In The Matter of The Estate of James Oldrum Smith, Jr.

James Oldrum Smith Jr. (Father) died in 2006. This appeal stemmed from his children’s disagreements over the handling of Father’s estate (Estate). These disagreements resulted in lengthy litigation. The Estate was complicated by the fact that, prior to his death, Father created a family trust (Trust); however, he died within three years from the creation of the Trust, meaning the money in the Trust became taxable to the Estate, leaving the Estate otherwise unable to pay its taxes due to liquidity issues. The Estate borrowed $2,020,000 from the Trust, secured by a promissory note and deed of trust, to help pay the taxes. Some of the siblings, who would have received a greater amount of money from the Trust than from the Estate, later took issue with the loan, specifically that the amount now owed on the loan was much greater than what the other siblings, the trustee, and the co-executors claimed. As a result, the aggrieved siblings filed several actions challenging the trustees’ and the co-executors’ decisions, particularly as related to the loan between the Trust and the Estate. The special chancellor appointed to the case determined that the trustees and co-executors did not breach any duty owed to the beneficiaries and that the loan was valid in the amount of $2,523,004.83 plus four percent interest per annum. At issue here was the result of the chancellor’s judgment, and finding no error, the Supreme Court affirmed. View "In The Matter of The Estate of James Oldrum Smith, Jr." on Justia Law