Justia Trusts & Estates Opinion Summaries

Yolanda M. Currier and James M. Currier were married in 2000, and Yolanda filed for divorce in 2017. The divorce judgment, entered in 2019, awarded Yolanda sole parental rights and responsibilities for their three children, child support, spousal support, and half the value of James’s employee stock plan and 401(k) account. James was found to have committed economic misconduct by cashing in stocks and taking loans against his 401(k) during the divorce proceedings.The District Court (South Paris) found James in contempt multiple times for failing to comply with the divorce judgment. In 2023, Yolanda filed a fifth motion for contempt, asserting that James failed to provide an accounting of his stocks and did not file a proposed qualified domestic relations order (QDRO) for the division of his 401(k) account. The court found James not in contempt regarding the stock division, concluding that Yolanda did not prove James owned stocks. However, the court found James in contempt regarding the 401(k) account, valuing it at $7,000 and awarding Yolanda $3,500.The Maine Supreme Judicial Court reviewed the case and found that the District Court erred in its findings. The Supreme Judicial Court concluded that Yolanda met her burden of proving James’s noncompliance with the stock accounting and division order. The court also found that the District Court erred in valuing the 401(k) account at $7,000, as this figure excluded the value of loans taken against the account, contrary to the divorce judgment’s provisions.The Maine Supreme Judicial Court vacated the District Court’s judgment and remanded the case for further proceedings consistent with its opinion, noting James’s pattern of noncompliance and suggesting the consideration of punitive sanctions if his contumacious conduct continues. View "Currier v. Currier" on Justia Law

Two business partners, Anthony Bertucci and Eugene Watkins, developed low-income housing projects through various entities. Bertucci provided funding, while Watkins managed the projects. Watkins managed the entities' funds through a separate account, which led to concerns about mismanagement and personal use of funds. After Bertucci's health declined, his son Christopher, acting under power of attorney, discovered potential mismanagement and removed Watkins from his roles. This led to a legal dispute involving claims of breach of fiduciary duty and other violations.The probate court granted summary judgment in favor of Watkins on all claims. Bertucci, represented by his son Christopher as executor of his estate, appealed. The Court of Appeals for the Third District of Texas reversed the summary judgment on some claims, finding fact issues regarding fiduciary duties and limitations, but affirmed the judgment on the derivative claims, concluding that Bertucci failed to adequately brief those claims.The Supreme Court of Texas reviewed the case and held that the Court of Appeals erred in concluding that Bertucci waived his appeal on the derivative claims due to inadequate briefing. The Supreme Court also found that the Court of Appeals erred in holding that fact issues precluded summary judgment on Bertucci's individual breach-of-fiduciary-duty claims. However, the Supreme Court agreed with the Court of Appeals that fact issues precluded summary judgment on Watkins's limitations defense and correctly resolved disputes regarding an expert report and the Dead Man's Rule. The Supreme Court reinstated the probate court's summary judgment on the individual breach-of-fiduciary-duty claims and remanded the case to the Court of Appeals to address the derivative claims. View "Bertucci v. Watkins" on Justia Law

Sidney and Brian Harchelroad, officers of Harchelroad Motors, Inc. (HMI), obtained loans from Waypoint Bank and Western States Bank, signing promissory notes individually and as officers. Sidney and Brian were accommodation parties, meaning they did not personally benefit from the loan proceeds. Sidney died in 2018, and his wife, Carol, was appointed as personal representative of his estate. Waypoint and Western filed claims in Sidney’s estate for unpaid promissory notes, which were allowed. Brian also filed a contingent claim against Sidney’s estate, stating he would seek contribution if he paid more than his share of the debts. Brian died in 2019, and his wife, Michelle, was appointed as personal representative of his estate.Waypoint and Western filed claims in Brian’s estate. Michelle, individually, paid the banks and took assignments of their rights. She then sought contribution from Sidney’s estate for one-half of the amounts paid. The county court largely granted her request, finding that the notes were not extinguished by her payments or the assignments.The Nebraska Supreme Court reviewed the case. It held that the notes were not extinguished by the judgments against Brian or by Michelle’s payments, as the agreements with the banks were assignments, not payments in full. The court affirmed the county court’s decision, requiring Sidney’s estate to pay Michelle, individually, $459,559.51 for the Waypoint note and $291,263.20 for the Western note, and $300,000 to Brian’s estate for his payments to Western. The court found that Michelle, as an assignee, had the right to seek contribution from Sidney’s estate, and that the proportionate share was correctly determined as one-half, given the joint and several liability of Sidney and Brian. View "In re Estate of Harchelroad" on Justia Law

The plaintiffs, two grandchildren and a friend of the decedent, Wisniewski, filed a lawsuit against the defendant attorney, alleging professional negligence and breach of contract in the preparation of Wisniewski's will. They claimed that Wisniewski intended for his TD Ameritrade account to be distributed equally among five individuals, including the plaintiffs, but due to the defendant's failure to ensure the account's beneficiary designation was changed, the entire account was distributed to Wisniewski's daughter, the sole designated beneficiary.The trial court dismissed the professional negligence claim, ruling that the plaintiffs lacked standing because Connecticut law only allows third-party beneficiaries to sue attorneys for errors in drafting or executing a will, not for failing to change a beneficiary designation. The court later dismissed the breach of contract claim, finding it functionally identical to the dismissed negligence claim.The Connecticut Supreme Court reviewed the case. It agreed with the trial court that the plaintiffs did not allege a drafting error in the will. However, it concluded that public policy supports holding attorneys liable for failing to advise clients about the need to change beneficiary designations to effectuate their estate plans. The court held that the plaintiffs had standing to sue for professional negligence based on the defendant's failure to advise Wisniewski about the implications of the beneficiary designation on his estate plan. The court did not recognize a duty for attorneys to ensure that clients actually change beneficiary designations.The court affirmed the dismissal of the breach of contract claim, agreeing that the allegations did not sound in breach of contract but were essentially the same as the dismissed negligence claim. The case was remanded for further proceedings on the professional negligence claim related to the failure to advise. View "Wisniewski v. Palermino" on Justia Law

Decedent and Burnsed were married in 1997, and in 1998, Decedent named Burnsed as the primary beneficiary of his life insurance policy. They divorced in 2002, and the divorce decree did not address the life insurance policy. Decedent maintained the policy until his death in 2017 without changing the beneficiary designation. Decedent's son and brother filed a lawsuit claiming the policy proceeds, arguing that South Carolina Probate Code section 62-2-507(c) revoked Burnsed's beneficiary status upon divorce.The Circuit Court denied Respondents' motion for summary judgment, holding that the statute did not apply retroactively and granted Burnsed's motion for summary judgment, finding the legislature did not intend for the statute to apply to divorces before its effective date. The Court of Appeals reversed, holding that section 62-2-507(c) revoked Burnsed's designation because Decedent died after the statute's effective date, and Burnsed had no vested interest in the policy until Decedent's death.The South Carolina Supreme Court reviewed the case and affirmed the Court of Appeals' decision as modified. The Court held that section 62-2-507(c) applies to governing instruments executed before the statute's effective date if the decedent's death occurred after the effective date. The statute's presumption of revocation upon divorce applied to Decedent's life insurance policy, revoking Burnsed's status as the primary beneficiary. The Court concluded that the statute did not apply retroactively but prospectively from its effective date, effectuating Decedent's presumed intent. View "Estate of Meier v. Burnsed" on Justia Law

In 2002 and 2009, the town of Pembroke recorded tax liens against property owned jointly by Brian E. Priest and his wife, Lisa C. Priest. The Priests paid the delinquent taxes, and the town discharged the liens through "municipal quitclaim deeds." After Brian died intestate, a dispute arose among his heirs regarding whether the tax liens had severed the joint tenancy, thus terminating Lisa's right of survivorship.The Penobscot County Probate Court denied Lisa's petition to reform the municipal quitclaim deeds to reflect that the property remained in joint tenancy. The court found no evidence of the transferor's intention at the time the deeds were drafted and dismissed the petition. The court did not address Lisa's alternative request for a declaration that the property was not an asset of the estate.The Maine Supreme Judicial Court reviewed the case and concluded that the joint tenancy was not severed because the town never foreclosed on either tax lien mortgage. The court held that the municipal quitclaim deeds served only to discharge the liens and did not affect the joint tenancy. Consequently, Lisa's right of survivorship remained intact. The judgment of the Probate Court was vacated, and the case was remanded for further proceedings consistent with this opinion. View "Estate of Priest" on Justia Law

Little Hearts Marks Family II L.P. ("Little Hearts") was a member of 305 East 61st Street Group LLC, a company formed to purchase and convert a building into a condominium. 61 Prime LLC ("Prime") was the majority member and manager, and Jason D. Carter was the manager and sole member of Prime. In 2021, the company filed for bankruptcy and sold the building to another company created by Carter. The liquidation plan established a creditor trust with exclusive rights to pursue the debtor’s estate's causes of action. Little Hearts sued Prime and Carter for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment, seeking damages for lost capital investment and rights under the Operating Agreement.The bankruptcy court dismissed all claims, ruling that they were derivative and belonged to the debtor’s estate, thus could only be asserted by the creditor trustee. The district court affirmed this decision.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the dismissal of the breach of fiduciary duty and aiding and abetting breach of fiduciary duty claims, agreeing that these were derivative and could only be pursued by the creditor trustee. However, the court vacated the dismissal of the breach of contract and breach of the implied covenant of good faith and fair dealing claims, determining that these were direct claims belonging to Little Hearts and could proceed. The unjust enrichment claim was dismissed as duplicative of the contract claims. The case was remanded for further proceedings consistent with this opinion. View "In re 305 East 61st Street Group LLC" on Justia Law

Attorney Barry Tarlow executed a will in 2005, with minor modifications in 2006, leaving his estate to be divided between his siblings, Barbara Tarlow Rapposelli and Gerald Tarlow. Gerald was to receive his share outright, while Barbara's share was to be placed in a trust, with David Henry Simon named as trustee. Barry Tarlow passed away in April 2021, and the will was admitted to probate in July 2021. Barbara and Gerald became executors of the estate, while Simon retained his role as trustee.Barbara and Gerald filed an ex parte petition in January 2022 to replace Simon as trustee and modify the trust terms, which was denied. They later filed a petition for final distribution of the estate in July 2022, stating that Barbara had disclaimed her share, leading to a redistribution of the estate. Simon objected, arguing that Barbara's disclaimer was improper and filed his own petition under section 11700, seeking distribution of Barbara's interest to him as trustee and to rescind Barbara's purchase of the Fidelity Fund's interest in the trust. The trial court sustained Barbara and Gerald's demurrer, ruling Simon lacked standing.The California Court of Appeal, Second Appellate District, Division Four, reviewed the case. The court held that Simon, as the named trustee, had standing under section 11700 to file a petition for distribution of the estate. The court found that Simon's claim to the estate assets as trustee made him a person entitled to distribution under the statute. The court reversed the trial court's order sustaining the demurrer and remanded the case for further proceedings consistent with sections 11700 et seq. and the opinion. View "In re Estate of Tarlow" on Justia Law

Mary Langbehn sued her son, Michael Langbehn, and his company, Langbehn Land and Cattle Co. (LL&C), alleging Michael breached his fiduciary duty as a co-trustee of his deceased father’s trust. Michael filed counterclaims for unjust enrichment and quantum meruit related to improvements he claimed to have made to real estate he leased from his father’s trust and Mary’s separate living trust. The circuit court granted summary judgment in favor of Mary on her claims and on Michael’s counterclaims. The court also removed Michael as a co-trustee and awarded Mary $513,796.94 in damages. Michael appealed.The Circuit Court of the Third Judicial Circuit in Beadle County, South Dakota, found that Michael had engaged in self-dealing and breached his fiduciary duty of loyalty to the credit trust by profiting from subleases. The court concluded that Michael failed to keep Mary reasonably informed and acted in bad faith. The court granted summary judgment on Mary’s claims and Michael’s counterclaims, and removed Michael as a co-trustee.The Supreme Court of the State of South Dakota reviewed the case. The court held that Michael did not engage in impermissible self-dealing because the trust instrument expressly allowed him to lease the land at below-market rates. However, the court found that genuine issues of material fact remained regarding whether Michael disclosed the subleases and additional income to Mary. The court reversed the summary judgment on Mary’s breach of fiduciary duty claims and the decision to remove Michael as a co-trustee, remanding for further proceedings. The court affirmed the summary judgment on Michael’s counterclaims for unjust enrichment and quantum meruit, as there was no evidence that Mary requested or agreed to pay for the improvements. View "Langbehn V. Langbehn" on Justia Law

An Indiana trust beneficiary sued the trustee, an Indiana bank, in an Indiana trial court over the disposal of trust property. The trust, which holds Illinois real estate, is governed by Illinois law and includes mostly Illinois beneficiaries. The trial court dismissed the action for lack of subject-matter jurisdiction, questioning the appropriateness of resolving Illinois-centered issues in Indiana.The Vigo Superior Court dismissed the case, agreeing with the trustee that Indiana lacked subject-matter jurisdiction because the trust was administered in Illinois. The Indiana Court of Appeals reversed this decision, ruling that the trial court had jurisdiction over the Indiana suit despite the trust's Illinois connections. The appellate court distinguished this case from In re Alford Trust, which held that Indiana courts lack jurisdiction over trusts administered exclusively in another state.The Indiana Supreme Court reviewed the case and held that the trial court has subject-matter jurisdiction over the dispute. The court clarified that Indiana superior courts have broad civil jurisdiction, including over trust disputes, and that venue provisions do not affect jurisdiction. The court disapproved of the Alford Trust decision for conflating jurisdiction with prudential concerns like venue and choice of law. The court noted that while the trial court has jurisdiction, it may still dismiss the case under doctrines like comity or forum non conveniens if appropriate. The Indiana Supreme Court reversed the trial court's dismissal and remanded the case for further proceedings. View "Tingley v. First Financial Bank" on Justia Law