Justia Trusts & Estates Opinion Summaries

In 1997, Michael Harris was convicted of eight federal criminal counts related to theft from an employee benefit plan. He was sentenced to 30 months in prison and ordered to pay $646,000 in restitution. He paid only a small fraction of that amount. The government later learned that Harris was a beneficiary of two irrevocable, discretionary trusts established by his parents for his support. In 2015, the government applied for a writ of continuing garnishment for any property distributed to Harris from the trusts. The trustees opposed the application on the ground that Harris had disclaimed his interest in the trusts, with the exception of several checking and investment accounts. The district court granted the writ and ordered the trustees to pay to the United States all current and future amounts distributed to Harris under the trusts. After review, the Ninth Circuit concluded that Harris’s interest in the trusts qualified as property under the federal debt collection procedure that applied in this case. “The government is not attempting to compel distributions from the trusts. However, any current or future distributions from the trusts to Harris shall be subject to the continuing writ of garnishment, until the restitution judgment is satisfied.” View "United States v. Harris" on Justia Law

Plaintiff filed suit against her three siblings, on behalf of her 88-year-old mother. Plaintiff claimed that her siblings' actions individually and while serving as trustees of her mother's revocable living trust constituted financial abuse of an elder or dependent adult. The siblings demurred. The mother, separately represented by counsel, intervened and joined the demurrer to the amended complaint. The trial court sustained the demurrer without leave to amend and dismissed the elder abuse action on standing grounds. The court concluded that the trial court did not err in ruling that plaintiff lacked standing to bring the elder abuse action because she has not be personally aggrieved by her siblings' actions. The court rejected plaintiff's claims to the contrary and affirmed the judgment. View "Tepper v. Wilkins" on Justia Law

Joseph Gorman contracted with James Wilson to purchase a fifteen percent interest in Marine 1, LLC for $300,000. At the time Gorman died, he owed Wilson $187,000 on the contract. The probate court appointed William Lawrence as the executor of Gorman’s estate. The estate’s counsel was Joseph Goldsmith. Wilson’s attorney sent a letter addressed to both Gorman’s personal secretary and the trustee of his trust, purporting to present Wilson’s claim for approximately $200,000 to the executor of Gorman’s estate. The letter was then forwarded to Goldsmith and Lawrence. The trial judge found that the letter was not legally sufficient for presenting Wilson’s claim and granted the estate’s motion for summary judgment. The court of appeals reversed, concluding that Ohio law permits a claim against an estate to be deemed presented when “other individuals connected with the estate receive the claim[.]” The Supreme Court reversed, holding that a claimant against an estate does not meet the mandatory requirement under Ohio Rev. Code 2117.06(A)(1)(a) to present a claim to the executor or administrator of an estate if the claimant delivers the claim to a person not appointed by the probate court, even if that person gives it to the executor or administrator. View "Wilson v. Lawrence" on Justia Law

In 2011, eighty-six-year-old Carl Landgraf executed two joint warranty deeds conveying approximately 1,000 acres of farmland to Gail Neumeister and Marlene Neumeister. In 2012, Landgraf executed deeds to fix an error in the earlier deeds. After Landgraf’s death, Clarence Mock, as special administrator of Landgraf’s estate, sued the Neumeisters, alleging that the deeds were the product of undue influence and should be set aside. Following a trial, the district court found in favor of the Neumeisters on the claim of undue influence. The Supreme Court affirmed, holding that Mock did not meet his burden of proof by clear and convincing evidence that the deeds were the result of undue influence. View "Mock v. Neumeister" on Justia Law

In this appeal from the settlement of the estate of Fred Finch, Dean Anderson, a beneficiary, challenged the award of expenses, disbursements, and attorney’s fees to the personal representative, Coral Headrick. Specifically, Anderson argued (1) the circuit court erred when it granted allowed Headrick to retain $13,355.42 in fees as personal representative because Headrick engaged in self-dealing while acting as Finch’s fiduciary, and (2) the circuit court erred when it allowed Headrick to recover partial attorney’s fees for the estate’s attorney because the fees allowed were, in fact, fees incurred for the attorney’s work in defending Headrick’s improper self-dealing. The Supreme Court affirmed, holding (1) the court properly found that Headrick was entitled to reasonable fees incurred for her time spent on the estate not relative to self-dealing; and (2) the court did not abuse its discretion in granting Headrick’s request to recover attorney’s fees from the estate for the work the estate’s attorney performed on behalf of the estate. View "In re Estate of Finch" on Justia Law

The issue presented by this interlocutory appeal arose out of a will contest between the testator’s brother, Larry Lyons, and her nephew, Anthony Lobred. Larry filed a motion to strike the deposition testimony of Dr. Lara Clement, a treating physician of the testator, due to Lobred’s counsel’s alleged ex parte communication with Dr. Clement prior to her deposition. The trial court ordered that any testimony of Dr. Clement that was not discernable from the testator’s medical records would be inadmissible at trial. Lobred sought permission to file an interlocutory appeal and the Court granted Lobred’s petition. After review, the Supreme court held that the communication between Dr. Clement and Lobred’s attorney was acceptable ex parte communication; accordingly, reversed and remanded. View "In re Estate of Lyons" on Justia Law

The SBA guaranteed a loan between a private bank and Michael Bensal's company, BCI. The private bank filed suit against BCI as the borrower and Bensal as a personal guarantor after BCI defaulted on the loan. The private bank recovered a default judgment and assigned that judgment to the SBA. Bensal later received an inheritance from his father's trust that he did not accept and, instead, disclaimed. Bensal's disclaimer of the inheritance legally passed his trust share to his two children and prevented creditors from accessing his trust share under California law. The SBA filed suit seeking to satisfy the default judgment. The court held that the Fair Debt Collection Practices Act (FDCPA), 28 U.S.C. 3301-3308, displaces California's disclaimer law. In this case, the court concluded that Bensal's disclaimer constitutes a transfer of property under the FDCPA, and California disclaimer law did not operate to prevent the SBA from reaching Bensal's trust share. The court also concluded that the portion of the default judgment based on the second loan, which was guaranteed by the SBA, was a debt within the meaning of the FDCPA. Accordingly, the court affirmed the judgment. View "SBA v. Bensal" on Justia Law

After Mark A. Sveen designated his then-wife, Kaye L. Melin, as the primary beneficiary of his life insurance policy, and his children as contingent beneficiaries, Minnesota extended its revocation-upon-divorce statute to life insurance policies. When Mark died in 2011, his children and Melin cross-claimed for the proceeds. The district court granted summary judgment to the children. The court concluded that a contested beneficiary like Melin has standing; this court has held in Whirlpool Corp. v. Ritterthat a revocation-upon-divorce statute like the one here violates the Contract Clause when applied retroactively; and thus the court's previous opinion forecloses any conclusion other than that the statute here was unconstitutional when applied retroactively. Accordingly, the court reversed and remanded for further proceedings. View "Melin v. Sveen" on Justia Law

Dale Vendsel died in 2002. Jean Vendsel was his surviving spouse. James and Bonnie Vendsel were two of their six children. His Will created the Family Trust and designated James and Jean Vendsel ("the Vendsels") as co-trustees of the trust, and co-personal representatives of the estate. The Will provided that Jean was the sole income beneficiary of the trust during her lifetime. The Will also provided that the trustee could use the principal of the trust as necessary for support and maintenance of Jean in the manner to which she was accustomed and as necessary to maintain her good health. Upon her death, the remaining trust assets are to be distributed under the "Disposition of Residue of My Estate" section of Dale Vendsel's Will. Bonnie filed a petition requesting the district court compel the Vendsels to submit an accounting and plan for distribution for the estate. On March 22, 2004, the Vendsels, as personal representatives, filed an "Accounting Receipts and Expenses" document with the district court. A hearing was scheduled for April 13, 2004. In their response to Bonnie's petition, the Vendsels noted they submitted an inventory and proposed distribution for the estate and mailed it to all interested parties. On April 13, 2004, the district court postponed the hearing indefinitely, and indicated the parties were "near reaching an agreement." The terms of any agreement the parties entered into are not part of the record. On April 16, 2004, James and Jean Vendsel filed an "Amended Accounting Receipts and Expenses" with the district court. No further action was taken by either party for over ten years. Bonnie appealed the district court's order dismissing, with prejudice, her "Petition for Order in Settlement of Accounts and Distributions Called for in the Decedent's Will and Request for Supervision From the Court." Because the district court did not err in concluding Bonnie failed to establish she was entitled to receive a yearly accounting under the terms of the trust, and in concluding her claims against the estate were without merit, the Supreme Court affirmed the district court's order dismissing her petition with prejudice. View "Estate of Vendsel" on Justia Law

The patriarch-settlor appointed defendant Melissa Reynoso (a granddaughter of the settlor) as trustee of his estate. In this proceeding, the trial court determined Reynoso was the most reliable and credible of the family members. The trial court found that other family members were not credible. Reynoso sold real property of the trust to Karen Bartholomew (a daughter of the settlor). Plaintiff Anthony Pizarro (a grandson of the settlor) filed a petition for relief against Reynoso concerning the sale of the real property. The court denied the petition and ordered Pizarro and others to pay the trust’s attorney fees and costs. On appeal, Pizarro contended the trial court erred in finding that Reynoso acted properly as trustee. However, the Court of Appeal found he failed to make a focused, organized, and coherent argument for why the Court should have reversed the order. The Court therefore concluded he forfeited the argument. Pizarro and Bartholomew contended that the award of attorney fees and costs against them was improper. The Court concluded that the attorney fees and costs were properly and lawfully imposed under the trial court’s equitable power over the trust, except to the extent the trial court made Pizarro and Bartholomew personally liable for attorney fees and costs, rather than liable solely from their shares of the trust assets. The award of attorney fees and costs to the extent it imposed personal liability was reversed; in all other respects, the Court affirmed. View "Pizarro v. Reynoso" on Justia Law