Wills, Trusts & Estates Prof Blog

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

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Monday, December 8, 2014

New Case: Reri Holdings I v. CIR

GavelThe charitable contribution claimed by dissolved LLC Reri Holdings was attacked in Tax Court as a scam transfer. The charitable contribution claimed was made to a university and was a successor membership interest in another LLC.

In Reri Holdings I v. CIR, the summary judgment motion by CIR to have the appraisal used as support by the LLC to be found to be unsatisfactory for being considered a qualified appraisal and thus the successor membership Interests was not substantiated was denied.

See Theodore H. Waggner, Reri Holdings I v. CIR: Valuing a 100% Interest in a Disregarded Entity for Charitable Contribution Purposes, Wealth Strategies Journal, Dec. 4, 2014.

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

December 8, 2014 in New Cases | Permalink | Comments (0) | TrackBack (0)

Thursday, December 4, 2014

Trust Amendment Made During Litigation Allowed

Gavel2After the death of Mr. Minassian, his widow Mrs. Minassian became the trustee of a family trust he created. She was sued by his children for trust accountings and breach of fiduciary duties. After a failed attempt to have the children's case dismissed on standing grounds, she appointed a trust protector to amend the terms of the trust and attempted again to have the case dismissed using the new trust terms.

In Minassian v. Rachins, a Florida appeals court reversed the trial courts' finding that the amendment was invalid. The court reasoned that since the trust allowed for a trust protector to amend ambiguities to the trust, the mid-litigation amendment was valid.

See Jeffrey Skatoff, Trust Protector Amendment During Litigation Upheld, Clark Skatoff, Dec. 3, 2014.

December 4, 2014 in New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)

Appointment by Removed Trust Protector Held Valid

GavelJust one month after attorney Lester S. Schwartz was appointed the Wellin Family 2009 Irrevocable Trust's trust protector, the trust assets were liquidated and he filed a complaint in probate court against the trust beneficiaries. In addition to moving the case to a U.S. District Court in South Carolina, the beneficiaries removed Schwartz as trust protector, which was allowed under the trust. Three days after Schwartz was removed there was no new trust protector, which was also required by the trust terms. Schwartz appointed a replacement trust protector who then attempted to take over the legal action he had started. The beneficiaries claimed the action was invalid, because Schwartz could not appoint a new trust protector after he had been removed.

In Schwartz v. Wellin, the court held that the appointment of the new trust protector was valid because the beneficiaries' attempt to remov Schwartz as trust protector without replacing him was invalid due to the need for a trust protector at all times as required by the trust.

See Jin Park, When Trust Protector Removed Without Valid Procedure, Removed Trust Protector's Appointment of New Trustee Held Valid - Court Held, Wealth Strategies Journal, Nov. 29, 2014.

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

December 4, 2014 in New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 3, 2014

Possible Limitations on Future Effects of Elkins v. Commissioner

GAVELAs I have previously discussed, the Fifth Circuit in Elkins v. Commissioner reversed the Tax Court's reduction of the estate's discounted value of artwork to 10 percent compared to the estate's expert's opinion that the value should be discounted between 52 and 80 percent. The resulting $14 million refund that the estate received was seen as a huge victory for art collectors. However, the case's factual circumstances may limit the beneficial affect this ruling may have on future collectors. The reasoning for the reversal of the Tax Court was based on the IRS failing to meet the burden of proof, as the IRS insisted that no discount should be allowed and did not present evidence of what the proper discount should have been to rebut the estate's expert. This strategy is unlikely to be repeated by the IRS in future cases.

See Michael S. Fischer, Estate Tax A Boon For Art Collectors, Private Wealth, Nov. 7, 2014.

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

December 3, 2014 in Estate Administration, Estate Planning - Generally, Estate Tax, New Cases | Permalink | Comments (0) | TrackBack (0)

Florida Supreme Court to Decide Statute of Limitations for Estate's Creditors Issue

Gavel2The issue of whether a reasonably ascertainable creditor that is not given actual notice by an estate can bring a claim after the three month period following notice to creditors is headed to the Florida Supreme Court. In three similar cases before Florida's First, Second, and Fifth District Courts of Appeals, the rulings found that if the claim by a creditor is brought after three months from when notice was published then the creditor must get an extension before filing, even if that creditor was not given actual notice. However, a fourth case that came after the First and Second District cases and before the Fifth District's case, created a split.

In Golden v. Jones, the Fourth District held that whether the filing was untimely depends on whether the creditor was known or reasonably ascertainable by the estate, and that if the creditor was then the statute of limitations does not begin to run until they receive notice, and the claim is timely filed as long as two years has not passed since the death of the decedent. The case has gone to the Florida Supreme court and awaits oral arguments.

See Jonathan Galler, How Courts Handle Late-Filing Estate Creditors, Wealth Management, Nov. 11, 2014.

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

December 3, 2014 in Estate Administration, New Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 26, 2014

Families of Miners Killed in Explosion Seek Restitution

Gavel2Over four years ago, a mine explosion in the Upper Big Branch mine in West Virginia killed many miners, and a year later the mine's owner agreed to pay restitution to the miners' families as part of a non-prosecution agreement. Now, some of the families have filed a lawsuit against the company claiming they were never paid their restitution and seeking payment to be made.

See Yawana Wolfe, Miner's Families Sue Over Death Payments Delay, Courthouse News Service, Nov. 25, 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 26, 2014 in Current Affairs, Current Events, Estate Administration, New Cases | Permalink | Comments (0) | TrackBack (0)

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)