Wills, Trusts & Estates Prof Blog

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

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Sunday, October 19, 2014

Las Vegas Ready for Same-Sex Weddings

CoupleAs I have previously discussed, the 9th circuit struck down the same-sex marriage bans of Nevada and Idaho earlier this month. Leading up to the decision, Las Vegas was gearing up for same-sex weddings. The city known for high wedding volumes and large variety of wedding options, including of course an Elvis impersonator officiant, was ready to facilitate legal same-sex marriages even before the ruling. The county had already changed their marriage licenses to be gender neutral, and individual chapels made sure their photographers knew how to take to perfect wedding day photos when both members of the couple are wearing white wedding dresses.

See Kimberly Pierceall, Land of Chapels Ready for Gay Weddings, The Fresno Bee, Oct. 8, 2014.

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

October 19, 2014 in Current Affairs, Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0) | TrackBack (0)

Saturday, October 18, 2014

New Case: In re Theresa Houlahan Trust

TrustLimitations does not begin to run even though trust property consists only of a claim against the trustee. The Supreme Court of New Hampshire reversed the grant of summary judgment for a successor trustee in an action alleging that the predecessor trustee violated his fiduciary duty by transferring all of the property of Trust 1 of which he was a trustee to Trust 2 of which he was settlor and trustee. The trial court granted the successor trustee’s motion for summary judgment on the ground that the action was barred by the statute of limitations which requires actions against a trustee for breach of trust be brought within three years of the termination of the beneficiary’s interest in the trust.

In re Theresa Houlahan Trust, citing Restatement (Third) of Trusts § 2, comment i and the Reporter’s Notes, the court held that Trust 1 did not cease to exist when all of its property was transferred to Trust 2 because Trust 1 held a chose in action against the trustee. The court remanded the case for trial on the remaining issues of both fact and law.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

October 18, 2014 in Estate Planning - Generally, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (1) | TrackBack (0)

Friday, October 17, 2014

John Wayne Trademark Case Dismissed

John_WayneAs I have previously discussed, the family of movie legend John Wayne is in a trademark battle over the word “Duke.” The family's attempts to market a line of bourbon under the brand name “Duke,” have received backlash from Duke University. The family's attempt to have the trademark issue resolved in a Santa Ana, California federal district court resulted in the judge dismissing the case for lack of jurisdiction. However, the family is viewing this as just one battle in a larger fight for the rights to the name “Duke.”

See Emily Foxhall, John Wayne Family Loses Round 1 to Duke University in Trademark Fight, Los Angeles Times, Oct. 2, 2014.

October 17, 2014 in Current Affairs, Current Events, New Cases | Permalink | Comments (1) | TrackBack (0)

Attempt to Terminate Superman Rights Ends With Supreme Court Cert Denial

GAVELThe rights to superhero character Superman remain with Warner Bros. after the Supreme Court of the United States denied cert earlier this month in a case challenging their rights. The estate of Joseph Shuster, co-creator of Superman, attempted to reclaim their rights to the character. The decision from the 9th Circuit found that a 1992 contractual agreement blocked the estate's attempt to terminate Warner's rights. The agreement was between Shuster's sister, Jean Peavy, and Warner, and gave the rights to Warner in exchange for payment that covered Shuster's debts and expenses shortly after his death.

See Eriq Gardner, Supreme Court Denies Review of Superman Rights, The Hollywood Reporter, Oct. 6, 2014.

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

October 17, 2014 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0) | TrackBack (0)

Trustee Ratifying Invalid Action Not Enough

AntiA co-trustee cannot ratify an action by the other co-trustee that violates terms of the trust. Beneficiary was co-trustee of a trust with a corporate co-trustee and the trust terms required that no trustee who was also a beneficiary may exercise any powers of the trustees for his or her own direct or indirect benefit, and whenever “participating in income or principal of a beneficiary who is also a trustee is being considered” decisions must be made solely by the corporate co-trustee. The individual co-trustee entered into a 1031 like-kind exchange with himself. The corporate co-trustee ratified the transaction. Another beneficiary brought an action alleging that the individual co-trustee had violated his fiduciary duties by engaging in the 1031 exchange. After a bench trial, the court found that the co-trustee had not violated his fiduciary duty.

In re Estate of Foiles, on appeal, the Colorado intermediate appellate court reversed and remanded, holding that in the absence of a trust term allowing a co-trustee to ratify otherwise invalid actions of a trustee, ratification can come only from all of the beneficiaries.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

October 17, 2014 in Estate Planning - Generally, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, October 16, 2014

New Case: McCarthy v. Taylor

TrustRequirement that amendments to trust be “in writing” does not require formal execution. Shortly before his death, the settlor/trustee of a revocable trust delivered to his attorney a copy of the executed trust agreement with certain provisions crossed out and substitute provisions he hand wrote above the strike outs. In a contest between an original beneficiary and the person benefited by the handwritten modifications, the trial court found with the aid of extrinsic evidence that the amendment provisions of the trust required only that they be in writing and that the modifications were valid amendments.

In McCarthy v. Taylor, the intermediate Illinois appellate court affirmed, holding that as a matter of law the requirement that an amendment be “in writing” does not require that the writing be a “formal legal document,” be signed, or explicitly state that it is an amendment of the trust.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

October 16, 2014 in Estate Planning - Generally, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 15, 2014

Florida Breach of Trust Case

TrustA recent ruling by a Florida Appeals Court has recognized a breach of trust in a case that involved a trustee ignoring the settlor's written instructions on trust administration that were given before her death. Even though trust formalities were not followed when Lola Kritchman wrote a letter to her co-trustees instructing them to pay for the final two year's of college for Hunter Wolk, the grandson of her first cousin, the court found that the trustees decision to discontinue tuition payments after Kritchman's death was not good faith or prudent trust administration.

In Kritchman v. Wolk, the court held that the failure to follow Kritchman's instructions constituted a breach of trust and that the tuition payments should have been made.

See Jeffrey Skatoff, Trustee of Revocable Trust Sued for Failure to Follow Written Instructions, Clark Skatoff, Oct. 2, 2014.

October 15, 2014 in Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)

New Case: In re Estate of Qualls

Gavel2Gifts violated terms of power of attorney requiring the agent to respect terms of the principal’s will in making gifts.  A power of attorney granted the agent, who was one of three beneficiaries of principal’s will, the authority to make gifts including to the agent but required that any gifts respect the terms of principal’s will.  The agent sold the principal’s home and deposited the proceeds in a payable on death account of which the agent and one of the two other will beneficiaries were the beneficiaries.  After the principal’s death, the third beneficiary of the will began a proceeding to have the sale proceeds returned to the estate.  The beneficiary prevailed and the Missouri intermediate appellate court affirmed, finding that the opening of the payable on death account was the making of a gift even though the principal was the owner of the account and that opening the account exceeded the agent’s authority because doing so dramatically decreased the interest of the third beneficiary of the principal’s will. In re Estate of Qualls, 436 S.W.3d 743 (Mo. Ct. App. 2014).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

October 15, 2014 in Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 14, 2014

Mississippi Court Rules on No Contest Clause

WillAction brought with probable cause and in good faith did not violate no contest clause. In a case of first impression, the Mississippi Supreme Court held that a no contest clause in a will requiring forfeiture by a beneficiary who contests the admission of the will to probate cannot be enforced against a beneficiary who brings a contest in good faith and with probable cause, even though the clause itself includes language purporting to make it applicable whether or not the beneficiary acts in good faith with probable cause. Parker v. Benoist, No. 2012–CA–02010–SCT, 2014 WL 4243763 (Miss. Aug. 28, 2014).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

October 14, 2014 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Monday, October 13, 2014

Court Ruling Prompts Move to Shield IRAs

IRA 2

In June, the United States Supreme Court ruled that an inherited IRA is no longer a retirement account and is not protected from creditors under federal bankruptcy law.  Consequently, financial advisers and families are taking steps to shield IRA assets for children and other beneficiaries in case those heirs ever find themselves in bankruptcy proceedings. 

Advisers are urging clients to create a trust as the IRA’s beneficiary, or establish an IRA as a trust account while the owner is still alive.  “The prudent thing to do, if you’re concerned about the child’s or other beneficiary’s potential creditors, is not to leave the IRA outright to the child.” 

The challenge that then arises is identifying and employing the proper trust.  The type of trust to use depends on “how many beneficiaries, the tax goals, asset-protection goals, as well as many other variables.”

The Supreme Court did not specifically address surviving spouses who inherit an IRA, thus, their status remains uncertain.  Financial advisors recommend that spouses roll over an inherited IRA into one under their own name.

See Robert Powell, Court Ruling Sparks Rush to Shield IRAs, Wall Street Journal, Oct. 12, 2014. 

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

October 13, 2014 in Estate Planning - Generally, New Cases, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)