Wills, Trusts & Estates Prof Blog

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

Thursday, January 21, 2021

Nebraska Supreme Court Construes Will: Intent To Disinherit Heir Must Be Express Or Necessarily Implied In Will

Estate planningIn In re Estate of Brinkman, "the Nebraska Supreme Court construed the terms of a will to determine that s decedent did not intend to disinherit his daughter under the terms of the will." 

Michael Brinkman died in 2016 survived by two children, Nicole and Seth. Kimberly Milius was named as personal representative. Kimberly is Seth's mother but not Nicole's. Nicole believed that she was entitled to an undivided one-half interest in Michael's estate, despite the fact that Kimberly is not her mother. Kimberly and Seth alleged that it was Michael's intent to disinherit Nicole. 

Since Nicole's name is not mentioned in then will, she filed a motion to construe the will under Nebraska law, "contending that an ambiguity existed in the term 'issue.'" Nicole argued that the term 'issue' was meant to refer to both her and Seth.

The Nebraska county court found that the will was ambiguous on whether Michael intended to disinherit Nicole and found that the language of the will did not disinherit her. 

The Nebraska Supreme Court found that the decedent (Michael) did not intend to disinherit his daughter. 

See Nebraska Supreme Court Construes Will: Intent To Disinherit Heir Must Be Express Or Necessarily Implied In Will, Probate Stars, January 18, 2020. 

January 21, 2021 in Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Thursday, January 14, 2021

Suspension imposed after appeals judge is accused of making himself a beneficiary of ex-client's will

Estate planningThe Georgia Supreme Court has suspended a state appeals judge and is engaging in an ethics investigation. 

The judge, Christian Coomer, allegedly made himself a beneficiary and his wife the executor when drafting wills for a former client. Coomer has also been accused of drafting an irrevocable trust for the client that designated Coomer as the trustee and beneficiary with the power to transfer funds to himself while the client was still alive. 

"A company owned by Coomer is also accused of borrowing $369,000 in a series of three loans from the client, the first of which was paid off on the day that the second loan took effect. Two of the loans listed the client’s own home as security, which Coomer later attributed to a scrivener’s error. The third loan was unsecured. Coomer has since repaid all of the loans." 

Coomer began representing James Filhart, the former client who is now 79-years-old, when Filhart sought guardianship of his girlfriend in a nursing home. 

According to the Georgia Judicial Qualifications Commission, Coomer transferred funds from his campaign account to his law firm account to cover minimal or overdrawn balances.

Coomer agreed to the suspension (with pay), but has denied any wrongdoing. 

See Debra Cassens Weiss, Suspension imposed after appeals judge is accused of making himself a beneficiary of ex-client's will, ABA Journal, January 6, 2021. 

January 14, 2021 in Current Affairs, Current Events, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Nevada Supreme Court: Include All Trust Documents To Trigger 120-Day Trust Challenge Deadline

TrustIn In re Estate of Horst Revocable Trust, "the Nevada Supreme Court considered what a trustee must include in a notice to beneficiaries under NRS 164.021 to trigger the 120-day limitation period deadline to challenge the validity of a trust." 

Ella E. Horst established the Ella E. Horst Revocable Trust for the benefit of her children and grandchildren. After the trust was established, Ella moved to Las Vegas to live with her granddaughter Patricia. Through the trust, Ella bought a home with Patricia and Patricia's partner. The trust paid for 50% of the purchase price for the home and retained a 50% interest therein. 

The trust was amended a couple of times over the next few years and those amendments are below: 

  • Ella executed a second amendment to the Trust that removed a $20,000 specific gift to Patricia, provided Patricia with a specific gift of the Trust’s interest in the Home, and named Patricia as successor trustee.
  • Ella signed a third amendment that gave an additional specific gift of real property to Patricia.
  • Patricia’s partner conveyed her 25% interest in the Home to the Trust, and Ella purportedly executed a fourth amendment, adding a specific gift of the Trust’s recently acquired 25% interest in the home to Patricia.

When Ella died, Patricia became the successor trustee and on January 27, 2017 Patricia gave notice to the other beneficiaries, heirs, and interested persons. However, the notice did not include the fourth amendment to the trust. In May 2018, Patricia sought to have the validity of the court amendment confirmed. 

Brian Holiday, one of the beneficiaries, filed an objection to the petition claiming that the amendments were the result of undue influence. 

The district court barred the objection because Holiday filed more than 120 days after Patricia served the initial notice. However, in respect to the fourth amendment, the district court found that the objection was timely. 

The Nevada Supreme Court ultimately held that Holiday's objections to the second and third amendments were also timely because the initial notice did not include the fourth amendment and was therefore insufficient notice to the beneficiaries. 

See Nevada Supreme Court: Include All Trust Documents To Trigger 120-Day Trust Challenge Deadline, Probate Stars, January 8, 2021

 

 

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

Tuesday, January 12, 2021

Massachusetts Supreme Judicial Court: Personal Representative’s Power To Pay Claims Extinguished After Three Years

Estate planningIn In re Estate of Kendall, the Massachusetts Supreme Judicial Court decided "whether the personal representative of the Estate of Jacqueline Kendall was required to pay a creditor claim for reimbursement from the Commonwealth's MassHealth Program when the estate proceeding was commenced more than three years after Kendall died. The short answer: no." 

Kendall received about $105,000 in Mass Health Benefits before her death (Kendall died intestate in 2014). 

When Kendall died, she had a fifty percent interest in a house in Massachusetts and a portion of it was recoverable by MassHealth under Massachusetts law. In 2018, one of Kendall's heirs filed a petition for late and limited formal testacy and notified MassHealth. MassHealth then informed petitioner's counsel that it would file a notice of claim in the estate. 

The personal representative of the estate informed MassHealth that she could not pay the claim since more than three years had passed since Kendall's death and MassHealth objected.

The Massachusetts Supreme Judicial Court held that although there are exceptions to ultimate time limitations on estates, no such exceptions apply to this particular claim. Massachusetts personal representative power to pay claims is extinguished after three years, with no exceptions. 

See Massachusetts Supreme Judicial Court: Personal Representative’s Power To Pay Claims Extinguished After Three Years, Probate Stars, January 4, 2021. 

January 12, 2021 in Current Events, Estate Administration, Estate Planning - Generally, Intestate Succession, New Cases | Permalink | Comments (0)

Monday, January 11, 2021

It’s Mother vs. Son in Britain’s Priciest Divorce War

DivorceTemur Akhmedov is not your average 27-year-old. Temur is being sued by his mother, Tatiana Akhmedova, for nearly $100 million in cash and assets. Temur's parents have divorced and Tatiana feels that her son has been shielding his father's—her ex-husband— assets. 

Ms. Akhmedova is attempting to gain a share of the $615 million divorce settlement, which is believed to be the largest in Britain's history. "Her ex-husband has refused to hand over a single ruble and has kept his money, and himself, far away from the United Kingdom and the reach of its courts."

Since Ms. Akhmedova has not been able to reach her husband or his assets, she got creative. Ms. Akhmedova sued her oldest son, Temur, a U.K. resident, putting his holdings within reach. 

As Temur's lawyers candidly put it, "[his father] showered Temur with unimaginable amounts of money." 

Included in the 27-year-old's assets are a three-bedroom apartment that is worth $40 million, a $460,000 Rolls-Royce S.U.V., Mercedes-Benzes and more. 

See David Segal, It’s Mother vs. Son in Britain’s Priciest Divorce War, N.Y. Times, January 5, 2021. 

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

January 11, 2021 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Non-Probate Assets | Permalink | Comments (0)

Sunday, January 10, 2021

Court Held That The Term “Spouse” In A Trust Meant The Primary Beneficiary’s Wife At The Time Of The Trust’s Execution And Not A Subsequent Wife

TrustIn Ochse v. Ochse, "a mother created a trust that provided that the trustee was authorized to make distributions to her son and the son’s spouse." 

When the trust was executed, the sone was married to his first wife. However, after the trust's execution, the son divorced and remarried. The son's children sued the son for breaching fiduciary duties as trustee. Both the son and his first wife filed motions for summary judgment. 

The son and the first wife were particularly focused on whether the term "spouse" in the trust agreement referenced the first wife or second wife.

The trial court found that "spouse" referenced the second wife, but the first wife appealed. The son and second wife argued that the term "spouse" referenced a class of the son's current wife at the time and not the first spouse specifically. 

The Court of Appeals disagreed finding that the term "spouse" should be construed to mean the spouse at the time of execution and not a future spouse.

See David Fowler Johnson, Court Held That The Term “Spouse” In A Trust Meant The Primary Beneficiary’s Wife At The Time Of The Trust’s Execution And Not A Subsequent Wife, Texas Fiduciary Litigator, January 3, 2021. 

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

January 10, 2021 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (1)

Saturday, January 9, 2021

Article on The Undesirability of the Rule in "Hardoon V Belilios"

Joseph Campbell recently published an article entitled, The Undesirability of the Rule in "Hardoon V Belilios", Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Estate planning

Effective from 22 November 2019, the New South Wales Parliament has abolished the rule in Hardoon v Belilios . That rule takes its name from the decision in 1901 of the Privy Council, delivered by Lord Lindley on appeal from Hong Kong, in Hardoon v Belilios. The rule requires that a beneficiary of a trust who is sui juris and absolutely entitled to the trust property has a personal obligation to indemnify the trustee for liabilities incurred in the proper administration of the trust, unless he could show some good reason why the trustee should bear them personally. This personal liability of the beneficiary is additional to the right of indemnity from the trust assets that the trustee has, both under the general law and under statute. .

This paper presents reasons why jurisdictions other than New South Wales should abolish the rule. Part 1 outlines the decision in Hardoon v Belilios, and the rule formulated in it. Part 2 argues that Lord Lindley’s decision was not justified by the cases on which his Lordship based it. Part 3 presents arguments for the abolition of the rule. They are that there are problems of unfairness and arbitrariness in the application of the rule, that the justification of principle that Lord Lindley gave for it is not acceptable, and that there are unresolved problems concerning the application of the rule.

January 9, 2021 in Articles, Current Events, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Wednesday, December 30, 2020

Pennsylvania Supreme Court: Settlor Must Prove Elements Of Common Law Fraud to Void Irrevocable Trust Based On Fraudulent Inducement

TrustIn In Re Passarelli Family Trust, the Pennsylvania Supreme Court held that "an irrevocable trust based on fraudulent inducement pursuant to 20 Pa.C.S. § 7736, a challenging settlor must prove the elements of common-law fraud by clear and convincing evidence." 

Margaret and Joseph Passarelli had two children. In 2015, Joseph met with an attorney (Perna) to begin the estate planning process. In the same year Joseph and Margaret met with Perna to continues estate planning discussions that ended with the couple creating the Passarelli Family Trust. Margaret wanted to make sure that the assets accumulated during their marriage stayed in the family. In the event of Joseph ever being remarried, Margaret wanted to ensure that the assets remained with the children from their marriage. 

The Trust contained assets that totaled to an estimated $13 million, which included two real estate property companies, Japen Holdings, LLC, and Japen Properties, LLP. Included in Japen's assets were two Florida properties, which Margaret did not know about. Although Japen was in the inventory of assets, the properties were not listed. 

After the Trust was created, Margaret discovered that Joseph had been involved in an affair and his "paramour" was living in one of the Florida properties. Margaret then attempted to terminate the irrevocable trust, mainly claiming fraudulent inducement. Margaret claimed that she was fraudulently induced to create the trust when Joseph did not disclose the Florida properties. 

In orphan's court, the court found that Margaret had proven fraudulent inducement by clear and convincing evidence, but the Superior Court reversed holding that Margaret failed to meet her burden. 

The Pennsylvania Supreme Court held that a settlor must show the elements of common law fraud by clear and convincing evidence in order to prove fraudulent inducement and ultimately held that non-disclosure of the properties did not provide a basis for voiding an otherwise valid trust agreement. 

See Pennsylvania Supreme Court: Settlor Must Prove Elements Of Common Law Fraud to Void Irrevocable Trust Based On Fraudulent Inducement, Probate Stars, December 28, 2020. 

December 30, 2020 in Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Saturday, December 26, 2020

Ohio Supreme Court: Interest Under Will Eliminated If Beneficiary Witness Is Necessary To Establish Validity Of Will

Estate planningIn In re Estate of Shaffer, the Ohio Supreme Court held Ohio's voiding statute "applies to both wills executed in compliance with formal requirements and those that fail to adhere to them." 

In 1967, Joseph Shaffer executed a formal will which stated that if his wife died before him, his estate would pass to his two sons, Mark and Terry, through trust. Joseph's wife died before him and he died in 2015. The probate court then admitted the 1967 will to probate. 

Juley Norman filed a claim against the estate and attached a copy of a note written on a notecard that was signed by Joseph Shaffer. However, there were not any other signatures on the notecard. The notecard bequeathed 1/4 of the estate to Juley Norman and appointed Terry as executor. 

The Ohio Probate Court held that the handwritten notecard was not a valid will. An Ohio appellate court reversed the decision of the probate court and admitted the notecard will, honoring the bequest to Juley. The Ohio Supreme Court held that Ohio's voiding statute applies to wills executed in compliance with formal requirements and those that are not. 

The Ohio Supreme Court ultimately found that the probate court rules correctly when they applied Ohio's voiding statute and determined that Juley Norman "as a beneficiary witness who was necessary to establish the validity of the will under Ohio law, could not be included in the list of beneficiaries of Joseph Shaffer’s estate." 

See Ohio Supreme Court: Interest Under Will Eliminated If Beneficiary Witness Is Necessary To Establish Validity Of Will, Probate Stars, December 21, 2020.

December 26, 2020 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Tuesday, December 22, 2020

Virginia Supreme Court: The Term “Fair Market Value” In Codicil Provides No Certainty As To Price

WillsIn Wilburn v. Mangano, the Virginia Supreme Court considered whether an "option to purchase decedent's tea; property at 'fair market value' provided sufficient certainty as to the sale price to warrant specific performance of a contract for sale." The case was decided on December 10, 2020. 

Jeanne Mangano executed a will in which she left her residence to her three daughters, ("the sisters"). Jeanne granted her son Anthony, an option to purchase the Property from his sisters (the "Option"). According to the will, Anthony could exercise the Option within one year from the probate of Jeanne's will, and at a purchase price equal to the Property's real estate tax assessment in the year of Jeanne's death. 

Jeanne executed a codicil afterwards which revised the purchase price "to an amount equal to the fair market value at the time of my death." Jeanne died in November 2005. 

Anthony decided to exercise the option to purchase and sent a letter to his sisters that was meant to give them legal notice of his intent to exercise the option. The Sisters then filed suit to compel Anthony to purchase the property. "The Sisters obtained two appraisals of the fair market value of the Property as of Jeanne’s death — one valuing the property at $311,000, and the other at $270,000." 

Anthony claimed that there was no enforceable contract because fair market value as of the date of Jeanne's death is not "a sufficiently specific term to establish mutual assent to the Property's purchase price." The circuit court agreed. 

In Virginia, "fair market value" means the price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm's-length transaction." 

The Virginia Supreme Court held that because there was no certainty as to the price set forth in the codicil, along as no way to ascertain it with sufficient certainty, the circuit court decided correctly.

December 22, 2020 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)