Justia Trusts & Estates Opinion Summaries

Following the death of Daniel W. Bodmann, Sr., a dispute arose among his widow, Heather Holden-Bodmann, and his six biological and stepchildren, including Thomas E. Krouse, Jr. (Tom), over the administration of Bodmann Insurance—an estate asset—and the appointment of an executor for Dan’s estate. Dan’s holographic will named all seven children as executors and directed Andrea, one of the children, to maintain the insurance business. After Dan’s death, Andrea relied on Tom to help facilitate the transfer of the business’s clients, but conflict emerged between Tom and Heather regarding access to business records. The court found that Tom’s conduct toward Heather was aggressively disrespectful and contributed to a breakdown in cooperation, resulting in the decline of Bodmann Insurance.In the San Mateo County Superior Court, dueling petitions were filed for appointment as executor and special administrator. After an 11-day bench trial, Judge Buchwald found Tom’s behavior disqualified him from managing the business and denied his appointment as executor, citing his unwarranted aggression toward Heather and its detrimental impact on the estate asset. Interim orders limited Tom’s involvement in the business, allowed Andrea to run it, and later appointed Beth as special administrator and prospective executor after Dan, Jr. withdrew his request to serve.The California Court of Appeal, First Appellate District, Division Four, reviewed whether the trial court abused its discretion in finding Tom’s conduct amounted to mismanagement of the estate under Probate Code sections 8402(a)(3) and 8502(a), thus disqualifying him as executor. The appellate court affirmed the lower court’s order, holding that substantial evidence supported the finding that Tom’s aggressive and disruptive treatment of Heather “mismanaged” Bodmann Insurance, justifying his disqualification as executor. The orders denying Tom’s petition and limiting his participation in the business were affirmed. View "In re Estate of Bodmann" on Justia Law

A man managed his elderly mother’s finances and care after his father’s death. He was given power of attorney and access to her accounts. Over several years, he arranged for large sums to be transferred from her investment and checking accounts to support his struggling business. Additionally, he mortgaged significant parcels of the family’s farmland—held in his mother’s revocable trust—as collateral for loans used primarily for his benefit. Some of these financial moves occurred while his mother’s cognitive abilities were declining, and she was living in assisted care.After concerns about these transactions were raised by a family member, law enforcement investigated. The State charged the man with multiple counts of theft by exploitation of an elder under South Dakota law, related both to the mortgages and the transfers from his mother’s accounts. At trial in the Circuit Court of the Third Judicial Circuit, Spink County, a jury found him guilty on all counts. The circuit court imposed fully suspended penitentiary sentences and probation. The defendant appealed, arguing the evidence was insufficient to prove the elements of the crimes, and also objected to the jury instructions regarding his claimed good faith defense.The Supreme Court of the State of South Dakota reviewed the case. The court held that the evidence was sufficient for a rational jury to find that the defendant voluntarily assumed a duty to support his mother, was entrusted with her property, and appropriated her property for his own benefit with intent to defraud, not in the lawful execution of his trust. The court also determined that the jury was properly instructed on good faith and the State’s burden of proof. The Supreme Court affirmed the convictions. View "State v. Clemensen" on Justia Law

An elderly man with three children experienced a decline in health and mental capacity in his later years. After years of being cared for by one daughter, another daughter moved in, leading to significant family conflict. Shortly before his death, the man executed a new will, with the assistance of his attorney and after a medical evaluation confirmed his competency. This new will greatly favored one daughter over the others, and included a no-contest clause that would disinherit any beneficiary who challenged the will.After the man's death, the favored daughter, named as executor, admitted the will to probate. The other two children, feeling aggrieved by the changes, filed a lawsuit to set aside the will, alleging lack of testamentary capacity and undue influence by the favored daughter. A jury rejected their claims. When the executor filed the estate’s final report, the disfavored daughter objected, arguing that the no-contest clause should not apply because her challenge was made in good faith and with probable cause. The Iowa District Court for Clinton County overruled her objections, finding a lack of good faith and probable cause.On appeal, the Iowa Supreme Court clarified Iowa’s standards for avoiding enforcement of a no-contest clause: the challenger bears the burden to prove, under a totality-of-the-circumstances test, both subjective good faith and objective probable cause, as defined by the Restatement (Third) of Property. The court applied these standards de novo, giving deference to the district court’s factual findings, and concluded the appellant failed to meet her burden. Thus, the Supreme Court affirmed the district court’s enforcement of the no-contest clause and denial of the appellant’s objections to the final report. View "Felten v. Hoffman" on Justia Law

Corbin Damjanovich died in February 2024, leaving two adult children, Nicolette and Derek. After his death, Corbin’s sister, Tracy Barlow, and cousin, Carl Openshaw, petitioned for informal appointment as co-personal representatives of his estate in Yellowstone County, Montana. Subsequently, Nicolette and Derek discovered a handwritten, signed document dated December 9, 2015, which appeared to be Corbin’s will. Barlow and Openshaw then sought formal probate of this document, asserting it was a valid holographic will that named Barlow as executor and sole devisee, and expressed Corbin’s wish to establish a trust. The document gave Barlow discretion over the disbursement of funds and assets. The parties stipulated to the authenticity of the handwriting and signature, and that Corbin had capacity. Nicolette objected, arguing the document lacked testamentary intent and did not create a trust or mechanism for distributing the estate, so the estate should pass by intestacy.The Montana Thirteenth Judicial District Court admitted the 2015 document to probate as a valid holographic will, found it created a power of appointment in Barlow, confirmed her as personal representative, and ended Openshaw’s co-appointment. Nicolette appealed, disputing the legal effect of the 2015 writing.The Supreme Court of the State of Montana reviewed the case de novo. It held that the 2015 document was a valid holographic will only for the limited purpose of appointing Barlow as personal representative. The court reversed the lower court’s conclusion that the document created a power of appointment or trust, finding it did not effectively dispose of Corbin’s estate. As a result, the undisposed portion of the estate must pass by intestacy to Corbin’s descendants. The case was remanded for entry of an order of partial intestacy and further administration consistent with Montana’s intestate succession laws. View "In re Estate of Damjanovich" on Justia Law

Brightwater Capital obtained a judgment against Linzy Hill in 2012, which it renewed in 2017 but failed to renew again, causing the judgment to become dormant. After Hill’s death in 2022, his son Lenzy was appointed personal representative of the estate and published a notice to creditors, setting a deadline of September 27, 2022, for claims against the estate. Brightwater submitted its claim after this deadline, and the personal representative rejected it. Brightwater did not appeal the rejection but instead filed an ancillary petition in the probate case, seeking payment on the dormant judgment. The district court dismissed this petition without granting leave to amend.After the dismissal, Brightwater filed an amended ancillary petition, this time seeking payment from the personal representative’s bond. The district court treated this as a motion to reconsider, since Brightwater had not been granted leave to amend, and dismissed it with prejudice. Final appealable orders were entered, and Brightwater appealed only the order concerning the amended ancillary petition. The Court of Civil Appeals, Division IV, reversed, holding that Brightwater should have been allowed to file the amended petition.The Supreme Court of the State of Oklahoma reviewed the case de novo and held that, under Oklahoma law, once a case is dismissed, a party may not file an amended petition without leave of court. The court found that the district court properly dismissed Brightwater’s ancillary petition and correctly treated the amended filing as a motion to reconsider, since no leave to amend had been granted and the defect in the original petition could not be remedied. The Supreme Court vacated the Court of Civil Appeals’ opinion and affirmed the district court’s decision. View "In the Matter of the Estate of Hill v. Hill" on Justia Law

Roger Cunningham opened an IRA during his marriage to Sheila, naming her as the sole beneficiary. The couple, long-time Tennessee residents, later divorced in 2015. Their Marital Dissolution Agreement, incorporated into a Tennessee court’s final divorce decree, awarded Sheila a specific sum from the IRA and required her to relinquish any further claim to the account. Roger moved to South Dakota before the divorce was finalized but did not update the IRA’s beneficiary designation. After Roger’s death in South Dakota, his daughter Susan, as personal representative of his estate, discovered that the IRA had been transferred to Sheila, still listed as the beneficiary.Following Roger’s death, Susan initiated informal probate proceedings in South Dakota and sought a declaration from the Second Judicial Circuit Court that, under South Dakota’s revocation-on-divorce statute (SDCL 29A-2-804), Sheila’s beneficiary status had been automatically revoked by the divorce, making the IRA part of the estate. Sheila, a Tennessee resident, appeared specially to contest jurisdiction and the procedural propriety of the Estate’s motion, arguing that the court lacked personal jurisdiction over her and that the matter should have been brought as a separate action. The circuit court ruled in favor of the Estate, finding it had jurisdiction and that the statute revoked Sheila’s beneficiary designation, thus including the IRA in the estate.On appeal, the Supreme Court of the State of South Dakota held that the circuit court lacked personal jurisdiction over Sheila. The Supreme Court found that Sheila’s only connection to South Dakota was her receipt of the IRA funds, which resulted from Roger’s unilateral actions, not from any purposeful availment by Sheila of South Dakota’s laws. The Supreme Court vacated the circuit court’s order and remanded with instructions to grant Sheila’s motion to dismiss, declining to address the procedural issue. View "Estate Of Cunningham" on Justia Law

Neil Maune and Marcus Raichle formed a general partnership known as the Maune Raichle Law Firm, which later took out life insurance policies for each partner, naming the partnership as beneficiary. In 2011, Maune, Raichle, and three others established a new law firm, MRHFM, governed by an operating agreement containing an arbitration clause and a delegation provision referencing the American Arbitration Association rules. MRHFM took over premium payments for the life insurance policies, but only Raichle’s policy was amended to name MRHFM as beneficiary. After Maune’s death, the death benefit from his policy was paid to the original partnership, not MRHFM. The Estate of Neil Maune sued Raichle and the partnership, alleging wrongful retention of the insurance proceeds, tortious interference, unjust enrichment, and breach of fiduciary duty.The Circuit Court of St. Louis County denied the defendants’ motion to compel arbitration, reasoning that the partnership was not a party to the operating agreement and thus could not enforce its arbitration provision. The Estate argued that Maune and Raichle signed the agreement only as members and managers of MRHFM, not as partners of the original partnership, and that the claims did not fall within the scope of the arbitration agreement.The Supreme Court of Missouri reviewed the case de novo and held that, under Missouri’s aggregate theory of partnerships, the partnership has no legal existence separate from its partners. Because Maune and Raichle were the only partners and signed the operating agreement in their individual capacities, they bound themselves and the partnership to the arbitration agreement. The Court further held that, due to the delegation provision, questions about the scope of the arbitration agreement must be decided by the arbitrator. The Supreme Court of Missouri vacated the circuit court’s order and remanded with instructions to compel arbitration. View "Maune vs. Raichle" on Justia Law

After the death of Marjorie Johnson in 2020, her daughter, Rita Johnson, was appointed as executrix of her estate by the Wayne County, Michigan probate court. Rita initiated probate proceedings to determine whether certain assets belonged to the estate or to the Johnson Family Trust, which had a provision requiring arbitration of disputes. Amos C. Johnson, Marjorie’s son and trustee of the Trust, sought to compel arbitration in state court, but the request was denied. Subsequently, Amos and the Trust filed suit in the United States District Court for the Eastern District of Michigan, seeking to compel arbitration of the probate dispute under § 4 of the Federal Arbitration Act (FAA).The district court ordered the plaintiffs to show cause why the case should not be dismissed for lack of subject matter jurisdiction, citing the probate exception, the prior-exclusive-jurisdiction doctrine, and potential lack of diversity. The court ultimately dismissed the case, finding that the FAA does not provide an independent basis for federal question jurisdiction and that the probate proceedings were in rem, meaning the federal court would improperly interfere with property under the state probate court’s control.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the district court’s dismissal de novo. The Sixth Circuit held that federal courts may only compel arbitration under § 4 of the FAA if they would have jurisdiction over the underlying dispute. Because the probate proceedings were purely matters of state law and involved property already under the state court’s jurisdiction, the federal court lacked both federal question and diversity jurisdiction. The Sixth Circuit affirmed the district court’s dismissal, holding that the federal court did not have subject matter jurisdiction to compel arbitration of the state probate proceedings. View "Johnson v. Johnson" on Justia Law

After the death of Rolland Lane, the Lane Family Trust was divided into two sub-trusts, Trust A and Trust B, with Karla Lane serving as the sole trustee of Trust A and John Edwards, Scott Edwards, and Keith “KC” Lane as co-trustees of Trust B. The main asset of the trusts was a house and acreage in Caldwell, Idaho, owned equally by both trusts. Disputes arose over the sale of this property, with Karla seeking to sell it for no less than one million dollars, while the co-trustees of Trust B objected and pursued a different sale arrangement. After a cash offer of $1,350,000 was made, the district court ordered all trustees to accept the offer and close the sale by a specified date. Karla refused to comply, leading to further litigation.The District Court of the Third Judicial District of Idaho, Canyon County, ultimately removed Karla as trustee of Trust A, finding her refusal to follow the court’s order to sell the property constituted grounds for removal under Idaho law. The court appointed KC as the new trustee of Trust A. Karla appealed, arguing that her actions were within her discretionary authority as trustee and that she was acting in the best interests of the beneficiaries by seeking a higher sale price.The Supreme Court of the State of Idaho reviewed the case and affirmed the district court’s order. The Supreme Court held that Karla had waived all arguments on appeal due to significant deficiencies in her briefing, including raising new arguments for the first time on appeal, failing to provide an adequate record, and not articulating how the district court abused its discretion. The Supreme Court also awarded attorney fees and costs to the respondents, finding the appeal to be frivolous. View "Edwards v. Lane" on Justia Law

A woman died in September 2021, survived by four sons. One son, Mark, submitted a will dated September 15, 2021, naming himself as sole beneficiary and personal representative, excluding his three brothers. Another son, Michael, objected, arguing that their mother lacked testamentary capacity at the time of the will’s execution and that the will was the product of undue influence. Evidence at trial included testimony from family members, a friend who notarized the will, and a nurse who described a prior incident in which Mark threatened the decedent. Mark also sought to introduce a 2016 document (exhibit 7) showing a similar disposition of the estate, but the county court excluded it.The County Court for Douglas County found that Mark failed to prove the decedent’s testamentary capacity and that the will was the product of undue influence, ordering the estate to proceed in intestacy with Michael as personal representative. Mark appealed. The Nebraska Supreme Court, in a prior decision, reversed the exclusion of exhibit 7, holding it was relevant to show a constant and abiding scheme for property distribution, and remanded for reconsideration on the existing record, including exhibit 7.On remand, the county court admitted exhibit 7 but declined to consider new evidence, including an affidavit from the decedent’s sister. The court again found that Mark failed to prove testamentary capacity and that the will resulted from undue influence, giving little weight to exhibit 7 regarding the decedent’s state in 2021. Mark appealed again.The Nebraska Supreme Court held that the county court properly limited its review to the existing record and exhibit 7, as required by the mandate. The Supreme Court affirmed the findings that the decedent lacked testamentary capacity and that the will was the product of undue influence, and affirmed the order for intestate administration with Michael as personal representative. View "In re Estate of Walker" on Justia Law