Justia Trusts & Estates Opinion Summaries

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The Vermont Supreme Court affirmed the civil division's decision to invalidate a portion of Donald Crofut's will that granted Sean Hammond an option to purchase Crofut's residence for $40,000. The court found that Crofut and Hammond had a relationship of trust and confidence. Hammond lived with Crofut, cared for him during his illness, and had access to Crofut's debit card. Evidence showed that Hammond made unauthorized purchases with Crofut's debit card and withdrew money from Crofut's bank account without permission. The court found that, had Crofut known about the theft, he would not have included the option provision in his will. As such, the option bequeathed to Hammond was found to be the result of undue influence. The court also held that partial voidance of a will is an acceptable remedy when undue influence is found, as it best preserves the testator’s intent and effectuates their desires. Here, the option provision was a small part of a much larger will, and the evidence of undue influence was unrelated to the other bequests and individuals. Therefore, invalidating the entire will would have contravened Crofut's intent. View "In re Estate of Crofut" on Justia Law

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In this case, Jonathan Garaas and David Garaas, serving as co-trustees of multiple family trusts, appealed a dismissal of their complaint against Petro-Hunt, L.L.C., an oil company operating on land in which the trusts own mineral interests. The trusts claimed that Petro-Hunt had decreased their royalty interest without proper basis and sought both a declaratory judgment affirming their higher royalty interest and damages for underpayment. The district court dismissed the complaint without prejudice, stating that the trusts had failed to exhaust their administrative remedies before the North Dakota Industrial Commission.The North Dakota Supreme Court affirmed the lower court's decision, stating that the trusts needed to exhaust their administrative remedies before bringing their claims to the court. The court reasoned that the issues raised by the trusts involved factual matters related to the correlative rights of landowners within the drilling unit, which fall within the jurisdiction of the Industrial Commission. The court held that the commission should first consider these issues, make findings of fact, and develop a complete record before the case proceeds to the district court. It further noted that, after exhausting their administrative remedies, the trusts could then bring an appropriate action for declaratory relief or damages in district court. View "Garaas v. Petro-Hunt" on Justia Law

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In a wrongful death action against an assisted-living facility, the Supreme Court of Tennessee held that the claims were subject to arbitration as per an agreement signed by the deceased's attorney-in-fact. The court clarified two key points. First, signing an optional arbitration agreement is not a "health care decision" under the Durable Power of Attorney for Health Care Act. Second, the attorney-in-fact had the authority to sign the arbitration agreement on the deceased's behalf, considering the durable power of attorney gave her the power to act for him in "all claims and litigation matters". The court further ruled that the deceased's son, who brought the wrongful death action, was bound by the arbitration agreement because his claims were derivative of his father's. Consequently, the court reversed the decision of the Court of Appeals and remanded the case to the trial court.In the case, Granville Williams, Jr. died while residing at an assisted-living facility run by Smyrna Residential, LLC. His son James Williams filed a wrongful death action against the facility. The decedent's daughter, acting as his attorney-in-fact under a power of attorney, had signed an arbitration agreement with the facility at the time of his admission. The arbitration agreement was not a condition of admission to the facility. The key issues were whether the attorney-in-fact had the authority to sign the arbitration agreement and whether the son, who was not a party to the agreement, was nevertheless bound by it. View "Williams v. Smyrna Residential, LLC" on Justia Law

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This case focuses on a Florida statute that concerns the inheritance rights of a child conceived from the eggs or sperm of a deceased person. Kathleen Steele, the appellant, had a child named P.S.S conceived through in vitro fertilization using her deceased husband's sperm. She sought survivor benefits from the Social Security Administration (SSA), claiming P.S.S. was entitled to such benefits as a child of Mr. Steele. The SSA denied the application, and the decision was upheld by an administrative law judge and a federal district court.On appeal, the U.S. Court of Appeals for the Eleventh Circuit certified two questions to the Supreme Court of Florida. The court only addressed the first question, which asked whether P.S.S was "provided for" in the decedent's will within the meaning of Florida Statute § 742.17(4).The Supreme Court of Florida ruled that "provided for" in this context means that the will must give something to the child as contemplated by the decedent when the will was made. The court found that Mr. Steele's will did not contemplate the possibility of children being conceived after his death nor did it provide any inheritance rights to such children. Therefore, the court concluded that P.S.S was not "provided for" in Mr. Steele's will within the meaning of the statute and was not eligible for a claim against the decedent's estate. The court did not address the second question certified by the Eleventh Circuit as the answer to the first question was determinative of the case. View "Steele v. Commissioner of Social Security" on Justia Law

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In this case, the Supreme Court of Arkansas was hearing an appeal regarding the distribution of the estate of John Haverstick Sr., specifically an annuity that he had purchased. The appellants were John Sr.'s sons, John Jr. and Jerry, and the appellee was John Sr.'s surviving widow, Frances. The sons argued that the lower court erred in finding that John Sr.’s will had changed the beneficiaries of the annuity, citing three reasons: (1) the will did not claim to change the beneficiaries; (2) even if the will claimed to change the beneficiaries, it was ineffective because it did not comply with the contractual procedure for making changes; and (3) under Act 925 of 2021, attempts to change annuity beneficiaries by will are ineffective.The Supreme Court of Arkansas ultimately decided to affirm the lower court's ruling. The court held that John Sr.’s will did change the annuity's beneficiaries because it sufficiently identified the annuity policy and expressed an intent to change how the proceeds would be distributed upon his death. The court rejected the argument that the will was ineffective because it did not comply with the contractual procedure for making changes, noting that the policy of allowing a testator to modify a beneficiary designation to life insurance policies also applies to the will in this case. Finally, the court found that Act 925 of 2021 does not apply retroactively, and thus it did not render the changes in the will ineffective. View "Haverstick v. Haverstick" on Justia Law

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In Minnesota, a district court removed Brian Lipschultz as a trustee from the Otto Bremer Trust. This decision was based on his violation of Minnesota Statutes section 501C.0706(b)(1), which allows for the removal of a trustee for a “serious breach of trust.” The breaches included Lipschultz's misuse of trust resources for personal purposes, offensive behavior during a stock dispute, manipulation of a grantee, and failure to disclose his successor. Lipschultz appealed this decision, arguing that the district court and court of appeals applied an incorrect legal standard for removal and that they abused their discretion in removing him under section 501C.0706(b)(1). However, the Minnesota Supreme Court affirmed the decision of the court of appeals, stating that the district court did not abuse its broad discretion when it determined that Lipschultz committed “a serious breach of trust” under section 501C.0706(b)(1). The court concluded that Lipschultz breached the duty of loyalty and the duty of information, demonstrating a pattern of placing his personal priorities over the duties he owed to the Trust. View "In the Matter of the Otto Bremer Trust" on Justia Law

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In Iowa, a ten-year-old boy was treated at the University of Iowa Hospitals and Clinics (UIHC) for a dislodged feeding tube and died the next day. The boy's mother filed administrative tort claims on behalf of the child's estate prior to being appointed as the estate's administrator. The child's parents also individually claimed loss of consortium. The claims were dismissed by the district court, which ruled that the mother lacked authority to file a claim on behalf of the estate prior to her official appointment, and that the parents had not properly filed individual administrative tort claims.The Supreme Court of Iowa held that the district court was correct to dismiss the parents' individual claims as no individual administrative tort claims were filed. However, the court determined the district court had erred in dismissing the estate's claims, arguing that the mother's administrative tort claims were valid despite her not being appointed as the estate's administrator at the time of filing. The court explained that a representative may act to protect an estate's interests before being officially appointed and can ratify pre-appointment acts, granting them the same effect as acts that would occur after appointment. The court also confirmed that the district court did not abuse its discretion by refusing to permit the plaintiffs' new evidence. The case was affirmed in part, reversed in part, and remanded for further proceedings. View "Anderson v. State of Iowa" on Justia Law

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The Supreme Court of Mississippi was asked to interpret Mississippi's Principal and Income Act of 2013 in a case involving the distribution of funds from a trust. The Crider Family Share Trust named Juliette Crider as the income beneficiary and Nathan Ricklin and Megan Woolwine as remainder beneficiaries. The Trustee, Haidee Oppie Sheffield, distributed a significant amount from Muskegon Energy Co. to the income beneficiary. Ricklin and Woolwine contended that this distribution was a breach of fiduciary duty, as they believed the funds should have been allocated to them as remainder beneficiaries. They argued that the distribution constituted a partial liquidation of the energy company's assets, and pursuant to the Principal and Income Act, the funds should have been allocated to the principal (the remainder beneficiaries) rather than the income beneficiary.The Jackson County Chancery Court ruled in favor of Sheffield. On appeal, the Supreme Court of Mississippi affirmed the lower court's decision. The Supreme Court held that the determination of whether a distribution is in partial or full liquidation, as per Section 91-7-401(e) of the Principal and Income Act, must be made on a post-tax basis. The court found that after reducing for income taxes paid by the Trust, the distributions from Muskegon Energy Co. fell below the 20 percent threshold that would trigger a partial liquidation. Therefore, the court concluded that the distributions were not in partial liquidation and Sheffield, the Trustee, did not breach any duty owed to Ricklin and Woolwine, the remainder beneficiaries. View "In The Matter of the Crider Family Share Trust v. Sheffield" on Justia Law

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In this case before the Supreme Court of California, the court interprets the provisions regarding the modification of a revocable trust under California Probate Code sections 15401 and 15402. The dispute revolves around a trust created by Jeane M. Bertsch, which was amended multiple times, with the final amendment excluding her niece, Brianna McKee Haggerty, from distribution. Haggerty challenged the validity of the final amendment, arguing that it was not properly notarized as required by the modification method specified in the trust agreement.The court held that under section 15402 of the Probate Code, a trust may be modified using the procedures set out under section 15401 for revocation, including the statutory method, unless the trust instrument specifies a method of modification and makes it exclusive, or it expressly precludes the use of revocation procedures for modification. The court clarified that merely distinguishing between revocation and modification in the trust instrument does not preclude the use of revocation procedures for modification.The court affirmed the judgment of the Court of Appeal, which held that Bertsch’s final amendment was a valid modification, since the trust agreement did not explicitly state that the specified method of modification was exclusive or expressly preclude the use of revocation procedures for modification.The court disapproved previous appellate decisions that were inconsistent with this holding, including King v. Lynch, Balistreri v. Balistreri, Diaz v. Zuniga, Pena v. Dey, Conservatorship of Irvine, and Haggerty v. Thornton. View "Haggerty v. Thornton" on Justia Law

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The Supreme Court of Wyoming reversed a lower court's decision, finding that David Spurlock's lawsuit to remove the Wyoming Trust Company as the trustee of the C.E. Spurlock Revocable Trust did not trigger the trust's no-contest clause, which would have resulted in his disinheritance. The court determined that while the trust's no-contest clause expressed a desire to avoid litigation, it did not prohibit all litigation. The court noted that other provisions in the trust specifically authorized a beneficiary to bring certain forms of litigation, and that Spurlock's action was not a challenge to the trust or an attempt to impair the trust's function or operations. The court found that the lawsuit was intended to enforce the trust's provisions related to accountings and instructions for dividing assets and did not seek damages from trust assets or seek to change or delay the asset distribution. Therefore, Spurlock's lawsuit did not violate the no-contest clause. The case was remanded with instructions to enter summary judgment in favor of Spurlock on the trustee's counterclaim. View "Spurlock v. Wyoming Trust Company" on Justia Law