Wills, Trusts & Estates Prof Blog

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

Wednesday, January 16, 2019

Mandatory Restricted Depository Arrangements in Probate Questioned [Florida]

CourtFlorida statute dictates that when there is just cause a court can authorize that all of the assets of an estate be placed within a restricted depository account, which will only allow withdrawals with a court order. This protection against frivolous and unauthorized spending by the managing person or officer. Under Fla. Stats. §69.031(1), the appropriate reason would be "because the size of the bond required of the officer is burdensome or other cause." It is the word "other cause" that sent a recent case to the appellate level.

A number of counties opted to impose the restricted depository account on all estate cases within their jurisdiction in a form of blanket policy. It was not dependent on the financial restrictions or abilities of the guardian, executor, trustee, or other form of officer. The Fourth Court of Appeals ruled against the policy of mandatory restricted depository accounts, but did hold that the restricted depository order under appeal would stand as the facts of the case constituted it being appropriate.

If the court's opinion becomes final, there is a question of what counties that require a mandatory restricted depository account will do to be in compliance. Especially for the counties outside of the jurisdiction of the Fourth Court of Appeals.

See Charles Rubin, Mandatory Restricted Depository Arrangements in Probate Questioned [Florida], Rubin on Tax, January 9, 2019.

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

January 16, 2019 in Current Events, Estate Administration, Guardianship, New Cases | Permalink | Comments (0)

Article on More Moves in Constructive Trusts and Estoppel

Trusts2Martin Dixon recently published an Article entitled, More Moves in Constructive Trusts and Estoppel, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

Analyses the law of constructive trusts and its connection to statutory formalities, including the Pallant v Morgan equity.

January 16, 2019 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Monday, January 14, 2019

Police Investigating Theft of Assets from Aretha Franklin's Estate

ArethaIt appears that the drama of the late soul diva is continuing, with police in Chicago stating that there is an active theft investigation involving Aretha Franklin's mansion, and that it began before her death in August. It is also reported that the investigation involves someone using her funds inappropriately, but was unclear of how much.

Franklin's son Edward, 61, is also in a court battle with the estate in an effort to attain a court order for the estate to hand over monthly financial documents to her heirs. The estate is withholding the statements because it could allegedly have a negative impact on the criminal investigation of the missing assets.

The estate is also being audited by the IRS, claiming that the diva owed the Service more than $6.3 million in back taxes and $1.5 million in penalties. The estate is contesting the claim, stating there is a dispute over what was and was not income for the singer.

See Leah McDonald, Police Investigating Theft of Assets from Aretha Franklin's Estate, Daily Mail, January 11, 2019.

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

January 14, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Income Tax, Intestate Succession, Music, New Cases | Permalink | Comments (0)

Sunday, January 13, 2019

Deceased Millionaire's Family Sues After DNA Test Reveals Heir isn't Related

SwedenElis Gosta Hjukstrom, a resident of Vancouver that previously immigrated from Sweden, was a self-made millionaire through his import and distribution business in Canada. He passed away in 2017 of cancer at the age of 87, leaving his business and a family estate in Sweden to a Swedish man named Kenth Lundback that Hjukstrom called son, totaling a worth of $14 million.

Now Hjukstrom's extended family in Sweden has filed a civil suit against Lundback, claiming that he and his mother manipulated and deceived the millionaire for 50 years into believing the younger man was his son so as to compel Hjukstrom into bequeathing him his fortune. The suit came after a paternity test conducted after Hjukstrom's death revealed that he was not Lundback's father. In response, Lundback claims that Hjukstrom knew that he may not be his father, but still maintained a warm relationship that was "akin to a father/son relationship."

Hjukstrom hailed from a highly impoverished family, and in fact never knew his biological father, and two of his siblings were adopted out because his mother couldn't afford to care for them. He moved to Canada in 1957, but came back to visit family in Sweden regularly. In 1960, he had a romantic relationship with Ingrid Jonsson, Lundback's mother before heading back to Vancouver. In 1964, Hjukstrom wrote to Jonsson and told her of his entrepreneurial success, in which that she responded she had a young son born a few months after they had been together.

"If I am in fact Kenth's father, I will of course take responsibility," Hjukstrom wrote back. Ingrid responded that he was the father of her son, but also said "I don't think you need to tell anyone about it." Ingrid passed away in 2008, and both her and her son were included in Hjukstrom will as far back as 1966.

See Maryse Zeidler, Deceased Millionaire's Family Sues After DNA Test Reveals Heir isn't Related, CBC.ca, January 5, 2019.

Special thanks to Eric A. Chiappinelli (Frank McDonald Endowed Professor of Law, Texas Tech) for bringing this article to my attention.

January 13, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Saturday, January 12, 2019

Stock Trader, 45, Tried to Frame Daughter, 9, for Wife's Murder

RodRod Covlin was 36 years old when he allegedly murdered his estranged wife on New Year's Eve of 2009. Shele Danishefsky Covlin, who was 47 at the time of her death, was in the middle of divorcing Rod and had a meeting arranged the next day to have him written out of her will. Her body was found in the bathtub of her Manhattan apartment and due to the strict religious beliefs of her Jewish family, no autopsy was performed at the time. However, her body was exhumed in 2010 and the medical examiner determined that she had been strangled.

The prosecution alleges that in 2013, Rod wrote an Apple note pretending to be his daughter Anna that supposedly confesses to pushing Shele into the bathtub and causing her mother's death. Anna was 9 years old at the time and in fact was the one that found Shele's body at 7 a.m. 

After the autopsy, Shele's family filed a wrongful death suit against Rod, though he was still not yet charged with murder. The judge ruled that Rod was not able to gain any of the money left to him in the will, nor that of the trust for the children, Anna and Myles. The children were placed in the care of Rod's parents after worries that he was abusive to Myles. In 2015, Rod was recorded by a girlfriend hatching a plan to marry off Anna to a Mexican teenage boy for $10,000. His hope was that once Anna was married, she would technically no longer be a minor, and Rod would have access to the $4 million trust fund left to the children by Shele.

See Jennifer Smith, Stock Trader, 45, 'Tried to Frame Daughter, 9, for Wife's Murder,' Daily Mail, January 8, 2019.

Special thanks to Molly Neace for bringing this article to my attention.

January 12, 2019 in Current Events, New Cases, Trusts, Wills | Permalink | Comments (0)

Friday, January 11, 2019

George Steinbrenner’s Estate Gets a Big Tax Break

YankeesOn October 9, 2018, Manhattan Surrogate Court Judge Rita M. Mella ruled that a QTIP (qualified terminable interest property) marital trust does not fall under New York estate taxation if the surviving spouse was pre-deceased by a spouse who died in 2010. The New York State Department had 30 days after being served with the judgement and notice of settlement, and according to court records the Department decided not to appeal.

The ruling will have broad implications, especially for larger estates such as that of George Steinbrenner, long-time principal owner of the New York Yankees. His will set aside an undisclosed portion of his $1.1 billion fortune into a QTIP trust for his widow, Joan, who died in December of 2018. It was tasked to Steinbrenner's attorney, Robert Banker, to determine when the trust would pay the estate tax, or to wait until Joan's passing. Based on the court ruling, it looks like Joan Steinbrenner's estate won't pay a QTIP tax at all.

A big question is on what legal grounds the New York State Department of Taxation and Finance could appeal the decision, if it chose to do so. “They could appeal … on the ground that the surrogate did not apply the law correctly to the facts of this case, [but] the facts were undisputed,” the law firm that represented the estate that the opinion was in reference to.

See Joyce Blay, George Steinbrenner’s Estate Gets a Big Tax Break, Financial Advisor, December 26, 2018.

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

January 11, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, New Cases, Sports, Trusts | Permalink | Comments (0)

Thursday, January 10, 2019

Purple Rain Shower in California — Prince’s Estate Chases Northern California Law Firm

PrinceFamed musical artist Prince passed away three years ago without a will or any form of estate planning. In Minnesota, Comerica Bank & Trust was named as administrator of his estate and recognized his six siblings and half-siblings as the heirs. 

In 2017, a music engineer that collaborated with Prince in 2004-2008, George Boxill, allegedly conspired with others to sell unreleased music without the approval of the estate and Prince's company, Paisley Park, and litigation ensued. Boxill signed a confidentiality agreement before starting work that confirmed Prince and Paisley Park’s ownership of any recordings. In 2018, an arbitrator found that Boxill breached the Confidentiality Agreement and awarded Paisley and Comerica nearly $4 million in damages and attorneys’ fees.

After the arbitration, the representative amended the complaint to include two law firms that Comerica believed induced Boxill and the other defendants into breaches of the agreement and the intellectual property interests of the estate. One of the law firms, Sidebar Legal of Redding, California, defaulted on its subpoena and Comerica filed a motion to compel compliance in the U.S. District Court for the Eastern District of California.

On January 3, 2019, Magistrate Judge Kendall Newman transferred the motion to the federal court in Minnesota. As the probate process drags on, Comerica has a duty to defend the Estate’s valuable interests in Prince’s released and unreleased music.

See Jeffrey S. Galvin, Purple Rain Shower in California — Prince’s Estate Chases Northern California Law Firm, Trust on Trial, January 7, 2019.

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

January 10, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Music, New Cases | Permalink | Comments (0)

Sunday, January 6, 2019

2 Brothers Battle over Famed French Restaurant in Manhattan

FrenchrestSince 1962, La Grenoille has been serving celebrities and the elite of Manhattan's upper crust fine French dining. When the patriarch of the family passed away of cancer in 1975, Charles Masson, Jr took over the running of the business until 1993, and then again from 2000 to 2014 while his younger brother, Philippe, took care of their sick mother in France. During his time as manager, he instituted several changes that are believed to highly attribute to the restaurant's success, such as printing the menu in English and creating an upstairs area for less formal dining.

When their mother passed away in 2014, majority ownership of the restaurant went to Philippe. According to the older brother, Philippe micromanaged every aspect of the business and how Charles was running it. Charles decided to leave when the discord between the two brothers became too much. After all the years of running the restaurant, Charles was not given any stake in it, and he was regularly called "just an employee" by his brother.

Now, Charles is suing to become executor of his mother's estate and in essence take control of La Grenoille. He claims that Philippe increased his personal salary to over $400,000 and uses the income of the restaurant to finance his lavish lifestyle. He claims that the famed restaurant has suffered under his brother's management, generating only $100,000-$250,000 profit from its $8.4 million annual revenue. He also alleges that he has "grossly mismanaged" his mother's estate and regularly racks up high shopping bills at upscale stores. 

See Anneta Konstantinides, Long-Running Feud Between Two Brother New York's La Grenoille, Daily Mail, December 30, 2018.

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

January 6, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Thursday, January 3, 2019

Aretha Franklin Attorney: $3 Million in Back Taxes Paid to IRS

ArethaDavid Bennett, a representative for the estate of the late singer Aretha Franklin, said the estate has paid at least $3 million in back taxes to the IRS since her death in August. The estate is being audited by the Internal Revenue Service, claiming that the estate owes $6.3 million in back taxes from 2012 to 2018 and $1.5 million in penalties.

"We have a tax attorney. All of her returns have been filed," Bennett said. The estate is disputing the IRS's claims, saying that the agency is confused on what was consider Franklin's income and what was the extent of her expenses. Documents filed in court after Franklin's death did not mention the value of her estate, which could run into the tens of millions.

In 2008, the singer said an attorney's mistake caused her $700,000 mansion in Detroit to slip into foreclosure over $445 in 2005 taxes and late fees. The Detroit Free Press reported then that Franklin owed a total of $19,192 in back taxes on the property through 2007.

See Aretha Franklin Attorney: $3 Million in Back Taxes Paid to IRS, Fox News, December 28, 2018.

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

January 3, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Income Tax, New Cases | Permalink | Comments (0)

Wednesday, December 19, 2018

Summer Redstone Ordered to Have a Court-Appointed Guardian

RedstoneSummer Redstone, the 95-year-old controlling shareholder of CBS and Viacom, has been placed under a guardian, presumably because of a speech impediment. Los Angeles Superior Court Judge David Cowan said he was appointing a guardian because of Redstone's extreme difficulty in speaking. It is reported that Samuel Ingram, III has been offered the position, who was the court-appointed of Britney Spears after her unfortunate public mental health breakdown in 2008. In this instance, it does not appear that Redstone's mental capacity is at issue.

The court’s decision on Monday will have no effect on Redstone’s control of his trust, which owns almost 80% of voting stake in the two American media companies. His ownership and control will remain valid until he either dies or is incapacitated. If the latter occurs, the trust would then be overseen by seven trustees, including his daughter, Shari Redstone, and his grandson, Tyler Korff. Redstone has communicated that he approves of the appointment, which is family requested during his court battle with a former girlfriend.

Redstone amended his trust in 2015, removing his former girlfriend as a beneficiary. The ex, Manuela Herzer, claims Redstone’s mental abilities were diminished, which would thus invalidate the amended trust.

See Ariel Zilber, Summer Redstone Ordered to Have a Court-Appointed Guardian Because of a Speech Impediment, Weeks Before Ex-Girlfriend Take him to Court for Cutting her out of his Trust, Daily Mail, December 17, 2018.

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

December 19, 2018 in Current Events, Estate Administration, Estate Planning - Generally, Film, Guardianship, New Cases, Television, Trusts | Permalink | Comments (0)