Wills, Trusts & Estates Prof Blog

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

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Monday, May 25, 2015

Court Refuses To Recognize Tortious Interference With Inheritance In New Jersey

New Jersey District CourtA Federal District Court has ruled that Tortious Interference with an inheritance is not a cause of action in New Jersey. The case concerned three siblings who claimed that the guardian of their mother removed items and money from the estate prior to her passing.

In McDonald v. Copperthwaitethe district court stated that nothing in New Jersey law, beyond discussions in dicta of a few cases, authorizes this tort. As a result, any remedies that are being sought must be done through the probate courts in accordance with established law. However, a suit that is brought using the wrong cause will still be subject to the strict statute of limitations for probate court. There has been no indication if an appeal is in the works.

See Paul W. Norris, Tortious Interference with Inheritance, National Law Review, May 15, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

May 25, 2015 in Estate Administration, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Friday, May 22, 2015

Federal Judge Reasserts Same Sex Marriage Right In Alabama

Gay Pride FlagThe battle in Alabama for same sex marriage took a new turn recently. A federal judge reiterated her earlier ruling that the same sex marriage ban was unconstitutional and ordered all probate courts, which had been told not to recognize the marriages by state officials, to ignore Alabama's ban. However, the judge placed a stay on the order until the United States Supreme Court rules on the matter which essentially allows the ban to continue for now. Still, gay rights groups claimed victory after this ruling though the Alabama Supreme remains stiffly opposed to the decision.

See Kim Chandler, Judge: Gay Couples Across Alabama Have Right To Marry, W.I.A.T., May 21, 2015.

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

May 22, 2015 in Current Affairs, Current Events, New Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 20, 2015

Spendthrift Trust Provision Hold Off Bankruptcy Trustee

GavelWhen Faith Campbell created a living trust she made sure to include a spendthrift provision assuming that it would protect her money from any creditors of the beneficiaries. But after her death, a beneficiary went into bankruptcy and the bankruptcy court ruled that the trust had terminated upon completion of probate and the share of the beneficiary was available to the trustee.

In Safanda v. Castellano, the U.S. District Court ruled that the trust was protected under section 541(c)(2) which prevents a trust interest from being included in a bankruptcy estate. The court rejected the argument that "estate settled" in the trust meant the completion of the probate estate instead giving it a broader reading and protecting the assets in the process.

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

May 20, 2015 in New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 19, 2015

Supreme Court Finds 401(k) Administrators Have Ongoing Duty To Monitor Older Investments

IRA    Contributors to a 401(k) plan provided by Edison International to its employees brought the company to court claiming that the plan manager had an ongoing duty to monitor older investments in the portfolio. The United States Supreme Court recently heard oral arguments to uphold or strike down the 9th Circuit Cort of Appeals' ruling that the suit was barred by statute of limitations.

    In Tibble v. Edison Internationalthe United States Supreme Court overturned the 9th Circuit ruling that the limitations period does not start to run the day the investment was made and that plan administrators have an ongoing duty to keep investments up to date based on market conditions. Essentially, this new ruling imposes the trust based prudent investor rule on 401(k) management and has the chance to drastically change plan management going forward according to some financial experts.

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

May 19, 2015 in Current Affairs, New Cases | Permalink | Comments (0) | TrackBack (0)

Saturday, May 16, 2015

Slayer Statutes, A Rarely Used But Useful Tool

GavelThe concept of a family member killing a relative for a bumped up inheritance is the fodder of pulp dramas but, sadly, does occur in the real world. In a recent New York case, a women stabbed her mother in law to death in order to get a $4 million life insurance policy. Thankfully, she was apprehended then convicted and the court imposed, in addition to her sentence, that she take nothing from the estate. In this case, a New York common law doctrine was used but many states have statutes on point with the universal theme being that the wrongdoer shall not profit from a crime even if the legal procedure used to deny the gain varies. While it is unfortunate that society requires these laws, it is to our advantage that we see them propagated and used in any case necessary.

See David H. Lenok, Slayer Statutes In The Spotlight, Wealth Management, May 13, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

May 16, 2015 in Current Affairs, Current Events, New Cases | Permalink | Comments (0) | TrackBack (0)

Friday, May 8, 2015

Investment Firm Ordered to Pay $1.6 Million to Elderly Couple

Gavel2Signator Investors, a subsidiary of John Hancock Financial Network, has been ordered to pay an elderly couple and their mother's estate $1.6 million. The financial arbitration panel found that the broker in charge of their accounts breached his fiduciary duty and committed fraud by selling-away their investments. The broker invested in securities outside of the company that he had a management interest in.

See Wolters Kluwer Law & Business, Elderly Couple Awarded $1.2M Plus Attorneys Fees over Failed Investments, Resourcefullaw.com, 2015.

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

May 8, 2015 in Estate Planning - Generally, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Thursday, May 7, 2015

Attorney Fees Challenge Required Formal Notice

Gavel2A recent Florida appeals case addressed the issue of a probate court's personal jurisdiction over individuals. The case involved an action for surcharge that challenged the amount of  fees paid to the personal representative and attorney. The probate court found the fees excessive and ordered the fees to be disgorged.

In Simmons v. Estate of Baranowitz, et al., a Florida appeals court reversed the order and found that the probate court did not have personal jurisdiction over the attorney because formal notice on the personal representative's counsel was required.

See Jordan Hammer, Formal Notice Required to Review Attorney Compensation, Clark Skatoff, May 6, 2015.

May 7, 2015 in Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0) | TrackBack (0)

Trust Retains GST Tax-Exempt Status After Conversion

GavelIn IRS Letter Ruling 201516028, an irrevocable trust that was grandfathered into tax-exempt status for the generation-skipping transfer (GST) tax, was ruled to have retained that status after it was converted from an income-only trust to a total return unitrust. The conversion was made pursuant to state law. The compliance with state statutes also avoided income and gift tax consequences for the switch.

See Wolters Kluwer Law & Business, GST-Exempt Status Not Altered by Conversion, Resourcefullaw.com, 2015.

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

May 7, 2015 in Estate Planning - Generally, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Saturday, May 2, 2015

Removal of Executor Upheld by Court

Gavel2The San Antonio Court of Appeals recently considered a challenge to the probate court’s removal of an independent executor in Estate of Montemayor.  The probate court removed the executor after finding that, after three years, he had not effectively pursued resolution of the estate.  The sole asset of the estate was a house in which the executor had moved into and told one of the beneficiaries that “he was going to keep [it].”  He also changed the locks on the gate leading to the house and failed to pay the estate any rent for living there. 

The court concluded that such conduct supported the probate court’s finding that the executor had a conflict of interest amounting to gross misconduct and mismanagement of the estate.  The executor breached his fiduciary duty to protect the beneficiaries’ interest, allowing his own interests to override his obligations to the beneficiaries. 

See J. Michael Young, Court of Appeals Upholds Removal of Executor, Texas Probate Litigation, Apr. 29, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

May 2, 2015 in Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0) | TrackBack (0)

Builder Wins Inheritance Over Family's Challenge

GavelAs I have previously discussed, Ronald Butcher's will left £500,000 to Danny Sharp who provided the service of cleaning out Butcher's gutters free of charge, which led to a six year friendship according to Sharp. Butcher's family  challenged the will that was signed two months prior to Butcher's death. The judge ruled in favor of Sharp yesterday finding that the will is valid.

See Paul Cheston, Builder Who Cleaned Pensioner's Gutters For Free Wins £500k Legal Battle Over Inheritance, Standard, May 1, 2015.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

May 2, 2015 in Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)