Wills, Trusts & Estates Prof Blog

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

Wednesday, October 20, 2021

Injunctive Relief to Prevent Monetary Damages in Estate Litigation

Estate planningGenerally, a party is only entitled to injunctive relief if they can "demonstrate that the damages for which they seek redress are not compensable by an award of monetary damages. . ."

However, the US District Court recently decided that injunctive relief was necessary to preserve monetary assets pending the resolution of the matter. Though it is rare to see estate litigation before a US District Courts the Court applied New Jersey law to reach its holding that injunctive relief was appropriate. 

The US District Court found that "the decedent had improperly taken a large sum of money from the party who had brought the litigation" after the plaintiff discovered that the decedent's estate was going to sell a parcel of property. The plaintiff moved for an injunction requiring the proceeds from the sale to be held in escrow. The District Court found that injunctive relief was necessary to "preserve the status quo and prevent the dissipation of these assets prior to a ruling on the merits." 

The Court further concluded that the plaintiff would suffer irreparable harm should the assets be distributed before the conclusion of the lawsuit. 

The District Court's decision indicates that courts may impose injunctive relief in order to protect monetary assets. 

See Paul W. Norris, Injunctive Relief to Prevent Monetary Damages in Estate Litigation, Stark & Stark Attorneys at Law: New Jersey Law Blog, October 12, 2021. 

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

October 20, 2021 in Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Friday, October 15, 2021

Top state court upholds trust provision requiring beneficiary to be unmarried

TrustOn October 8th, the Indiana Supreme Court upheld a trust provision that made distribution of an inheritance contingent on the beneficiary being unmarried. 

The Court held that the provision "is not an unlawful restraint on marriage." The provision was part of a revocable trust that "resulted in the estate of Marcille Borcherding to her son, daughter and four stepchildren after her death." 

The trust stated that Marcille's son, Roger Rotert, would get his share of the estate outright if he was unmarried at the time of her death. If Rotert was to be married, the assets would remain in a subtrust. 

Rotert's third wife filed for divorce before Marcille Borcherding executed the trust, but the couple reconciled and were still married when Marcille died in 2016. Marcille's daughter Connie Stiles, who served as a trustee for the subtrust, came to an agreement with Rotert in which Rotert agreed to receive the subtrust's cash assets and agreed to keep the real property in the trust. Rotert later brought suit. 

Indiana law voids will provisions that condition a spouse's inheritance on remaining unmarried, but the Indiana Supreme Court stated that the rule does not apply to trusts, which can set marriage conditions on spouses and others.

See Debra Cassens Weiss, Top state court upholds trust provision requiring beneficiary to be unmarried, ABA Journal, October 13, 2021. 

October 15, 2021 in Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Thursday, September 30, 2021

Britney Spears Is Released From Her Father’s Oversight

SpearsJudge Brenda Penny has granted the request of Britney Spears' attorney, Mathew S. Rosengart, to remove Jamie Spears as conservator. The Judge's decision marks the first time since 2008 that Britney Spears will be without her father's oversight. 

According to Rosengart, Britney had been pleading for Jamie Spears' removal and stated, "[t]his man does not belong in her life, your honor, for another day. . .Please hear the plea of my client." 

After hearing both sides, Judge Penny agreed that suspending Jamie Spears was in the best interest of Britney Spears. Judge Penny stated, "[t]he current situation is not tenable." 

The decision by Judge Penny brought a significant ending to what has been a chaotic summer—in which Britney Spears broke her public silence at a hearing in June to plead her case and speak her truth. 

Although an attorney for Jamie Spears, Vivian Lee Thoreen, argued to end the conservatorship right away instead of suspend Mr. Spears, Rosengart asked the Judge to wait so that he could further investigate Mr. Spears's conduct. 

Rosengart asked for a termination hearing to be set for 30 to 45 days so that Ms. Spears could have an orderly transition. The next hearing is set for November 12. 

See Joe Coscarelli, Julia Jacobs, & Liz Day, Britney Spears Is Released From Her Father’s Oversight, The New York Times, September 29, 2021. 

September 30, 2021 in Estate Administration, Estate Planning - Generally, Guardianship, New Cases | Permalink | Comments (0)

Saturday, August 14, 2021

Lawyer who gave 'perfect' secretary a second chance after theft is suspended after misjudging her

Estate planningPennsylvania lawyer William Krtzon has been suspended for six months for giving a trusted employee another chance "after she stole from his aunt's estate. . ." Krtzon was suspended for "failing to supervise the employee, who stole additional money from seven estates represented by the lawyer." 

Krtzon testified that he was surprised about the employee's thefts. Krtzon also testified that he put a lot of trust in the employee, Joy Hale and thought that she was the "perfect secretary." 

Krtzon hired Hale in 2008 to handle estate accounting and perform other duties. Krtzon learned that Hale had stolen $3,300 from his aunt's estate by writing a check and forging his signature. Krtzon required Hale to repay the estate through a reduction in pay. Even after learning of Hale's theft, Krtzon gave Hale another chance. 

Despite the second chance, Hale continued to steal money from Krtzon's clients' estates. In May 2016, one of Krtzon's clients informed him that Hale was misrepresenting account balances. Krtzon actually told the client that she was mistaken, but the client pushed forward with an investigation. 

Although Krtzon was aware of the investigation, he continued to imply Hale for two more months. Hale later plead guilty to criminal charges of theft and forgery.

The Pennsylvania disciplinary board said Krtzon "violated ethics rules requiring lawyers to act with reasonable diligence, to keep clients reasonably informed, to keep accurate accounting records, and to supervise non lawyers to ensure that their conduct is compatible with a lawyer's professional obligations." 

See Debra Cassens Weiss, Lawyer who gave 'perfect' secretary a second chance after theft is suspended after misjudging her, ABA Journal, August 12, 2021. 

Special thanks to Adam J. Hirsch (Professor of Law at the University of San Diego School of Law) for bringing this article to my attention.

August 14, 2021 in Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Thursday, August 12, 2021

Britney Spears’s Father to Exit Conservatorship

Estate planningAccording to court documents, James Spears plans to transfer control of Britney Spears' finances to a new conservator.

The court documents, which were filed in Los Angeles County Superior Court on Thursday, come after a long battle between the pop star and her father who has governed the pop star's "personal life and roughly $60 million estate for the last 13 years."

James Spears' decision to step comes weeks after Britney Spears' asked a judge to remove her father as the conservator after characterizing the estate as "abusive."

Britney Spears was also recently allowed to hire a new lawyer, Mathew Rosengart, who has pushed "aggressively" to remove or suspend James Spears as conservator of the estate. Although Mr. Rosengart conceded that "there are no actual grounds for suspending or removing [Mr. Spears], he does not believe a public battle with his daughter over his continuing services as her conservator would be in her best interest." 

Mr. Spears said that he would work with the court and Mr. Rosengart to "prepare for an orderly transition to a new conservator." Mr. Rosengart stated that Mr. Spears decision to step down is "vindication for Britney." 

See Neil Shah, Britney Spears’s Father to Exit Conservatorship, The Wall Street Journal, August 12, 2021. 

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

August 12, 2021 in Estate Administration, Estate Planning - Generally, Guardianship, Music, New Cases | Permalink | Comments (0)

Tuesday, August 10, 2021

Oregon Supreme Court: Estate of Evans v. Dept. of Revenue

Estate planning
In Estate of Evans v. Dept. of Rev., the Oregon Supreme Court upheld the the estate taxation of intangible QTIP upon the death of a surviving spouse, solely on the basis of her Oregon residence, as consistent with the federal Due Process Clause.  (Decedent spouse had died a resident of Montana.  The trust was testamentary and established under Montana law.  (The trustee was Montana resident.)

Review the entire case here

Special thanks to Paul M. Cathcart (Hemenway & Barnes, LLP, Boston, MA) for bringing this case to my attention.




August 10, 2021 in Estate Administration, Estate Planning - Generally, Estate Tax, New Cases | Permalink | Comments (0)

Monday, August 9, 2021

Louisiana Supreme Court Reverses Itself And Abandons Overly Strict Construction Of Standards For Creating Valid Notarial Will

Estate planningIn Succession of James Conway Liner III, the Louisiana Supreme Court vacated its original opinion and "clarified the analytical framework for determining whether a notarial will is in substantial compliance with the provisions of the Louisiana Civil Code." 

James executed two notarial instruments, one in 2013 and one in 2015. The 2015 testament was invalidated by the district court on the basis that the provisions of the attestation clause were not "substantially similar to those set forth in La. C.C. art. 1579(2), which governs the requirement of the attestation clause for a notarial will and testament when a testator is unable to read." The appellate court reversed the decision. 

The Louisiana Supreme Court reversed the Court of Appeal's decision in a January 2021 Opinion and reinstated the trial court's judgment invalidating the 2015 testament. The Louisiana Supreme Court then granted a Motion for Rehearing and issued a new opinion. 

Generally, the intention of the testator as expressed in the will must govern. However, the Supreme Court noted that, "the formalities of a notarial will provide a protective function of guarding the testator against the risk of fraud." 

The Louisiana Supreme Court established a clarified standard: 

Courts must determine if a notarial will, with all formalities and evidence taken into consideration, reflects the testator was sufficiently protected against the risk of fraud. Holmes, supra, at 541. This involves a contextual analysis of the protective function of a will’s formalities in light of the document itself.

If the court’s analysis reveals an increased likelihood that fraud may have been perpetrated, the deviations are material and cause to nullify the will exists. If not, the deviations are slight and should be disregarded. Guezuraga, 512 So.2d at 368. Whether the deviating language sufficiently protects against the risk of fraud is construed liberally in favor of maintaining the validity of the will. Id.; Holbrook, 13-1181, p. 11, 144 So.3d at 853. Mere allegations of fraud are not outcome determinative.

The Louisiana Supreme Court ultimately found that the attestation clause of James' 2015 testament was executed in substantial compliance with La. C.C. art. 1579(2), emphasizing the importance of substantial compliance as the governing standard as opposed to strict compliance. 

See Louisiana Supreme Court Reverses Itself And Abandons Overly Strict Construction Of Standards For Creating Valid Notarial Will, Probate Stars, July 14, 2021. 

August 9, 2021 in Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Wednesday, August 4, 2021

Michael Jackson estate valuers give rare inside look

MJExperts for the estate of Michael Jackson have offered a unique look at how the valuations were done for the "tax trial of the century." The case, Estate of Michael J. Jackson v. Commissioner, T.C. Memo 2021-48 was garnered massive media attention and was intently followed by valuation experts due to the "contentious issues" involved. 

The dispute concerned valuation of Jackson's name and likeness, his 50% interest in a music publishing company (operating business), and an entity that held a catalog of music. 

Experts joined together in a BVR Webinar panel that consisted of Jay E. Fishman (Financial Research Associates) and celebrity licensing expert Mark Roesler (CMG Worldwide). Fishman and Roesler worked together on valuing the name and likeness. The panel also included David Dunn, a music industry financial advisor for Shot Tower Capital. Dunn advised the valuation of the publishing entity and the music catalog. 

One point of contention in the case was the huge difference between the valuations of the estate and the IRS. If the government had prevailed, the estate would have paid an extra $500 million in taxes. 

The court sided with the estate on the name and likeness value as well as the value of the music publishing company, while the court sided with the IRS on the value of the music catalog. 

A recording of the webinar, Power Panel: Estate of Michael J. Jackson v. Commissioner, is available here. 

See Michael Jackson estate valuers give rare inside look, BVWire, August 4, 2021. 

Special thanks to Mark J. Bade (CPA, GCMA, St. Louis, Missouri) for bringing this article to my attention. 

August 4, 2021 in Estate Administration, Estate Planning - Generally, Estate Tax, New Cases | Permalink | Comments (0)

Tuesday, July 27, 2021

Family of James Brown settles 15-year battle over his estate

James BrownEntertainer James Brown's family has reached a settlement that will end a 15-year battle over the late singer's estate. David Black, an attorney representing Brown's estate, confirmed to the Associate Press, "that the agreement was reached July 9. 

The legal battle had been going on since his death at the age of 73 on Christmas Day 2006. James Brown's death led to a slew of "bizarre headlines, beginning with Tomi Rae Hynie—a former partner who claimed to be Brown's wife—being locked out of his 60-acre (24-hectare) estate while photographers captured her sobbing and shaking its iron gates, begging to be let in." 

There were over a dozen lawsuits filed by people attempting to get their hands on Brown's assets, which have been estimated to be worth anything from $5 million to more than $100 million. 

Brown was renowned for hundreds of iconic musical works including hits like “I Feel Good” and “A Man’s World,” and was known around the world for his flashy performances and dynamic stage presence. But years of drug problems and financial mismanagement caused his estate to dwindle.

The war over Brown's estate did not just include his assets, there was also a fight over what to do with his body. Brown's family fought over his remains for more than two months, "leaving Brown's body, still inside a gold casket, sitting in cold storage in a funeral home." 

Last year, the South Carolina Supreme Court ruled that Hynie had not been legally married to Brown and did not have a right to his estate. 

Justice also ordered a circuit court to "promptly proceed with the probate of Brown's estate in accordance with his estate plan, which outlined creation of a trust that would use his music royalties to fund educational expenses for children in South Carolina and Georgia." 

According to AP News: 

A 2009 settlement plan would have given nearly half of Brown’s estate to a charitable trust, a quarter to Hynie, and the rest to be split among his adult children. The state Supreme Court overturned that deal in 2013, writing that then-Attorney General Henry McMaster — now the state’s governor — hadn’t followed Brown’s expressed wishes for most of his money to go to charity, having instead selected a professional manager who took control of Brown’s assets from the estate’s trustees to settle debts.

See Meg Kinnard, Family of James Brown settles 15-year battle over his estate, AP News, July 23, 2021. 

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.  

July 27, 2021 in Estate Administration, Estate Planning - Generally, Music, New Cases | Permalink | Comments (0)

Friday, July 23, 2021

Wife’s Fraudulent Transfer Claim Against Husband For Transferring Business Interests To Trust Failed Due To The Statute Of Repose

Estate planningIn Austin v. Mitchell, "a wife filed suit alleging her ex-husband fraudulently transferred a portion of his limited partnership interest in a family limited partnership to a trust for the benefit of his children." No. 05-19-01359-CV, 2021 Tex. App. LEXIS 4536 (Tex. App.—Dallas June 8, 2021, no pet. history). 

The trial court granted summary judgment in favor of the husband and the wife appealed. The court of appeals first addressed the husband's statute of repose defense. The wife claimed that the husband's transfer was fraudulent because it was made:

without fair consideration and the husband was left insolvent as a result; with actual intent to hinder, delay, or defraud the wife; or without receiving reasonably equivalent value at a time when the husband believed or should have believed his debt to the wife was beyond his ability to pay as payments became due.

The court affirmed the summary judgment after it found that the evidence showed that the wife should have known of the transfer more than four years before the suit due to the husband's testimony in a deposition, in which the Wife's attorney was present. 

Although the wife argued that she had standing, the court disagreed stating that the wife did not have sufficient connection to the trust. 

See David Fowler Johnson, Wife’s Fraudulent Transfer Claim Against Husband For Transferring Business Interests To Trust Failed Due To The Statute Of Repose, Texas Fiduciary Litigator: The Intersection of Texas Courts and the Fiduciary Field, June 29, 2021. 

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

July 23, 2021 in Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)