiasco, Courthouse News Service, Nov. 17, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

November 18, 2014 in Estate Planning - Generally, New Cases | Permalink | Comments (0) | TrackBack (0)

Monday, November 17, 2014

New York Attorney Sues for Nazi-Looted Painting

Two Riders on the BeachAs I have previously discussed, a German task force has been sifting through the art collection of the late Cornelius Gurlitt to determine which pieces are the result of Nazi looting. One painting has been determined to have been looted from David Friedmann, and his great-nephew, David Toren, wants it back. Toren, a 89-year-old New York attorney, brought suit against Germany and Bavaria under an exception in the Foreign Sovereign Immunity Act in May. According to Toren, the process is moving very slowly and will likely take years to resolve.

Toren says even though he hasn't seen the painting since 1938 prior to fleeing Germany, the painting means a lot to him as a reminder of his family.  The Bern Art Museum, which was named the beneficiary of the art in Gurlitt's will, has not yet decided whether to except the collection. Toren has been informed by the museum that if the painting is accepted it will be returned, but then it must be decided if Toren or one of three other heirs will receive it.

See Susanne Lenz-Gleissner, David Toren: 'Why Wait So Long?', DW, Nov. 10, 2014.

November 17, 2014 in Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Woman Accuses Ex-Husband's Widow of Stealing Sons' Inheritance

Gavel2Debra Karlstein, the ex-wife of late Manhattan trial attorney Harry Goldsmith, has brought a lawsuit against his widow, Deborah Lee. Karlstein claims that Lee carried out a scheme that involved a death bed marriage and immediately amended will, and resulted in a $1.5 million reduction in the inheritance of Karlstein and Goldsmith's three sons.  Karlstein is also claiming that her ex-husband struggled with many addictions and party-boy habits,  including drugs, pills, and prostitutes. Lee's representation made a statement lamenting the accusations against Goldsmith's character and describing him as a dedicated attorney.

See Shawn Cohen & Julia Marsh, New Gal 'Stole' Kids $1.5M Inheritance: Ex, New York Post, Nov. 10, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

November 17, 2014 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Surviving Spouse More Than a Living Spouse Says Wisconsin

GavelIn a recent Wisconsin case, a defendant insurance company sought to dismiss a wrongful death action brought by the children of the deceased. The children's mother and estranged wife of the decedent was found to not be able to recover due to the length of time and facts surrounding her separation from the deceased. The defendant's argued that since Wisconsin's wrongful death statute only allows for recovery by children if there is no surviving spouse, the children could not recover. The children's case was dismissed by the circuit court for Waukesha County, and the children appealed.

In Force v. American Family Mutual Insurance Company, the Supreme Court of Wisconsin held that the children could recover. The court reasoned that this result was necessary to fulfill the legislature's intended purpose for the statute. Additionally, the court found that the estranged spouse was not a "surviving spouse" for purposes of the statute as the meaning of "surviving spouse" is not simply a spouse who is living. A dissenting opinion in the case questioned how this opinion will affect future intestate succession cases.

Special thanks to Joseph J. Welcenbach (Welcenbach Law Offices, S.C.) for bringing this case to my attention.

November 17, 2014 in Intestate Succession, New Cases | Permalink | Comments (0) | TrackBack (0)

Friday, November 14, 2014

Pennsylvania Court Removes Alter Ego Trustee

GavelVincent J. Fumo created an inter vivos irrevocable trust with his daughter Allison Fumo as beneficiary. Vincent was then sentenced to prison for mail fraud and took out a loan for over a million dollars from the Fumo Family Limited Partnership, which Allison's trust had an ownership interest in. Vincent defaulted on the loan and is currently serving his prison term. After Allison's trust was without a trustee for a little over a year and a close friend of her father's was appointed the successor trustee, Allison successfully brought a claim to have Anthony Repici removed as trustee. Vincent appealed the decision.

In In Re Fumo Irrevocable Children’s Trust, the Pennsylvania Superior Court affirmed the removal of the successor trustee and the finding that Repici was an alter ego of Allison's father. The court reasoned that the facts supported the conclusion that the appointment of Repici was an attempt by Vincent to maintain control of the trust for his own benefit and not for Allison's.

See, Court Removes Substitute Trustee of Irrevocable Trust as the Court Deems Substitute Trustee is an Alter Ego of Grantor, Philadelphia Business Law & Estate Planning Blog, Nov. 10, 2014.


November 14, 2014 in New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)