Wills, Trusts & Estates Prof Blog

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

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Wednesday, August 20, 2014

Widow of Former Navy Seal Sues Estate Planning Attorney

Gavel3Taya Kyle, the widow of former Navy Seal and American Sniper author, Chris Kyle, is suing her estate planning attorney. The suit was filed in Dallas County last week. Kyle claims that her attorney and trustee of her family trust, Christopher Kirkpatrick, acted negligently with regards to the services he provided her and her late husband. Kyle also alleges that Kirkpatrick failed to inform her that he had a conflict of interest, which was an impediment to his representation of her and her husband. The estate of Chris Kyle is also a plaintiff in the lawsuit.

See David Lee, ‘American Sniper’s’ Widow Sues Her Attorney, Courthouse News Service, Aug. 18, 2014.

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

August 20, 2014 in Estate Planning - Generally, New Cases, Non-Probate Assets, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 19, 2014

New Case: In re Indenture of Trust Dated January 13, 1964

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Improper assignment is not a basis for trustee liability.  A trust beneficiary assigned his interest in the trust for the benefit of other beneficiaries, even though the trust terms contained a valid spendthrift provision prohibiting voluntary and involuntary alienation, in exchange for a cash payment from the trust.  The trustee made distributions in accord with the assignment. Twelve years later, after the trust’s termination, the assignor brought an accounting action. In affirming summary judgment for the trustee and another beneficiary, the intermediate Arizona appellate court held that the trustee was not liable for payments made in accord with an invalid assignment, that the assignor was not entitled to an accounting because he was no longer a beneficiary, and that in any event the assignor’s action was barred by laches.  In re Indenture of Trust Dated January 13, 1964, 326 P.3d 307 (Ariz. Ct. App. 2014).

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

August 19, 2014 in Estate Planning - Generally, New Cases, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, August 14, 2014

Preventing Financial Abuse of Elders

Old people holding hands

Kiplinger’s has labeled financial abuse of the elderly “the crime of the 21st Century.”  This should come as no surprise, as a new study in the Journal of General Internal Medicine reported that as many as one in twenty older adults in America may be victims. 

The question then becomes what can be done to curb this growing ignominy? 

Fortunately, there are new efforts aimed at getting lawyers to spot and report financial fraud targeting older Americans.  The nonprofit Investor Protection Trust and its sister organization, the Investor Protection Institute have teamed up with the American Bar Association (ABA) to launch the Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program Legal. 

The EIFFE Program has potential to succeed, as lawyers can be among the first to spot problems.  “We knew that a lot of attorneys—not just elder law attorneys—are helping seniors with estate plans and wills and powers of attorney, so they would be in a position to spot someone who could potentially be at risk of financial exploitation.”  Nine of ten practicing attorneys said they are willing to participate in a program to learn about detecting, preventing and redressing elder investment fraud and financial exploitation.

See Richard Eisenberg, Promising Effort to Curb Elder Financial Abuse, Forbes, Aug. 13, 2014. 

August 14, 2014 in Elder Law, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, August 11, 2014

State Bar of Michigan Addresses Prevalence of Estate Planning Scams

CautionAfter receiving many complaints of estate planning schemes run by salespeople throughout the state, the State Bar of Michigan addressed the issue last week by holding A Living Trust Education Initiative. The Initiative included educational presentations across the state, with a focus on estate planning scams. Many of the scams reported in Michigan involved salespeople giving estate planning advice without a license to practice law. The salespeople either go door-to-door offering free estate planning advice or hold an event that offers a free meal and estate advice, which scare attendees into purchasing an annuity or services from the presenter, such as having them draft a living trust.

See Matt Wallace, Who Should You Trust?, The Times Herald, Aug. 9, 2014.

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

August 11, 2014 in Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (1) | TrackBack (0)

Friday, August 8, 2014

Trust Assignment Nullified

Anti SymbolFred L. Houston created a spendthrift trust in 2006. Houston received both income and principal payments from the trust during his life, and set up the trust to vest in his heirs. While Houston was still living the trustee, Ms. Williams, carried out a sneaky plan in which the royalty interest in a lease was assigned by Houston to the Noble House, and Williams received 50% of the interest. At Houton’s death, this deal was the source of a lawsuit with the executor challenging the deal as an absolute nullity, and Williams and the president of Nobel House defending the assignment.

In J-W Operating Co. v. Olsen, the executor’s argument won and the assignments were ruled absolute nullities based on public policy. The Louisiana court reasoned that the assignment was not within the intent of the settler as expressed in the trust document.

See Charles Sartain & Brooke Sizer, Treachery of the Untrustworthy Trustee, JD Supra, August, 6, 2014.

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

August 8, 2014 in Estate Administration, Estate Planning - Generally, New Cases, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Virginia Broker Accused of Stealing Thousands of Dollars From Elderly Clients

TheftA broker from Virginia has been charged by the SEC for stealing from her clients. Donna Tucker is accused of falsifying billing statements sent to clients, which were in an electronic format that she did not expect them to read. Her clients included legally blind and elderly individuals, which she allegedly stole $730,000 from to purchase personal items such as vacations and clothing.

See Andrew Welsch, SEC Charges Broker with Bilking Elderly Clients, On Wall Street, August 1, 2014.

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

August 8, 2014 in Current Affairs, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Saturday, August 2, 2014

Financial Broker Must Pay $850,000 for Participation in Deathdealer Scheme

BagMichael Horowitz, a broker in Los Angeles, will have to pay $850,000 for a scheme involving investors and terminally ill patients. The Securities Exchange Commission says that Horowitz was selling variable annuities contracts to investors that were marketed as short-term investments. The investments involved the payout of death benefits from terminally ill patients. The payout to investors occurred when the patients died, which Horowitz found through nursing homes and Hospice. In addition to having to pay disgorgement, interest, and fees, Horowitz is also banned from associating with other brokers, investment advisors, or firms.

See  Megan Leonhardt, Blotter Report: The Deathdealer, Wealth Management, July 31, 2014.

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

August 2, 2014 in Estate Planning - Generally, Non-Probate Assets, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Friday, August 1, 2014

LegalZoom Plans to Expand After Legal Victories

LawAs I have previously discussed, LegalZoom has had multiple successes defending lawsuits alleging they are engaging in the unauthorized practice of law. In light of their recent legal wins, LegalZoom plans to expand their services, including offering new services. The new offerings, including legal advice from lawyers will add to current prepaid service options.

See Robert Ambrogi, Latest Legal Victory Has LegalZoom Poised for Victory, ABA Journal, August 1, 2014.

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

August 1, 2014 in Current Affairs, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Lawyer Disbarred for Living Trust Scam

Gavel2After participating in a living trusts scam, a Pennsylvania lawyer has been disbarred. The Pennsylvania Supreme Court issued the order on Monday. The lawyer was working with non-lawyer salespeople who would take marketing brochures created by the attorney to the home of elderly individuals. The salespeople would collect fees, and have the individuals fill out forms and sign documents, which would then be returned to the attorney for him to draft the trusts. The attorney did not interact with the clients accept through these forms collected at the client’s home and the preprinted brochures.

See Jeffrey Marshall, Living Trust Flimflam Gets PA Lawyer Disbarred, Marshall, Parker and Weber, July 30, 2014.

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

August 1, 2014 in Estate Planning - Generally, Non-Probate Assets, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 23, 2014

Long Running Breach of Trust Case Shows No Sign of Stopping

FloridaThe case is Siegel v. JP Morgan Chase Bank, and after passing the 10 year mark, it may be the longest running breach of trust suit Florida has ever seen. The case has seen multiple trials and appeals. Now, after JP Morgan Chase has emerged victorious in the latest trial in probate court, the case is headed to appellate court once again. The case involves the beneficiaries of the affluent art collector Dorothy Rautbord challenging distributions made from the trust by corporate trustee, JP Morgan Chase.

See Jeffrey Skatoff,  Breach of Trust Lawsuit in Florida Still Going Strong, Clark Skatoff, July 25, 2014.

July 23, 2014 in New Cases, Non-Probate Assets, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)