Wills, Trusts & Estates Prof Blog

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

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Tuesday, March 3, 2015

Lawsuits Against Iowa Attorney's Estate Claim Over $9 Million

Gavel BWAs I have previously discussed, the estate of late Iowa attorney David Roth is facing multiple lawsuits from Roth's former clients. Additional claims have been brought, including a $1.89 million claim from VerJean and Eugene Walther who allege that the money from their 2012 car crash settlement is missing. The lawsuits against Roth claim over $9 million against his estate. Additional lawsuits may add to this total as those claiming to be victims of wrongdoing doing by Roth can file their cases until March 6.

See Ron Steele, Claims against Roth estate surpass $9-million-Deadline Approaches, KWWL, Feb. 25, 2015.

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

March 3, 2015 in Estate Administration, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, March 2, 2015

Court Upholds Finding that Herman Hemsley Had Testamentary Capacity

HemsleyActor Herman Alexander Hemsley passed away in 2011, and named his business manager Flora Isela Enchinton Bernal as independent executrix and his sole beneficiary. A Texas appeals court recently heard a challenge to the probate court's admittance of his will and authorizing issuance of letters testamentary to Bernal.

In In re Estate of Sherman Alexander Hemsley, the El Paso Court of Appeals upheld the probate court's orders, finding that the evidence heard on Hemsley's testamentary capacity was legally sufficient. The court further found that the appellant's right to challenge the disposition of Hemsley's remains by Bernal was extinguished when she acted on the order and had him buried.

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

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

Friday, February 27, 2015

French Criminal Case Gives Glimpse Into Life Of L’Oréal Heiress

Gavel BWThe criminal trial in France involving allegations by prosecutors that trusted advisers of the second wealthiest woman in the world exploited her mental state and schemed her out of over €1 billion, concluded Wednesday and a verdict is expected on Saturday. The prosecution accused a long list of individuals close to 92-year-old L’Oréal heiress Liliane Bettencourt, of taking advantage of her as she aged and began to develop dementia.

See Doreen Carvajal, In Case of L’Oréal Heiress, a Private World of Wealth Becomes Public, The New York Times, Feb. 25, 2015.

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

February 27, 2015 in Disability Planning - Property Management, Elder Law, New Cases | Permalink | Comments (0) | TrackBack (0)

Thursday, February 26, 2015

Charitable Bequest Reduced by Lawsuits and Taxes

Gavel2The recent Tax Court decision in Estate of Eileen S. Belmont serves as a cautionary tale. The problems for the estate seemed to arise out of a lack of communication with the estate's accountant combined with the estate plan not considering Ms. Belmont's individual family situation. Belmont left $50,000 to her brother and the rest of her estate, including her Ohio home, her California condo that her brother lived in, and a retirement account, to the Columbus Jewish Foundation. However, after the accountant for the estate claimed a charitable set aside deduction of $219,580 without being informed of pending litigation in California involving Belmont's brother attempting to gain a life estate in the condo, the estate was hit with a $75,662 income tax deficiency.

See Peter J Reilly, Estate Intended for Charity Depleted by Litigation and Income Tax, Forbes, Feb. 24, 2015.

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

February 26, 2015 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

When a Will Double Gifts

WillIt is unknown exactly what Mr. King intended to happen to his real property when he died as his will seemingly left it in fee simple to both his wife and then to his son when his wife died. After Mrs. King's death, the double gift by Mr. King's will created a legal battle between the executors of  Mrs. King's estate and Mr. King's grandchildren.

In Thompson v. Blackwell, the bequests to Mrs. King was interpreted as a life estate by the Georgia Supreme Court, which reasoned that the contradictory language and the order of the gifts showed that Mr. King intended that his wife receive only a life estate in the property.

See Luke Lantta, Giving the Same Property Twice in a Will, Bryan Cave Fiduciary Litigation, Feb. 25, 2015.

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

February 26, 2015 in Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Trustee’s Control of Entity Held in Trust Relevant to Removal Proceeding

GavelA beneficiary brought an action seeking removal of his mother as the personal representative of his father’s estate and as co-trustee with his brother, of his father’s testamentary trust. 

In In re Estate of Stuchlik, the Nebraska Supreme Court affirmed dismissal of all the actions relating to the estate because it was already closed but reversed and remanded on the issue of trustee removal based on the co-trustees’ management of a partnership in which the trust held both a minority limited partnership interest and a one percent general partnership interest.  Another one percent general partnership interest was held by the mother in her own right and together with the trust interest effectively gives mother all of the general partnership interest.

The Court reasoned that because trustees must deal with entities held in trust in the best interests of the beneficiaries, a trustee’s management of the entity may violate the duty of loyalty and the duty to act impartially between beneficiaries, and therefore is an appropriate subject of inquiry in a removal proceeding so long as the evidence offered pertains to the co-trustees’ actions in their capacity as trustees.

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

February 26, 2015 in New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 25, 2015

When a Testator's Attorney Can Be Liable to a Beneficiary

Gavel2

In a recent decision, the U.S. District Court for the District of Massachusetts ruled a testator’s attorney could be held liable to a prospective beneficiary for fraudulent misrepresentations. In Spinnato v. Gold-man, 2014 WL 7236343 (D. Mass. Dec. 19, 2014), applying Massachusetts law, the Court distinguished a fraudulent misrepresentation claim, where the case law is unsettled, from a negligence, negligent misrepresentation, and breach of fiduciary duty claim, where it is well-settled that a testator’s attorney cannot be held liable to prospective  beneficiaries because the testator’s attorney does not owe a duty of care to prospective  beneficiaries.

The Spinnato decision serves as a forewarning to estate  planning attorneys to “speak up now or forever hold your peace,” as waiting until after the  testator’s death to assert the testator was incompetent or under the undue influence of another  when the testator executed or changed an estate planning document may give rise to an actionable  claim by a beneficiary.

See LeClair Ryan, U.S. District Court for District of Massachusetts Holds Testator’s Attorney Can Be Liable to a Beneficiary, Lexology, Feb. 19, 2015.

February 25, 2015 in Estate Administration, Estate Planning - Generally, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Pending Tax Cases Garner Attention at Heckerling

Tax3As I have previously discussed, tax issues were a major focus of this year's 49th Annual Heckerling Institute on Estate Planning. Two ongoing tax cases involving the IRS and trusts were part of that tax minded focus. The two cases are Estate of Donald Woelbing v. Commissioner and Estate of Marion Woelbing v. Commissioner, which both involve valuation of a promissory note and stock sold to a trust, and the applicability of IRC Sections 2036 and 2038.

See Kevin Matz, A View From the Audience at Heckerling: Part II, Wealth Management, Feb. 23, 2015.

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

February 25, 2015 in Estate Tax, New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)

Minassian v. Rachins: Appointment and Actions of Trust Protector Found Proper

GavelIn a recent Florida breach of fiduciary duty against a trustee, the settlor’s revocable trust continued after his death for the benefit of his widow, who was sole trustee and sole beneficiary during her life. At her death, separate shares for the settlor’s children were to be created from the remaining trust property. The children brought an action against the trustee claiming breach of fiduciary duty and the trustee moved to dismiss on the grounds that the children were not beneficiaries because the trust ended at her death and the children were beneficiaries only of the trusts to be created then.

The trial court denied the trustee’s motion on the grounds that the trust terms were ambiguous on the children’s status.  The trustee then appointed a trust protector under trust terms authorizing her to do so. The trust protector was authorized to amend the trust to correct ambiguities and drafting errors that defeat the settlor’s intent as determined by the trust protector. The protector then amended the trust to make it clear that the trust terminates on the widow’s death at which time new trusts are created for the children out of any remaining trust principal. The trial court granted the children’s motion to invalidate the amendments made by the trust protector.

In Minassian v. Rachins, the intermediate Florida appellate court reversed, holding, first, that the trust protector provision is valid because authorized by state law, and, second, the amendment did further the settlor’s intent as shown by extrinsic evidence including an affidavit by the trust protector who was the original drafter of the trust.

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

February 25, 2015 in New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 24, 2015

Time Limit on Admitting Will to Probate Defeated Only if Will Knowingly Withheld

WillBy statute, Kansas requires a will to be filed for probate within six months of the testator’s death.  However, state law imposes on a person who knowingly withholds a will from submission for probate the attorney’s fees, costs, and damages sustained by innocent beneficiaries and then states that “such will” may be admitted to probate “as to any innocent beneficiary” if the probate petition is filed within 90 days after the beneficiary had knowledge of and access to the will.

In Estate of Strader, 339 P.3d 769 (Kan. 2014), the Kansas Supreme Court held that the exception applies only to a will knowingly withheld and therefore reversed the admission to probate of a will which could not be found at testator’s death and was then discovered four and one-half years after the testator’s death in the files of the successor firm to the firm that had drafted the will.

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

February 24, 2015 in Estate Administration, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)