Wills, Trusts & Estates Prof Blog

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

Thursday, October 29, 2020

Estate of late Holocaust survivor sues 'Borat' creators

"The estate of a recently deceased Holocaust survivor filed a lawsuit to keep her interview out of Sacha Baron Cohen’s upcoming “Borat” movie, saying she thought the film was a serious documentary."

Creator of "Borat" approached Judith Dim Evans, who passed away this summer, to talk about the Holocaust. It turns out, Evans agreed to the interview under the impression that "Borat" was a serious documentary and not a comedy. This lead to her estate filing a lawsuit this week in Fulton Superior Court. 

Ms. Evans was reportedly "horrified and upset" to find that the movie was intended to "mock the Holocaust and Jewish culture." 

The estate claims that Ms. Evans would not have agreed to the interview if she had known of the true purpose behind it and nature of the film for which it would be used. 

The estate is seeking for the scene including Evans' interview be removed from the film, as well as damaged less than $75,000. 

See Elizabeth Rosner, Estate of late Holocaust survivor sues 'Borat' creators, Apple News, October 14, 2020. 

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

October 29, 2020 in Current Events, Estate Planning - Generally, New Cases, Television | Permalink | Comments (0)

Wednesday, October 28, 2020

Billionaire Robert Smith Admits He Cheated On Taxes For 15 Years

TaxRobert F. Smith, is known as a "brilliant investor who built Vista Equity Partners into a private equity powerhouse and a generous philanthropist lauded for paying off student debt of Morehouse College's entire graduating class last year." 

However, on Thursday, federal prosecutors claimed that Smith concealed income and evaded taxes for 15 years. 

Smith avoided prosecution by cooperating in a case against Robert Brockman, who was has been accused of using a "web pf Caribbean entities to hide $2 billion in income in what prosecutors called the largest U.S. tax case ever against an individual."

Smith admitted that he repeatedly made false filings with the IRS, even after he attempted to enter an amnesty program in 2014. Smith has signed a non-prosecution agreement and has also agreed to pay more than $139 million in back taxes, interests and penalties. 

"Smith admitted that he used $2.5 million in untaxed funds to buy and renovate a vacation home in Sonoma, California, paying for it in 2005 with private equity funds deposited into accounts in the British Virgin Islands and Banque Bonhote in Switzerland."

"In 2014, Smith directed Excelsior to contribute $182 million in shares in a Nevis-based entity, Flash Holdings LLC. The shares went to Fund II Foundation, a U.S.-based charity that he co-founded. Smith falsely claimed that he’d been required to make that charitable contribution as part of his original agreement with Brockman. Had it been true that the offshore assets had always been designated for charity, it could have supported the view that Smith didn’t owe taxes on them." 

There are also many other instances where Smith used funds to build homes and other properties using money he concealed from the IRS. 

See Neil Weinberg & David Voreacos, Billionaire Robert Smith Admits He Cheated On Taxes For 15 Years, Financial Adviser Magazine, October 16, 2020. 

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

October 28, 2020 in Current Affairs, Current Events, Estate Planning - Generally, Income Tax, New Cases | Permalink | Comments (0)

Friday, October 9, 2020

Rubin on Probate Litigation: Demircan v. Mikhaylov

TrustThe primary focus in Demicran v. Mikhaylov was the ability to modify an irrevocable trust under the Florida common law. The settlor had established an irrevocable trust for the benefit of his children, "which initially appointed an independent trustee and a third party with trustee removal powers." Disagreements eventually arose between the settlor and the beneficiaries against the trustee and third party. 

Before the final hearing, the third party appointed a new trustee to serve as an independent trustee. At the final hearing, noting the consent of the settlor and beneficiaries, the court allowed a modification of the trust. 

The court considered whether the new trustee had standing to appeal this modification, ultimately finding that the new trustee had a "sufficient stake in the controversy to seek judicial resolution..." The court also considered whether the third party was indispensable to the action. The court found that the third party was not indispensable, reasoning that there was a "complete and efficient determination of the equities and rights between the other parties was possible without the third party..."

The court ultimately held that the modification of the trust is appropriate if the settlor and all of the beneficiaries agree to modify the trust, Florida common law will permit the modification. 

"Finally, the Court reversed the trial court's denial of attorney's fees to the trustees because the trial court failed to make the requisite finding of bad faith or reckless indifference which the trust itself required."

See Rubin on Tax:Demircan v. Mikhaylov , Rubin on Probate Litigation, September 25, 2020.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

October 9, 2020 in Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Thursday, October 1, 2020

Daughter Liable for Interfering with Stepmother’s Inheritance

Woman-with-HandThe tort of intentional interference with expected inheritance (IIEI) has been recognize as a legal claim in California since 2012. The Third District Court of Appeal in Sacramento issued the first published opinion in California that affirmed the 2012 judgment in favor of a plaintiff. (Important note: The Texas Supreme Court has expressly rejected this claim). 

Frank Gomez married Beverly Gomes and had four children. After six decades, Beverly died and Frank rekindled an old flame with Louise, whom he married in 2014. 

Before Frank's death in 2016, he amended his trust to give Louise a life estate in the house they shared together. When Frank asked his daughter, Tammy, how she felt about this, she expressly disagreed. 

Shortly ( about 6 days) before his death,  a new attorney, Aanestad, came to meet with Frank. Aanestad testified that Frank stated he wanted his estate to pass to Louise and then to his children following her death. 

Frank never saw the new trust documents before he died on August 21, though Aanestad tried to meet with Frank on August 20 but was kept out. 

Judge Wood of the trial court found the testimony of Aanestad credible and unbiased and found that Frank would likely have signed the documents if not for his children interfering.

"The judge imposed a constructive trust over the assets that would have gone into the new trust to be held by Louise as trustee until her death pursuant to the terms of the unsigned trust."

The Court of Appeal affirmed the judgment finding that substantial evidence existed that Louise expected an inheritance in the form of the new trust and Tammy knew about this expectation. 

"While these facts are unusual, the case illustrates when and how intentional interference with expected inheritance claims can be successful in California courts and may lead to the more frequent assertion of such claims. While each case will have its own strengths and weaknesses, California law has evolved from a cautious initial recognition of IIEI claims in the Beckwith case to the vindication of a spouse’s claims in the Gomez case."

See Jeffrey S. Galvin, Daughter Liable for Interfering with Stepmother’s Inheritance, Downey Brand: Trust on Trial, September 28, 2020. 

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

October 1, 2020 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Indiana Court of Appeals: Dead Man’s Statute Alive and Well in Trust Dispute

TrustIn Bergal v. Bergal, the Indiana Court of Appeals concluded that the Dead Man Statute still applies, however, with limitations. Milton Bergal had four children from a precious marriage. In 2009, Milton married Linda and created a new estate plan in the same year. 

In this new estate plan, Milton created a trust and executed a "new pour-over will - such that upon his death, all assets in his probate estate were to be transferred to his trust." 

Two subtracts would then be created from this trust:

  • Trust A: For Linda's benefit alone and she would be co-trustees with Milton's accountant
  • Trust B: Solely for the benefit of Milton's son, David, and David would be the sole trustee. 

Milton become sick with dementia and Alzheimer's disease. During this time, "six investment accounts were taken out of the trust and modified so that Linda was named the primary beneficiary." Linda used power of attorney to perform one of these, but Milton effectuated the other modifications.

Milton died in 2016, leading to the discovery of the changes made to the trust assets. David sued Linda after she refused to transfer the rest of the assets back to the trust. 

The trial court decided in David's favor and Linda appealed. 

The Indiana Court of Appeals did an analysis of the Dead Man Statute stating:

"it applies in suits or proceedings (a) in which an executor or administrator is a party; (b) involving matters that occurred during the lifetime of the decedent; and (c) where a judgment or allowance may be made or rendered for or against the estate represented by the executor or administrator." and also that "when the Dead Man’s Statute applies, a person who is a necessary party to the case and whose interest is adverse to the estate is not a competent witness as to matters against the estate."

The Court of Appeals held that the Statute did apply to Milton's trust because it was "central" to his estate plan making it "akin to the estate itself."

See Sarah Jenkins & Jason M. Rauch, Indiana Court of Appeals: Dead Man’s Statute Alive and Well in Trust Dispute, Faegre Drinker, September 29, 2020.

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

October 1, 2020 in Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Sunday, September 20, 2020

Billionaire Aldi Family Fortune To Hit German Court As Son Sues Mother For Embezzling Funds: Reports

TheoTheo Albrecht, cofounder of Aldi supermarket, passed away in 2010 and was ranked the 31st richest person in the world that same year. Albrecht's grandson Nicolay Albrecht has accused his mother Babette Albrecht and his three sisters of embezzling money from the trust. 

Nicolay Albrecht has has brought the action to a German court where the family members will argue over the fortune. Nicolay alleges that his mother and sisters have withdrew millions from a family trust that holds the family fortune. 

Nicolay's father, Berthold Albrecht was the beneficiary of the trust before his death in 2012. Babette is the widow of Berthold. 

"The conflict, which has been through many chapters, pits the cost-conscious elders who built Aldi against the younger generation who inherited the wealth."

Berthold's brother, Theo Jr., has already accused Babette and her children of "helping themselves to the assets" in the past. An alleged $88 million had already been withdrawn from the foundation in 2013, 2014, and 2015.

It appears that the elder generation felt that the younger, money-hungry generation, is disrupting the philosophy that the Albrecht family founded its success on. 

See David Dawkins, Billionaire Aldi Family Fortune To Hit German Court As Son Sues Mother For Embezzling Funds: Reports, Forbes, September 20, 2020. 

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

September 20, 2020 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Sunday, September 13, 2020

Women cut off her own hand for insurance payout

FraudA 22-year-old woman was sentenced to two years in prison by a court in Slovenia for intentionally cutting off her hand to make a fraudulent insurance claim. The woman used a circular saw to cut off her hand. 

The woman, Julija Adlesic, agreed with her boyfriend to cut her left hand above the wrist early last year. About a year earlier, she had signed contracts with five different insurance companies. She would have collected more than 1 million euros. 

The woman's boyfriend was sentenced to three years in prison. 

The story that the family told the hospital is that the woman accidentally injured herself while sawing branches. "Authorities said they left the severed hand behind rather than bringing it to the hospital to ensure the disability was permanent. But police recovered and it was reattached."

At the trial, the woman claimed she was innocent and would never intentionally cut off her own hand. 

“No one wants to be crippled,” she told the court. “My youth has been destroyed. I lost my hand at the age of 20. Only I know how it happened.”

See Women cut off her own hand for insurance payout , Fox News, September 12, 2020. 

September 13, 2020 in Estate Planning - Generally, New Cases | Permalink | Comments (0)

Friday, August 28, 2020

Court-ordered timelines must be respected, even in a pandemic: A discussion of Lima v Ventura (Estate of), 2020 ONSC 3278

CourtMany aspects of the legal process have changed dramatically in the wake of COVID-19. However, one thing has remained intact, procedural timelines set out in court orders. 

In the Canadian case Lima v. Ventura (Estate of), an applicant attempted to extend a court-ordered deadline for his purchase pf the deceased home. However, the court denied the extension on the grounds that the appellant failed to present "persuasive evidence" in support of the request. The court made clear that the court-ordered deadlines "are to be respected."

Justice Emery emphasized that a moving party must present persuasive evidence that the pandemic (COVID-19) "presented circumstances and reasons that frustrated or prevented compliance with the order in question. 

The Court also laid out a list of factors to consider on motions related to delays due to COVID-19 that could justify altering a court-ordered deadline:

  1. The steps not taken were necessary to carry out the terms of any order, and no other alternative to taking those steps would have served that purpose;
  2. The steps were not taken because of the moving party’s inability to access business, professional or institutional offices physically or electronically because of COVID-19 protocols;
  3. An extension of time would not be contrary to any law, or the rights of other person under an order of any court;
  4. A reasonable explanation is provided for not taking the required steps, or why it was difficult or impossible to comply with the order for COVID-19 related reasons;
  5. The moving party has made best efforts to otherwise comply with the order, and all other terms of the order that were not impeded by the COVID-19 protocols have been met; and
  6. The moving party has acted in good faith.

In this case, appellant failed to provide the requisite evidence to meet the requirements of a court-ordered deadline extension. 

See Kathryn McCulloh, Court-ordered timelines must be respected, even in a pandemic: A discussion of Lima v Ventura (Estate of), 2020 ONSC 3278, Dentons Commercial Litigation Blog (Canada), August 20, 2020.

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

August 28, 2020 in Current Affairs, Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Wednesday, August 26, 2020

South Dakota Supreme Court: Partition Upheld Where Deed Severs Joint Tenancy Of Husband And Wife

JtIn Moeckly v. Hanson, the South Dakota Supreme Court upheld a partition judgment against a surviving spouse where a corrective deed executed by the couple failed to contain express language of joint tenancy and thus created a tenancy in common. 

Sharon and Bennett Hanson were married in December 1994. "On the day they married they entered into an antenuptial contract, which stated: In the event of death of either party, any property, real or personal, jointly held by the parties acquired either prior to marriage or thereafter, shall be that of the survivor."

In 1996, the couple purchased real property in South Dakota, as "joint tenants with right of survivorship and not as tenants in common". This was the lot 13 property. 

In 2006, the couple bought another property in which the deed did not contain any joint tenancy language. 

In April 2007, Thompson, a South Dakota attorney, drafted a warranty deed for Hanson and Sharon that conveyed one of the plots to themselves. This deed also did not contain any language that it would be held as joint tenants. 

Sharon passed away in February 2017. 

Sharon's son and granddaughter were appointed as personal representatives of Sharon's estate in Iowa. Sharon's will stated, "I give, devise and bequeath my one-half interest in and to my current residence which is located at 32193 Ponderosa Drive, Burbank South Dakota, to my children, . . . in equal shares, share and share alike, they to have and to hold the same absolutely and forever in fee."

The personal representatives brought a partition action to have the Lot 13 Property sold and the proceeds split evenly between the estate and Hanson. After a partition hearing, the South Dakota circuit court held that the corrective deed terminated the joint tenancy and created a tenancy in common.

Because the partition was "impractical" there circuit court ordered the property sold and the proceeds divided between the one-half interests held by Hanson and Sharon's estate. 

See South Dakota Supreme Court: Partition Upheld Where Deed Severs Joint Tenancy Of Husband And Wife, Probate Stars, August 12, 2020.

August 26, 2020 in Estate Planning - Generally, New Cases | Permalink | Comments (0)

Thursday, August 13, 2020

New York Surrogate’s Court Reviews Will Contest Basics In Granting Summary Judgment Against Will Challenger

SjIn Matter of Tsinopoulos, the Rockland County Surrogate's Court showed that "it is possible to defeat a New York will contest on summary judgment."

Pat Tsinopoulos passed away in 2015 and was survived by a son and a daughter. Her daughter was the petitioner in the case while her son was the objectant. 

Petitioner found a will in a chest in decedent's bedroom about a month after decedent's death. The Will was "a two-page pre-printed form with blanks for the testator to fill in." The Will leaves a majority of the estate to the petitioner, aside form an $11,000 bequest to Objectant. 

After Petitioner offered the will for probate, Objectant challenged the will arguing " (i) the failure to adhere to proper execution formalities of EPTL 3-2.1 (ii) lack of testamentary capacity and (iii) fraud and undue influence." After discovery, Petitioner moved for summary judgment. Objectant opposed the motion, asserting that there was a genuine issue of material fact that remained unsolved.

Petitioner denied playing any part in preparing the Will or writing anything on the will. Petitioner also argued that she provided the original document to her attorney without altering it. 

In the opinion, the court provided a detailed overview of the analysis for summary judgment in a New York will contest, which is as follows:

First, the proponent of the will must introduce facts showing both due execution and the competency of the testator.

To defeat the motion, the Objectant must either (1) identify material facts that contradict the showing on due execution or competence; or (2) identify material facts that tend to show undue influence, fraud and/or coercion.

The allegations must not be mere conclusions, but should be specific and detailed.

The New York Surrogate Court granted Petitioner's motion for summary judgment, holding that the will was duly executed and that the decedent "possessed the basic requisite testamentary capacity. . ." 

See, New York Surrogate’s Court Reviews Will Contest Basics In Granting Summary Judgment Against Will Challenger, Probate Stars, July 29, 2020.

August 13, 2020 in Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)