Justia Trusts & Estates Opinion Summaries

In the summer of 2014, Mark and Jennifer Porcello sought to purchase property In Hayden Lake, Idaho. After making various pre-payments, the amount the couple was still short on a downpayment. Mark and Jennifer could not qualify for a conventional loan themselves. They hoped another property in Woodinville, Washington, owned by Mark’s parents, in which Mark and Jennifer claimed an interest, could be sold to assist in the purchase of the Hayden Lake property. In an effort to help Mark and Jennifer purchase the property, Mark’s parents, Annie and Tony Porcello, obtained financing through a non-conventional lender. "In the end, the transaction became quite complicated." Annie and Tony’s lawyer drafted a promissory note for Mark and Jennifer to sign which equaled the amount Annie and Tony borrowed. In turn, Mark signed a promissory note and deed of trust for the Hayden Lake house, in the same amount and with the same repayment terms as the loan undertaken by his parents. In mid-2016, Annie and Tony sought non-judicial foreclosure on the Hayden Lake property, claiming that the entire balance of the note was due and owing. By this time Mark and Jennifer had divorced; Jennifer still occupied the Hayden Lake home. In response to the foreclosure proceeding, Jennifer filed suit against her former in-laws seeking a declaratory judgment and an injunction, arguing that any obligation under the note had been satisfied in full when the Woodinville property sold, notwithstanding the language of the note encumbering the Hayden Lake property. Annie and Tony filed a counter-claim against Jennifer and a third-party complaint against Mark. A district court granted Jennifer’s request for a declaratory judgment. However, by this time, Annie and Tony had died and their respective estates were substituted as parties. The district court denied the estates’ request for judicial foreclosure, and dismissed their third-party claims against Mark. The district court held that the Note and Deed of Trust were latently ambiguous because the amount of the Note was more than twice the amount Mark and Jennifer needed in order to purchase the Hayden Lake property. Because the district court concluded the note and deed of trust were ambiguous, it considered parol evidence to interpret them. Ultimately, the district court found the Note and Deed of Trust conveyed the Hayden Lake property to Jennifer and Mark “free and clear” upon the sale of the Woodinville property. Annie’s and Tony’s estates timely appealed. Finding that the district court erred in finding a latent ambiguity in the Note and Deed of Trust, and that the district court's interpretation of the Note and Deed of Trust was not supported by substantial and competent evidence, the Idaho Supreme Court vacated judgment and remanded for further proceedings. View "Porcello v. Estates of Porcello" on Justia Law

In 1996, Jack K. Davis (“Jack Sr.”) and Jeanne H. Davis created the Davis Family Trust (“Trust”), of which they were the grantors, trustees, and primary beneficiaries. The Trust was revocable until either Jack Sr. or Jeanne died, at which time it would become irrevocable. Upon the death of the surviving grantor, the Trust would terminate and the property would be divided equally among Jack Sr. and Jeanne’s three children: John (Jack) Davis (“Jack”), Greg Davis, and Drinda Ann Bell. The Trust became irrevocable in 2003 when Jack Sr. died. Nearly thirteen years later, Greg filed a complaint against his mother Jeanne, and his siblings Jack and Drinda, demanding: (1) an accounting and removal of trustees; (2) an order enjoining the expenditure of any funds; and (3) the appointment of a receiver. The magistrate court denied Greg’s motion to compel an accounting, finding that Greg and his siblings were “contingent residual beneficiaries” who did not have any rights relative to the Trust until Jeanne’s death. On intermediate appeal, the district court reversed, holding the magistrate court failed to give due consideration to the distinction between revocable and irrevocable trusts. The district court held Greg’s rights vested at the time the Trust became irrevocable when Jack Sr. died in 2003. The district court remanded the case for further proceedings. Jack appealed to the Idaho Supreme Court, but finding no reversible error, the Supreme Court affirmed the district court. View "Davis v. Davis" on Justia Law

Michael D. Ferguson was initially excluded as a beneficiary from his parents’ marital trust (the Original Trust). Years later, Michael's mother, Sybil Ferguson, essentially reversed Michael's exclusion by exercising a power of appointment in her will, designating Michael Ferguson as a beneficiary of the Survivor’s Trust - a sub-trust of the Original Trust. When Sybil died, Michael petitioned the magistrate court for financial records, including records from the Original Trust, to determine whether he would receive his full share of the Survivor’s Trust. The parties filed cross-motions for summary judgment, which the magistrate court denied in part and granted in part. Both parties appealed to the district court. The district court affirmed the magistrate court’s decision in part and reversed in part. The district court held that the magistrate court erred in concluding that Michael did not become a beneficiary of the Survivor’s Trust until his mother’s death, concluding that he became a beneficiary the moment his mother named him as a beneficiary more than one year before her death. Further, the district court held that the magistrate court erred in refusing to apply the Original Trust’s no-contest provision, removing Michael as a beneficiary. The issues this case presented for the Idaho Supreme Court's review centered on: the fiduciary duties of a trustee who had discretion to spend the trust’s principal, the scope of records available to a trust beneficiary under Idaho Code section 15-7-303, and the enforceability of a trust instrument’s no-contest provision. The Supreme Court concluded the district court erred: (1) in holding Sybil Ferguson did not owe Michael a fiduciary duty under the Trust Agreement; (2) in failing to address whether Michael was entitled to Original Trust allocation records pursuant to Idaho Code section 15-7-303; (3) in enforcing the forfeiture provision before addressing whether the Successor Trustees breached their fiduciary duties in administering the Survivor’s Trust; and (4) in failing to address the magistrate court's ruling denying Michael's motion to compel discovery. Judgment was reversed and the matter remanded for further proceedings. View "Ferguson v. Ferguson" on Justia Law

This case stemmed from Carol McCoy Brown’s petition for an elective share of her decedent husband’s augmented estate. When Michael Orion Brown (the decedent) died intestate, she discovered that he had set aside multiple payable on death (POD) accounts for his children and grandchildren from a prior marriage. Carol filed a petition to recover a portion of the POD funds as part of the decedent’s augmented estate. The decedent’s children, Dorraine Pool and Michael J. Brown (the Heirs), challenged the petition. The magistrate court denied Carol's petition, concluding that she had not met her burden of demonstrating that the POD funds were quasi-community property as required by the elective share statutes. Carol appealed to the district court, which affirmed the magistrate court’s denial of the petition, and granted the Heirs attorney fees. Still aggrieved, Carol sought certiorari review by the Idaho Supreme Court. But finding no reversible error in either of the lower courts' decisions, the Supreme Court affirmed. View "Brown v. Brown" on Justia Law

Believing that she would be inheriting half of her father’s estate, Deann Turcott and her husband spent considerable time and money making improvements on the father’s land. However, the father subsequently changed his will and left Deann nothing. Deann filed suit seeking quantum meruit damages for the work she had performed. The district court held that quantum meruit damages were not appropriate and awarded damages under a theory of unjust enrichment. Deann appealed the district court’s award of unjust enrichment damages as inadequate. Finding no reversible error in the district court’s judgment, the Idaho Supreme Court affirmed. View "Turcott v. Estate of Clarence D. Bates" on Justia Law

Believing that she would be inheriting half of her father’s estate, Deann Turcott and her husband spent considerable time and money making improvements on the father’s land. However, the father subsequently changed his will and left Deann nothing. Deann filed suit seeking quantum meruit damages for the work she had performed. The district court held that quantum meruit damages were not appropriate and awarded damages under a theory of unjust enrichment. Deann appealed the district court’s award of unjust enrichment damages as inadequate. Finding no reversible error in the district court’s judgment, the Idaho Supreme Court affirmed. View "Turcott v. Estate of Clarence D. Bates" on Justia Law

Bruce Birch appealed a district court decision to affirm a magistrate court decision to award attorney fees against Birch. This case concerned the disposition of the estate of Birch and Linda Bailey’s mother, Ruth Birch. Ruth executed a last will and testament that intentionally omitted Birch. After Ruth’s death in 2011, Bailey was appointed as the personal representative for her estate. The magistrate approved a compromise agreement that allowed Birch and another intentionally omitted sibling to receive equal shares of the estate. After approval of the agreement, Bailey requested Birch pay the estate's attorney fees for preparing the agreement. The magistrate court awarded attorney fees to Bailey. In this appeal, Birch argued the magistrate court’s award of attorney fees was an abuse of discretion because it did not comply with the requirements of the Idaho Rules of Civil Procedure. The Idaho Supreme Court determined the district court erred in awarding fees, reversed and remanded for further proceedings. View "Bailey v. Birch" on Justia Law

Victoria H. Smith was nearly 100 years old when she died on September 11, 2013. During her life she married Vernon K. Smith Sr., a lawyer who died of a heart attack in 1966. Victoria and Vernon Sr. accumulated substantial real estate and business interests during their lifetimes. More than twenty years before her death, Victoria prepared a holographic will. Her son Vernon Smith, Jr. was the only person present when Victoria signed the document. In 2012, Vernon formed a limited liability company, VHS Properties, LLC (“VHS” were Victoria’s initials). He named his mother and himself as the only members of the company. Vernon used a 2008 power of attorney to transfer all of Victoria’s real and personal property to VHS Properties. He signed the transfer document on behalf of Victoria, as her attorney in fact, and on behalf of VHS Properties, as a member. Vernon then used the 2008 power of attorney to execute a second document, by which he transferred to himself all of Victoria’s interest in VHS Properties. He once again signed the document on behalf of Victoria and also signed for himself. By the end of the day on July 4, 2012, Vernon had exclusive ownership and control of all of Victoria’s assets. A dispute arose among Victoria's children following her death and the probate of her estate. A magistrate court ruled Victoria died intestate after finding her will was the product of undue influence of Vernon, Jr. Vernon, Jr. appealed that ruling and an earlier, partial summary judgment ruling that invalidated a series of transactions that transferred Victoria's assets to the LLC. Finding no reversible error in the magistrate court's judgment, the Idaho Supreme Court affirmed. View "Smith v. Smith" on Justia Law

Victoria H. Smith was nearly 100 years old when she died on September 11, 2013. During her life she married Vernon K. Smith Sr., a lawyer who died of a heart attack in 1966. The couple had three children: Joseph H. Smith, Vernon K. Smith Jr., and Victoria A. (Smith) Converse. This case centered on Victoria’s estate: the magistrate court ruled that Victoria died intestate after finding that her will was a product of the undue influence of her son, Appellant Vernon Smith Jr. Vernon appealed that ruling, as well as an earlier partial summary judgment ruling that invalidated a series of transactions that transferred all of Victoria’s assets to a limited liability company that Vernon owned and a corresponding judgment entered pursuant to Idaho Rule of Civil Procedure 70(b). After review, the Idaho Supreme Court found no reversible error in the magistrate court’s judgment and affirmed. View "Smith v. Smith" on Justia Law

The estate of Paul Robert Welch (Welch) appealed the grant of summary judgment to the estate of Barbara Sue Chitwood (Chitwood). Chitwood was murdered in August 2015, at which time a dispute arose over ownership of funds Chitwood and Welch held at Farmers Bank in two bank accounts designated as “JOINT - WITH SURVIVORSHIP (and not as tenants in common or community property)[.]” Farmers Bank interpled the funds with the district court and initiated this action to resolve the dispute. Law enforcement’s investigation into Chitwood’s death led to Welch being charged with murdering Chitwood. Accordingly, in the interpleader action, Chitwood asserted Idaho’s slayer statute precluded Welch from taking the funds. The district court ruled on summary judgment that the funds went to Chitwood, concluding Chitwood’s slayer statute defense was dispositive. Welch appealed the district court’s ruling concerning the funds. But finding no reversible error in the district court's decision, the Idaho Supreme Court affirmed. View "Hodge v. Waggoner" on Justia Law