Wills, Trusts & Estates Prof Blog

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

Friday, December 2, 2016

What Happens When Your Husband Hides His $400 Million Fortune?

Hiding moneySarah Pursglove decided to take a deeper look into her husband’s finances when the Finnish entrepreneur left her. Robert Oesterlund swore in court that his fortune only totaled a few million dollars, but Pursglove could think of several family purchases that cost above and beyond that amount. She flew to the Bahamas to figure out what her husband was really worth. There she found an accounting statement that claimed Oesterlund was worth at least $300 million. As she packed her bags for the flight back home, her family’s fortune immediately began disappearing into various shell companies, bank accounts, and trusts under a worldwide financial system catering to the ultra rich. The system effectively offshores wealth and makes the richest people appear to own very little.

Over the next two years, Pursglove would rely on her wealth squad to untangle the defenses of the offshore financial world. It all started when Oesterlund created his businesses and was subsequently looking to avoid costly taxes. Eventually, he set up a Cook trust, suggested by his corporate counsel, who assured him he would be “untouchable.” As Pursglove’s lawyers began to figure out the scheme her husband was surmounting, they filed court documents for a divorce and to impose a sweeping asset injunction, which would prohibit Oesterlund from selling, merging, or borrowing against any of his assets and additional offshoring. The corporate fraud lawsuit proceeded in Florida, where the family’s companies were being run. It was eventually discovered that Oesterlund was using a Bahamas-based company to transfer all his assets and avoid all United States tax liability—a tactic referred to as “transfer pricing.” Pursglove’s attorneys claimed that Oesterlund began to shield assets from his wife as the divorce loomed near. Shortly after a judge ruled that Pursglove could see thousands of her husband’s documents, both sides’ lawyers met and discussed the possibility of Oesterlund going on the run if he had to fork the documents over. Consequently, this brought things to a head. Oesterlund would have to expose himself or threaten his fortune. Oesterlund’s one-time allies were now becoming his enemies to avoid fighting the greater good—the system. The wall of secrecy around Oesterlund’s accounts began to crumble. The case still remains open and the outcome is unknown, but it begs the question: is there justice in wealth battling wealth?

See Nicholas Confessore, How to Hide $400 Million, N.Y. Times, November 30, 2016.

December 2, 2016 in Current Events, Estate Administration, Estate Planning - Generally, Income Tax, New Cases, Professional Responsibility, Trusts | Permalink | Comments (0)

Monday, November 21, 2016

Summary Judgment Overturned in Lack of Testamentary Capacity Contest

Overturn summary judgmentAt the trial court level, in Estate of Koontz, the court granted summary judgment against a will contestant’s claims of undue influence and lack of testamentary capacity. The court of appeals reversed the summary judgment and reviewed the contestant’s affidavit, which noted the decedent’s bi-polar depression, prolonged episodes of paranoid and delusional behavior, and his behaviors over an affair and piece of property he owned. Subsequently, the court found that the affidavit contained “more than a scintilla” of evidence to prove the decedent’s lack of testamentary capacity. The court ultimately concluded that the contestant had provided enough evidence for the lack of testamentary capacity claim to withstand summary judgment.

See J. Michael Young, Estate of Koontz: Another Summary Judgment Overturned, Texas Probate Litigation, November 17, 2016.

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

November 21, 2016 in Current Events, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Thursday, November 17, 2016

Treasure-Hunter's Trust Documents Might Be in Deep Water

Attorney client privilege2An Ohio federal judge has recognized that he might make a lawyer hand over trust documents that he created for an ex-fugitive, who avoided paying expedition’s financiers after retrieving gold from a ship. The judge notes that the crime-fraud exception to the attorney-client privilege may force the trust documents to be turned over. The ex-fugitive originally had his lawyer set up an offshore trust where he has stashed some of the bounty. Whether the documents are privileged as a threshold matters seems to be an issue of first impression.

 See Samson Habte, Treasure-Hunter’s Lawyer May Have to Reveal Trust Docs, 32 Law. Man. Prof. Conduct 662, November 3, 2016.

Special thanks to Karen E. Boxx (Professor of Law, University of Washington School of Law) for bringing this article to my attention.  

Download Trust atty client privilege

November 17, 2016 in Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Saturday, November 5, 2016

Redstone Sues Former Ex-Girlfriends

Sumner and gfSumner Redstone is now suing two of his former girlfriends to retrieve the millions of dollars he spent on them, claiming the women committed elder abuse. Redstone is seeking more than $150 million in damages from the two women. His lawyers claim that the women emotionally abused Redstone to get lavish gifts from him. The lawsuit is contradictory stating that Redstone’s physical and mental capacity were impaired to the point he could be easily manipulated by the women, but his mental competency was the exact reason Philippe Dauman lost his job. The Redstone legal saga continues.

 See Edvard Pettersson, Sumner Redstone Sues Two Ex-Girlfriends on Elder Abuse Claims, Bloomberg, October 25, 2016.

Special thanks to Jim Hartnett (Attorney, Dallas, Texas) for bringing this article to my attention.  

November 5, 2016 in Current Events, Elder Law, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Tuesday, October 25, 2016

Denver Veterans' Hospital Switches Bodies for Cremation

Veteran mix upThe Sandoval family was horrified when they learned their loved one’s body was missing. The family sent his remains to the mortuary, but another man’s remains were sent back to them for cremation. In fact, his remains were misplaced for five days, leaving his family with unanswered questions. Eventually, the family learned that the remains were mixed up after the hospital alerted the mortuary. The family has been in touch with an attorney who is helping them file a claim.  

See Family Upset After Bodies Switched at Denver Veterans’ Hospital, AOL News, October 21, 2016. 

 

October 25, 2016 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Monday, October 24, 2016

A Brownstone's Bitter Inheritance Battle

BrownstoneBill Cornwell and Tom Doyle lived together as committed partners in a brownstone for over five decades. For most of their relationship, gay marriage was illegal, not allowing them to affirm their relationship. Two years ago, Mr. Cornwell died, bequeathing the valuable brownstone to Mr. Doyle, which is now in dispute. Mr. Cornwell’s nieces and nephews have ignored the bequest and claimed it as their inheritance, putting the brownstone up for sale at $7 million. 

Mr. Cornwell’s will was only witnessed by one person, which makes the will legally invalid because of the need for two witnesses. Without a valid will, the law requires that Mr. Cornwell’s assets pass to his next of kin—his nieces and nephews. Mr. Doyle’s argument is that the two of them were involved in a common law marriage, even though New York does not recognize this arrangement. This legal battle has left Mr. Doyle confused over those he once considered extended family.  

See Sarah Maslin Nir, A Brownstone and the Bitter Fight to Inherit It, NY Times, October 23, 2016. 

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

 

October 24, 2016 in Current Events, Estate Planning - Generally, Intestate Succession, New Cases, Wills | Permalink | Comments (0)

Saturday, October 22, 2016

Challenging Mental Capacity in Marriage

Capacity to marry A common scenario in estate litigation involves a common law widow seeking a share of an estate. Circumstantially, Texas recognizes common law marriage, and it is effectively the same as a formal marriage. In Estate of Matthews III, a court of appeals ruled that a decedent did not have sufficient mental capacity to marry when he married his caregiver only ten weeks before passing away. When evidence proving mental capacity is conflicting, oftentimes, the court will find that the decedent lacked the mental capacity. 

See J. Michael Young, Estate of Matthews: Successful Challenge to Marriage, Texas Probate Litigation, October 18, 2016. 

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

 

October 22, 2016 in Estate Planning - Generally, New Cases | Permalink | Comments (0)

Thursday, October 20, 2016

Forum Non Conveniens Doctrine in Probate Litigation

Forum non conveniansThe forum non conveniens doctrine allows courts to defer jurisdiction when justice and convenience principles favor the action in another forum, further requiring a three-step analysis. In Shu v. Wang, a Taiwanese billionaire died intestate with three separate families. These families were litigating against each other over the distribution of his assets. Normally, an adequate alternative forum exists when the defendant is amenable to process in another jurisdiction and there is a cause of action that provides the plaintiff with a satisfactory redress. Ultimately, the court held that the plaintiffs could obtain a satisfactory remedy in Taiwan because two of the defendants lived there and the other consented to its jurisdiction. 

See Jeffrey Skatoff, Forum Non Conveniens in Federal Probate Litigation, Florida Probate Lawyers, October 18, 2016. 

 

October 20, 2016 in Estate Planning - Generally, Intestate Succession, New Cases | Permalink | Comments (0)

Wednesday, October 19, 2016

Electronically Stored Information Inspected for Evidence in Will Contest

EsiRecently, during discovery in a will contest, a New York Surrogate court forced the drafting attorney of a will to fork over his computer. In In re Nunz, the court found that there was a “proper basis” for the attorney to turn over of his computer, helping to resolve uncertain issues regarding the execution of the will. The decedent had drafted a will leaving out five of his six children from a previous marriage; accordingly, they contested the will when documentation for the will’s preparation went allegedly missing from the drafting attorney’s computer. At a hearing, the court held that the electronically stored information was “clearly discoverable” for the children to obtain the material and necessary information. This case represents another example of how electronically stored information finds its way into a proceeding.  

See Brian Spiro, Drafting Attorney’s Computer Inspected for Evidence in Will Contest, Florida Probate Lawyers, October 18, 2016. 

 

October 19, 2016 in Current Events, Estate Planning - Generally, New Cases, Technology, Wills | Permalink | Comments (0)

Tuesday, October 18, 2016

Section 6166 Lien Causes Executor to Miss Out on Fees

Estate tax lien1In United States v. Spoor, an executor was granted a special estate tax lien as part of a § 6166 election that defers payment of federal estate taxes. At the time of the grant, the executor had only been paid part of his executor fees, and the IRS is allowed to demand a lien before allowing the Section 6166 election. Eventually, the property fell below the amount still due to the IRS, forcing the executor to assert his claim that he could use the liened property as funding for his unpaid fees. On appeal, the executor argued that his executor fees should have priority, otherwise making it difficult to obtain serving executors. Subsequently, the Eleventh Circuit Court of Appeals ruled that the lien has priority. The moral of this case is that executors should make pay arrangements of estate administrative expenses, especially when making a § 6166 election. 

See Charles Rubin, Executor Loses Out on Fees Due to Section 6166 Lien, Rubin on Tax, October 16, 2016. 

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

 

October 18, 2016 in Estate Administration, Estate Planning - Generally, Estate Tax, New Cases | Permalink | Comments (0)