Wills, Trusts & Estates Prof Blog

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

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Thursday, September 19, 2013

Mennen Heirs Sue Wilmington Trust

WilmingtontrustThe heirs to Mennen Co., are suing Wilmington Trust in the amount of $100 million for investment losses. Mennen Co., the company that makes the deodorant Speed Stick, is headquartered in New Jersey. The company was sold to Colgate-Palmolive in 1992 for $670 million. George Mennen created a trust in 1970.

Kathryn Mennen, George Mennen's grand daughter, stated that Wilmington Trust did not take any mitigating action when the co-trustee and her uncle, "wrongly dissipated" the trust assets through investments in a floundering business. The case is currently in discovery.

See Bloomberg News, Wilmington Trust Sued by Mennen Heirs Seeking $100M, American Banker, Sep. 11, 2013.

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

September 19, 2013 in New Cases, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 18, 2013

Kansas Attorney Charged with Murder for the Second Time

JailSusan Elizabeth Van Note, a Kansas City attorney, was charged a year ago with killing her father, William Van Note in 2010. William Van Note was on vacation with his girlfriend when they were shot and hospitalized. Susan then forged documents that took William off life support after only four days. Prosecutors claimed that Susan showed doctors a forged power of attorney that gave her the final say over her father's health care decisions.

 

Now, Susan faces a second murder charge for her father's girl's friend. Camden County prosecutor charged Van Note with first-degree murder in the shooting and death of Sharon Dickson, William Van Note's girlfriend. The prosecutor has dropped the charges against Van Note’s friends, Stacey and Desre Dory. Dory’s cooperation is helping the prosecution charge Van Note with murder.

See Associated Press KC Lawyer Faces Second Murder Charge, CJ Online,  Sep. 1o, 2013.

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

September 18, 2013 in Current Events, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, September 9, 2013

Henry Seggerman Pleads Guilty and Agrees to Testify

JailHenry Seggerman and family members are accused of hiding millions of dollars from his father's estate from the IRS. In the past, three of Seggerman's brothers and sisters have pleaded guilty to conspiracy and other tax related crimes. Seggerman's father left a $24 million dollar estate. More than half of the estate is in an undeclared Swiss accounts. Henry Seggerman is the chief investment officer of his father's hedge fund. 

Recently, Seggerman pleaded guilty to conspiracy and two counts of falsifying tax returns. Seggerman may serve up to an 11 year  sentence in prison. “I deeply regret my participation in these activities and intend to make amends for my conduct,” he stated at the hearing. Seggerman will likely testify for the government at Michael Little's trial an attorney and family advisor also charged with defrauding the IRS. 

See Christie Smythe, Seggerman Pleads Guilty to Conspiracy in Tax Evasion Case, Bloomberg, Aug. 28, 2013.

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

September 9, 2013 in Current Events, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Sunday, September 8, 2013

Article on the Fiduciary Income Tax Charitable Deduction

Trust fidDeborah S. Kearns  recently published an article entitled, For Treasury Charity Starts at Home: Treasury's New Interpertation of the Fiduciary Income Tax Charitable Deduction, (August 18, 2013). Provided below is the introduction to the article from Albany Law School:

This Article challenges Treasury’s recent regulations narrowly interpreting the fiduciary income tax charitable deduction under IRC § 642(c). Treasury’s new interpretation highlights a fundamental tension in the federal tax system, which involves identifying transactions that are abusive versus transactions that take advantage of congressionally sanctioned tax incentives that were designed to further important public policies like charitable giving. For almost forty years, IRC § 642(c) had been liberally construed by Treasury, which was consistent with the legislative history and principles of statutory construction traditionally applicable to charitable deductions. Treasury’s new restriction on income ordering rules in charitable trusts overrides the legal norms historically applicable to charitable deductions and is contrary to the legislative history, case law interpreting charitable deductions and Subchapter J of the Internal Revenue Code. If left unchallenged, this new interpretation has the potential to erode congressionally sanctioned tax incentives, charitable and otherwise, which is cause for great concern. This Article examines the history of charitable deductions in the United States and the case law that has liberally construed the deductions for almost a century. The Article also examines the statutory framework of Subchapter J of the Internal Revenue Code and concludes that Treasury’s justification for its new interpretation of the deduction is without merit and that the regulations should be invalidated if challenged.

September 8, 2013 in Articles, Income Tax, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 4, 2013

Article on The Court's Supervisory Power Over the Exercise of Trustee's Discretion

SigaporeHang Wu Tang, (Singapore Management University School of Law) has recently published an article entitled, The Court's Supervisory Power Over the Exercise of Trustee's Discretion: A Contribution from Singapore (July 4, 2013). Trusts and Trustees, 2013. Provided below is the abstract from SSRN: 

This article analyses the latest Singapore Court of Appeal’s decision in Foo v Foo which provides valuable guidance on how a trustee should act in the exercise of his or her discretion in relation to a power of sale.

September 4, 2013 in Articles, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 3, 2013

Artist's Trustees Continue a $60 Million Dollar Legal Battle

Rauschenberg_t160Well-known artist Robert Rauschenberg left a $600 million dollar estate. The executors handling the estate are now in court according to the New York Times. Three trustees are asking for $60 million dollars that they claim is owed to them for handling Rauschenberg's property in several states. The trustees are asking the Rauschenberg Foundation for the funds. Despite the fact that Rauschenberg was a longtime friend with each of the trustees, the legal battle began in 2011 when the trustees filed suit against the foundation. 

SeeRauschenberg Friends Seek $60 Million From Artist's Estate, Naples News Aug. 26, 2013.

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

September 3, 2013 in Current Events, Estate Administration, Professional Responsibility, Trusts | Permalink | Comments (1) | TrackBack (0)

Thursday, August 29, 2013

Article over Trustee's Discretion

HwtangHang Wu Tang (Singapore Management University School of Law) has recently published an article entitled, The Court's Supervisory Power Over the Exercise of Trustee's Discretion: A Contribution From Singapore (2013). Provided below is the introduction to the article:

This article analyses the latest Singapore Court of Appeal’s decision in Foo v Foo which provides valuable guidance on how a trustee should act in the exercise of his or her discretion in relation to a power of sale.

August 29, 2013 in Articles, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 27, 2013

Two Men Caught Defrauding Elderly in Ponzi-Like Scheme

PonziIn Missouri, Robert Palmer and Mark Driver have been indicted for allegedly defrauding elderly customers out of $3 million. The two face two felony counts of mail fraud and two counts of wire fraud. The two businessmen owned Princeton Partnership LLC, and had solicited investors to transfer their inheritance or savings over to Palmer and Driver, and the company would invest the money for their clients benefit.

 

However, the money was not invested for the clients benefit. Instead, the two used the money for their own expenses and the business's operating costs. Additionally, Driver and Palmer ran a "Ponzi-style" scheme using new investor funds to pay old investors to make them think they were gaining investment returns.

See Two Missouri Businessmen Indicted for Defrauding Elderly Clients , Biz Journal,  Aug. 21, 2013.

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

August 27, 2013 in Current Events, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, August 26, 2013

Probate Lawyer Breaches Fiduciary Duty

EthicsProbate attorney, Michael Schless, is being investigated by the Newington Police Department for his reprehensible behavior as a fiduciary. Schless tried to cover up his improper handling of John Fritz a disabled mans with cerebral palsy’s accounts. Schless is accused of falsifying account statements and swindled money from Fritz’s accounts. 

See Jon Lender Police Investigate Probate Lawyer Over Disabled Man's Missing Funds, Courant,  Aug. 24, 2013.

August 26, 2013 in Current Affairs, Malpractice, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Thursday, August 22, 2013

Missouri Court Held Agent Opening a Joint Account with Principal Violates Duty

GavelAn agent under a durable power of attorney closed the principal’s bank accounts and opened new accounts in name of the agent, the co-agent, and the principal as joint tenants with rights of survivorship. The power of attorney authorized the agent to make gifts to herself in the amount of the gift tax annual exclusion.  After the principal’s death, one of the agents withdrew the funds. The principal’s siblings began an action to recover the funds from the agent and her husband and received a summary judgment against both parties. 

 In re Estate of Lambur, 397 S.W.3d 54 (Mo. Ct. App. 2013), the intermediate appellate court held that an agent opening a joint account with principal deemed to violate fiduciary duty. The court affirmed with respect to the agent for all sums in excess of the annual exclusion, reiterating established Missouri law that opening the joint account with rights of survivorship was a gift to the agent, that any authority given an agent to make gifts must be in writing, and that powers of attorney are strictly construed.  The court reversed as to the agent’s husband, finding that there were issues of fact as to whether he benefited from the funds. 

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

August 22, 2013 in New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)