Justia Trusts & Estates Opinion Summaries

A married couple created a revocable trust during their marriage, transferring three properties into it. Both spouses were designated as co-trustees, sole beneficiaries, and settlors of the trust, retaining the right to amend or revoke it together. Following their separation and eventual divorce, they sold two of the properties and retained the third in the trust. Each party then asserted claims for equitable distribution of marital property. In a pretrial order, both parties stipulated that all necessary parties were properly before the court, that the three properties were marital property, and agreed on how the properties and proceeds would be divided.The District Court, Brunswick County, entered an equitable distribution order based on these stipulations. The defendant appealed, arguing that the revocable trust was a necessary party under Rule 19 of the North Carolina Rules of Civil Procedure and that the court lacked subject matter jurisdiction because the trust was not joined. The trial court denied the defendant’s motion to set aside the order. The North Carolina Court of Appeals affirmed the trial court’s actions, holding that the trust was not a necessary party because, through their stipulations, the parties effectively revoked the trust. The Court of Appeals also found a clerical error in the order, remanding for correction.The Supreme Court of North Carolina reviewed whether a revocable trust must be joined in an equitable distribution proceeding when all settlors are already parties. The court held that Rule 19 does not require joinder of a revocable trust in such circumstances, as a judgment against the settlors binds the trust without affecting others’ rights. The decision of the Court of Appeals was modified and affirmed on this basis. View "Face v. Face" on Justia Law

Bristol-Myers acquired Celgene in 2019 and, as part of the transaction, issued contingent value rights (CVRs) to Celgene shareholders. These CVRs entitled holders to a one-time payment if certain FDA approvals were obtained by specified deadlines. The CVR Agreement established a trust to benefit CVR holders, with Equiniti Trust Company as the original trustee. After concerns that Equiniti was affiliated with Bristol-Myers, a majority of CVR beneficial owners sought to appoint UMB Bank as successor trustee. UMB, acting as trustee, later sued Bristol-Myers alleging breach of its diligent efforts obligations under the Agreement.The United States District Court for the Southern District of New York dismissed UMB’s claims for lack of subject matter jurisdiction, holding that UMB lacked Article III standing because it was not properly appointed as trustee under the strict terms of the CVR Agreement. The district court found UMB’s appointment invalid, and concluded this defect implicated standing and thus could not be cured. Bristol-Myers conditionally cross-appealed the district court’s denial of a prior motion to dismiss on alternative grounds.The United States Court of Appeals for the Second Circuit reversed, holding that any defects in UMB’s appointment implicated its capacity to sue, not Article III standing. The court determined that injuries to the trust and its beneficiaries provided standing, and that UMB’s claims as trustee did not require UMB to have suffered personal injury. The Second Circuit further concluded that, even if UMB’s appointment did not strictly comply with the Agreement, the conduct of both Bristol-Myers and Equiniti, along with the approval of a majority of beneficial owners, constituted waiver or ratification, precluding Bristol-Myers from challenging UMB’s capacity to act. The appellate court vacated the district court’s judgment, dismissed the cross-appeal, and remanded the case for further proceedings. View "UMB Bank v. Bristol-Myers" on Justia Law

In this case, organizations that represent indigent and low-income litigants challenged the widespread unavailability of official court reporters in California’s superior courts for civil, family, and probate proceedings. These organizations documented that, despite prior assurances, many indigent litigants appear in court and find that no court reporter is present, even when properly requested. As a result, such litigants are often forced either to accept repeated continuances—delaying urgent matters like domestic violence restraining orders and child custody—or to proceed without a verbatim record, which severely impairs their ability to seek appellate review.Previously, the Supreme Court of California had ruled in *Jameson v. Desta* that when a superior court does not routinely provide court reporters in civil cases but allows parties who can afford it to hire private reporters, the court must ensure that indigent litigants receive access to an official verbatim record. Despite this, the petitioners alleged and the courts largely conceded that a chronic shortage of court reporters had rendered this guarantee largely ineffective. Some superior courts responded by issuing general orders allowing electronic recording in certain cases involving fundamental rights, but these policies were limited in scope and not uniformly adopted.The Supreme Court of California reviewed this original proceeding and held that, under the in forma pauperis doctrine articulated in *Jameson v. Desta*, superior courts have a ministerial duty to provide indigent litigants, upon request, with meaningful access to an official verbatim record of proceedings in all civil matters. This duty includes using electronic recording if neither an official nor a private court reporter is available, notwithstanding statutory restrictions. The court issued a writ of mandate directing the respondent superior courts to comply with this obligation. Each party was ordered to bear its own costs. View "Family Violence Appellate Project v. Super. Ct." on Justia Law

Benjamin Hoskins and his wife, Leanne Rodgers, participated in a telemarketing operation that defrauded consumers of more than $130 million by selling worthless “business coaching” services. The Federal Trade Commission (FTC) obtained a judgment against Hoskins for over $130 million and against Rodgers for approximately $1.5 million, reflecting the proceeds they received from the scam. Hoskins and Rodgers took steps to hinder collection by transferring assets through trusts and shell entities, including a residence in Las Vegas held via a trust in which they were both trustees and beneficiaries.The United States District Court for the District of Nevada initially blocked the FTC’s attempts to enforce the judgment, concluding that Nevada’s six-year statute of limitations for enforcement of judgments barred the FTC’s action against Rodgers. The court also quashed a writ of execution the FTC obtained under the Federal Debt Collection Procedure Act (FDCPA), reasoning that Nevada law required a separate action to prove the trust holding the property was Rodgers’s alter ego before the property could be levied.On appeal, the United States Court of Appeals for the Ninth Circuit reversed both of the district court’s rulings. The Ninth Circuit held that the FDCPA preempts inconsistent state statutes of limitations and has no time limit for collecting debts owed to the federal government by writ of execution. The court also determined that the judgment against Rodgers, which is payable to the FTC, qualifies as a “debt” under the FDCPA, regardless of whether the proceeds are ultimately distributed to victims. Additionally, the Ninth Circuit held that the FTC was not required to file a separate alter ego action under state law to levy property held in trust; under the FDCPA, the FTC may levy any property in which the judgment debtors have a substantial nonexempt interest. The case was remanded for further proceedings consistent with these holdings. View "FEDERAL TRADE COMMISSION V. HOSKINS" on Justia Law

A dispute arose following the deaths of a married couple who had established a revocable trust intended to distribute their assets equally between their two sons. After the husband died, the surviving wife amended the trust, effectively removing one son from the inheritance and granting all assets to the other son, aside from a small cash bequest. The disinherited son challenged the validity of this amendment, arguing that his mother lacked testamentary capacity and was subjected to undue influence by his brother. The challenge also included allegations of fraudulent conveyance and breach of fiduciary duty based on the actions of the trustee following the mother’s death.The case was reviewed by the Superior Court of the State of Alaska, Third Judicial District, Anchorage. After a trial featuring testimony from both brothers, medical professionals, caregivers, and the attorney who prepared the trust amendments, the court found that the mother had testamentary capacity at the time of the amendment and was not unduly influenced. The court also rejected the claims of fraudulent conveyance and breach of fiduciary duty, finding insufficient evidence to support those allegations. The court entered judgment in favor of the son who had received the assets, awarding him the trust’s property. The disinherited son appealed the decision.The Supreme Court of the State of Alaska reviewed the appeal. It applied a clear error standard to the superior court’s factual findings regarding testamentary capacity and undue influence, showing deference to the lower court’s credibility determinations. The Supreme Court held that there was sufficient evidence to support the finding that the mother had capacity and was not unduly influenced. Because these findings rendered the other claims moot, the court affirmed the superior court’s judgment, upholding the validity of the trust amendments and the distribution of assets. View "In re: The Meeker Revocable Trust" on Justia Law

The case concerns a dispute among siblings arising from mutual wills executed by their parents, John and Patricia, after their divorce. The parents structured their assets as joint tenancies with rights of survivorship, intending that the survivor would use the property during their lifetime and then have it pass equally to their three children upon death. In 1997, both parents executed mutual wills in Arizona, agreeing not to alter or revoke them without mutual consent, and expressing a clear intention that all property owned at death would be divided equally among their children. After John’s death in 2010, all jointly titled assets passed to Patricia outside probate. Patricia later executed a new will in 2006, disinheriting her daughter Susan except for small bequests to Susan’s children and transferring major properties to her other two children, Gregory and Nancy, before she died in 2016.A Vermont probate court allowed Patricia’s 2006 will, rejecting Susan’s attempt to admit the earlier will. The Vermont Supreme Court, in a prior appeal, affirmed the admission of the 2006 will but noted Susan might have other remedies. Susan subsequently brought civil claims for breach of contract and unjust enrichment in the Vermont Superior Court, Windsor Unit, Civil Division. The trial court found for Susan on her unjust enrichment claims against Gregory and Nancy, holding that the mutual wills formed a binding contract to divide all property equally among the siblings and that Patricia breached it by transferring properties and disinheriting Susan.On appeal, the Vermont Supreme Court affirmed the trial court’s ruling. The Court held that the mutual wills were a binding contract requiring equal distribution of all property owned by the survivor at death, regardless of how it was acquired. The Court found that Patricia’s actions unjustly enriched Gregory and Nancy and upheld the remedies awarded, including a monetary judgment and a constructive trust. The Court also found no abuse of discretion in the trial court’s award of prejudgment interest on the monetary portion of the judgment. View "Inouye v. Estate of McHugo" on Justia Law

After Robert R. Young Sr.’s death in 2017, a dispute arose among his children over which of two documents should control the distribution of his estate. In 2000, Robert Sr. executed a formal will prepared by his attorney, leaving his business to his son Raymond, dividing other assets, and leaving only one dollar to his son Robert Jr. The day before his death, following a contentious conversation with Robert Jr., Robert Sr. handwrote a two-page document outlining a new distribution plan, including bequests to charity and his daughter Dianne Parker. He told Robert Jr. that he intended to take this handwritten note to his attorney to make it into a “permanent will.” Robert Sr. died the next day before doing so.Raymond initiated probate proceedings in the Waldo County Probate Court, asking to admit the 2000 will. Robert Jr. and Parker sought to probate the 2017 handwritten document as a holographic will. In a separate action in the Waldo County Superior Court, Raymond’s claims of undue influence by Robert Jr. and Parker were rejected on summary judgment. The Probate Court held a bench trial and found that Robert Sr. did not intend the handwritten 2017 document to serve as his will, but rather as notes for his attorney. The court denied probate of the 2017 document and admitted the 2000 will.The Maine Supreme Judicial Court reviewed the case and affirmed the Probate Court’s order. The Court held that the Probate Court properly considered extrinsic evidence regarding testamentary intent under 18-C M.R.S. § 2-502(3), that competent evidence supported the finding that Robert Sr. lacked testamentary intent for the 2017 document, and that the appellants’ due process rights were not violated by the trial proceedings. The order denying probate of the 2017 document and allowing the 2000 will was affirmed. View "Estate of Young" on Justia Law

A woman serving as her mother’s patient advocate removed her mother from an assisted living facility, subsequently killed her mother, and then died by suicide. The mother’s estate, represented by one of her other daughters, brought a wrongful death lawsuit against the daughter’s estate and obtained a judgment. When the daughter’s estate proved insolvent, attention turned to a revocable trust the daughter had created, which was the designated beneficiary of her 401(k) account and life insurance policy. The trustee of the daughter’s trust sought a declaratory ruling on whether these proceeds could be used to satisfy the judgment for the mother’s estate.In the St. Clair Probate Court, the judge determined that the life insurance proceeds were subject to creditor claims under Michigan’s Estates and Protected Individuals Code, but that the 401(k) proceeds were exempt. Both sides appealed. The Michigan Court of Appeals affirmed the probate court’s decision as to the life insurance but reversed as to the 401(k), holding that neither the statutory exemptions for retirement accounts nor life insurance applied, and thus both sources could be reached by the mother’s estate.The Michigan Supreme Court reviewed the case. It held that assets of a revocable trust—such as life insurance and 401(k) proceeds payable to the trust after the settlor’s death—are generally subject to creditor claims if the trust was revocable at the settlor’s death, unless a statutory exception applies. However, the Court found that 401(k) proceeds are exempt from creditor claims under MCL 700.7605(2), and that life insurance proceeds are exempt under MCL 700.7605(4) because, if not paid to the settlor’s estate, they are protected by Michigan’s Insurance Code. The Supreme Court reversed the Court of Appeals and remanded for further proceedings, holding the proceeds were exempt from creditor claims. View "In Re Fowler Estate" on Justia Law

A participant in two ERISA-qualified retirement plans at a university sought to change the beneficiary designation shortly before his death, naming trust accounts for his grandchildren as primary beneficiaries and removing his wife as a primary beneficiary. The plan documents required spousal consent for such changes. The participant’s wife, who was still living at the time, had previously executed a Wisconsin statutory power of attorney appointing her son-in-law as her agent. The agent signed the spousal consent form on her behalf, but the power of attorney did not expressly grant authority to waive her spousal survivor annuity rights. The plan recordkeeper rejected the beneficiary change form as deficient, and the participant died soon thereafter. The wife died about a year later. The plaintiffs, including family members and trustees, sought to enforce the beneficiary change, arguing that the power of attorney provided sufficient authority.After the recordkeeper’s rejection, the plaintiffs made a claim for benefits with the university as plan administrator. The university denied the claim, determining that Wisconsin law required a specific grant of authority in the power of attorney to waive spousal survivor benefits, which was absent in this case. The plaintiffs appealed the denial, but the university upheld its decision. Plaintiffs then filed suit in the United States District Court for the Northern District of Illinois, asserting claims under ERISA for benefits, breach of fiduciary duty, and negligence. The district court granted summary judgment for the defendants, concluding the waiver was invalid and finding no merit in the other claims.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The Seventh Circuit held that under Wisconsin law, specifically Wis. Stat. § 244.41(1)(f), a power of attorney must expressly grant authority to an agent to waive spousal rights to a joint and survivor annuity. Because the power of attorney did not contain such an express grant, the attempted waiver was invalid, and the plaintiffs’ ERISA claim failed. The court also affirmed dismissal of the fiduciary duty and negligence claims and denied the plaintiffs’ motion to certify a question to the Wisconsin Supreme Court. View "Havlik v. University of Chicago" on Justia Law

A dispute arose over an irrevocable trust established by Priel and Jacob Grimberg, whose primary assets were two residential units. After Jacob’s death, documents were executed naming Priel’s niece, Libby Pour, as successor trustee. Arie Tomer Grimberg, the Grimbergs’ son and trust beneficiary, filed petitions in the San Diego County Superior Court to challenge the validity of these documents, alleging Priel lacked capacity and was manipulated, and further claimed that Pour diverted trust assets for her own benefit, including the improper sale of trust property and personal use of trust proceeds. The court appointed a guardian ad litem for Priel and, after various developments including Pour’s bankruptcy filings, authorized the guardian to record lis pendens on Pour’s real properties to secure potential surcharges for alleged mismanagement.The Superior Court of San Diego County issued several orders regarding the recording and withdrawal of lis pendens, in light of Pour’s bankruptcy filings and subsequent dismissals. After the bankruptcy stay lapsed, the probate court granted the guardian ad litem’s request to re-record lis pendens against Pour’s properties. Pour appealed this order, arguing that it was improper under the lis pendens statutes because there was no real property claim as defined by law, and that the order should be appealable under general Probate Code provisions.The California Court of Appeal, Fourth Appellate District, Division One, reviewed the appeal. The court held that the order authorizing the recording of lis pendens was not appealable under Code of Civil Procedure section 405.39, which provides that such orders must be challenged by writ of mandate within a specified time, not by appeal. The court found that the more specific lis pendens statutes controlled over the general probate provisions. Even if the appeal were treated as a writ petition, it would be untimely. Accordingly, the appeal was dismissed. View "Grimberg v. Pour" on Justia Law