Wills, Trusts & Estates Prof Blog

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

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 An alleged $88 million had already been withdrawn from the foundation in 2013, 2014, and 2015.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)

General Disinheritance Clause Defeats Omitted Child Claim Under California Probate Code

InheritanceHugh O'Brian, best known for his role as Wyatt Earp in the 1950's ABC Western television series, The Life and Legend of Wyatt Earp, died in September 2016. 

In Rallo v. O'Brian, the Court of Appeal of California, Second Appellate District, Division Three, the court considered claims raised by O'Brian's allegedly omitted children under the California Probate Code. One of the issue before the court was "whether a general disinheritance clause could defeat omitted child claims by unknown children born before the execution of a testamentary instrument."

O'Brian established the Hugh O'Brian Trust in January 1992. O'Brian married his long-time girlfriend Virginia in 2006. The Trust was mended multiple times and Virginia was the trustee of the Trust. 

O'Brian's death spurred inheritance litigation. "Adam, James Venverloh, Donald Etkes, and Kimberly Rallo brought claims seeking to receive an intestate share of O'Brian's estate as his unintentionally omitted children under section 21622 of the California Probate Code."

The trustee demurred to both Adam and Kimberly's separate petitions and Venverloh's jointly filed petition on the ground that the failed to state a claim for relief. "The trial court sustained the demurrers as to Kimberly and Adam with leave to amend, and they both filed separate petitions", while Venverloh and Etkers decided not to pursue their claims. 

Kimberly alleged that she was entitled as an omitted child to a share of O'Brian's estate equal to what she would have received if he had died intestate. Adam made the same argument. 

Omitted children are generally children who are born after the execution of a decedent's testamentary documents and who are not provided for in those documents. 

Kimberly and Adam argued that a general disinheritance clause cannot defeat an omitted claim under the California Probate Code, but can only defeat a claim brought by an unknown child born after the execution of a will or trust. The California appeals Court disagreed. 

There court found that, under California law, " a general disinheritance clause can be used to disinherit known and unknown children, born both before and after the execution of the testamentary documents, if the intent to exclude the children is shown in the documents."

See, General Disinheritance Clause Defeats Omitted Child Claim Under California Probate Code, Probate Stars, August 6, 2020.

August 13, 2020 in Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (1)

Wednesday, August 12, 2020

Pennsylvania Supreme Court: Parent With No Legal Duty To Support Deceased Child Does Not Forfeit Share of Intestate Estate

CashIn Estate of Small v. Small, the issue involved the alleged forfeiture of a parent's share in his child's estate where his child died without a will. The question before the Pennsylvania Supreme Court was "whether an adult decedent, who became disabled after reaching the age of majority, was a dependent child for purposes of the Pennsylvania Probate, Estates and Fiduciaries Code's forfeiture statute."

The decedent was 18 when he was shot and became a paraplegic. The decedent died almost twenty years later at the age of 37, with no spouse and no children. Decedent's mother was granted letters of administration. The decedent's estate was made up of only a $90,000 wrongful-death award. 

Decedent's mother filed a forfeiture petition, arguing that decedent's father forfeited his share of the estate by failing to perform his duty of support.

The main issue was whether decedent was considered a "dependent child". The evidence presented showed that decedent was able to perform all of the ordinary life activities, except for walking. Witness testimony provided showed that decedent was mostly self-sufficient.

The Pennsylvania Orphan's Court denied decedent's mother's petition for forfeiture, finding that decedent was not a dependent child. Decedent's mother appealed arguing that the Orphan's Court "narrowed the scope of the phrase 'dependent child'." The Superior Court affirmed and the Pennsylvania Supreme Court granted further review. 

The Pennsylvania Supreme Court affirmed, holding that the mother failed to demonstrate that the decedent was a dependent child and that the father had a duty of care. 

See, Pennsylvania Supreme Court: Parent With No Legal Duty To Support Deceased Child Does Not Forfeit Share of Intestate Estate, Probate Stars, July 31, 2020.

August 12, 2020 in Estate Planning - Generally, Intestate Succession, New Cases | Permalink | Comments (0)

Sunday, August 9, 2020

En Garde! A Trust’s Revocation Method May Not Be Enforced Unless It Explicitly States It’s the Exclusive Means of Revocation

Two-men-fencingCreators of trusts usually put a lot of time and effort into planning how their property should pass in the event of their death. Trustors or their lawyers typically use protective safeguards to shield themselves from their now indecision and undue influence should they become vulnerable. 

The California Legislature has codified its own "default" method of revocation, which allows "a trust to be revoked by a writing signed by the trustor and delivered to the trustee during the trustor’s lifetime." 

In Cundall v. Mitchell-Clyde (2020), the Second District Court of Appeals held that "for a trust’s revocation procedure to be the exclusive revocation method, it must expressly specify that it is the only such method."

John and Robert were neighbors in West Hollywood and met in 2007 and became friends. In February 2009, "John retained Frances -an attorney and fellow neighbor- to prepare a trust, naming himself as trustee, and Robert as the sole beneficiary and successor trustee." The trust contained a revocation procedure which allowed it to be revoked by delivering a written revocation to John and Robert. However, both John and Frances would then need to sign the document. 

John had a "falling out" with Robert, so he created a new trust in May 2009, which named his friends Vanessa and Ronald as beneficiaries. John also retained a new estate planning attorney, Paul, to prepare his trust. John executed the new trust including the revocation. The trust was not properly revoked under the trust's revocation procedure because Frances never signed the revocation.

Robert, Vanessa, and Ronald filed dueling petitions concerning the validity of the February trust and May trust. The Los Angeles Superior Court found that the February trust did not provide an exclusive means of revocation and that John's revocation was proper.

The Court of Appeal affirmed the trial court's decision. The court reasoned that the theoretical distinction between a “method” and “authority” was mere semantics, section 15401(a)(2) addresses the authority to revoke a trust anyway, and that its terms plainly provided that the default revocation method could be used unless the trust provided an “exclusive method of revocation.”

See Christopher Miles Kolkey, En Garde! A Trust’s Revocation Method May Not Be Enforced Unless It Explicitly States It’s the Exclusive Means of Revocation, Trust on Trial, July 29, 2020.

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

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

Friday, August 7, 2020

Co-Trustees Can Sue To Remove A Co-Trustee Due To Hostility

FdIn the Texas Court of Appeals case, Ramirez v. Rodriguez, three co-trustess used a fourth trustee to have him removed "due to his hostile actions: he has engaged in a pattern of creating hostility and friction that impeded and/or affects the operations of the trust."

The fourth trustee (defendant) moved to dismiss the suit,. however, the court of appeals affirmed the lower court's decision and denied the dismissal.

The court stated:

Sonia, Victor, and Javier sought to have Santiago removed as a co-trustee under section 113.082(a)(4) of the Texas Trust Code, which allows a trial court to remove a trustee based on a finding of “other cause for removal.” Tex. Prop. Code Ann. § 113.082(a)(4). “Ill will or hostility between a trustee and the beneficiaries of the trust, is, standing alone, insufficient grounds for removal of the trustee from office.” Akin v. Dahl, 661 S.W.2d 911, 913 (Tex. 1983). However, a trustee will be removed if his hostility or ill will affects his performance. Id. at 914. Furthermore, “[p]reservation of the trust and assurance that its purpose be served is of paramount importance in the law.” Id. For this reason, hostility that impedes the proper performance of the trust is grounds for removal, “especially if the trustee made the subject matter of the suit is at fault.” Bergman v. Bergman-Davison-Webster Charitable Tr., No. 07-02-0460-CV, 2004 Tex. App. LEXIS 1, 2004 WL 24968, at *1 (Tex. App.—Amarillo Jan. 2, 2004, no pet.) (mem. op.). Removal actions prevent a trustee “from engaging in further behavior that could potentially harm the trust.” Ditta v. Conte, 298 S.W.3d 187, 192 (Tex. 2009). “Any prior breaches or conflicts on the part of the trustee indicate that the trustee could repeat her behavior and harm the trust in the future.” Id. “At the very least, such prior conduct might lead a court to conclude that the special relationship of trust and confidence remains compromised.” Id.

See David Fowler Johnson, Co-Trustees Can Sue To Remove A Co-Trustee Due To Hostility, Winstead: Texas Fiduciary Litigation, July 25, 2020.

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

August 7, 2020 in Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Thursday, July 30, 2020

Idaho Supreme Court: Mom Owed Son Fiduciary Duties Under Trust Agreement

DutyIn Ferguson v. Ferguson, the Idaho Supreme Court addressed "the fiduciary duties of a trustee who has discretion to spend the trust's principal, the scope of records available to a trust beneficiary, and the enforceability of a trust instrument's no contest provision."

Roger and Sybil Ferguson created the Ferguson Family Revocable Trust in 1994. Their son Michael, was not included as a beneficiary in the original trust.

Roger died in 2012. The remaining assets were split between three sub-trusts. Sybil exercised her right to serve s trustee of the sub-trusts. In 2013, Sybil executed a Will and exercised power of appointment granted to her by the trust. This time, Sybil named Michael as a beneficiary, as well as various grandchildren. 

As a result of the new will, Michael became entitled to a share of the principal and undistributed net income remaining in the Survivor's Trust at the time of Sybil's death. As trustee of the Survivor's Trust, had the right to distribute as much of the principle as the trustee "may determine is necessary or advisable for any purpose" and as much of the principal as the surviving Grantor may request "for any reason."

Sybil died in 2015. Following Sybil's death, Michael requested financial information regarding the Original Trust and the sub-trusts dating back to Roger's death in 2012. A dispute arose over the scope of trust information available to Michael. 

The Idaho Supreme Court held that where a trustee maintains discretion to spend the trust's assets, the trustee is still subject to basic fiduciary duties under Idaho law. Also, fiduciary duties are not limited to those duties stated in a trust agreement. 

See Idaho Supreme Court: Mom Owed Son Fiduciary Duties Under Trust Agreement, Probate Stars, July 22, 2020. 

 

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