Justia Trusts & Estates Opinion Summaries

Erna Rousey transferred five real properties and nearly $225,000 in cash assets to her son, James “Jimmy” Rousey, Jr., in the last few years of her life. After her death, her estate sought recission of these transfers, alleging undue influence. The estate argued that Erna lacked the mental capacity to make the transfers and that they were the product of fraud, undue influence, or coercion. Jimmy contended that the transfers were valid gifts and that Erna had sufficient mental capacity.The Superior Court of the State of Alaska, Third Judicial District, Anchorage, found that Jimmy maintained a confidential relationship with Erna and that the property transfers were the result of undue influence. The court concluded that the estate was entitled to recission of the property transfers and awarded attorney’s fees to the estate. Jimmy, representing himself, appealed the recission and attorney’s fee award, arguing that the transfers were valid gifts and that the court erred in its findings.The Supreme Court of the State of Alaska reviewed the case and affirmed the recission of the property transfers. The court held that the estate provided clear and convincing evidence that Jimmy exerted undue influence over Erna, who was susceptible due to her diminished mental capacity, isolation, and reliance on Jimmy. The court found that Jimmy failed to rebut the presumption of undue influence and that the transfers were not gifts. However, the Supreme Court vacated and remanded the enhanced attorney’s fee award for reconsideration, noting that the superior court may have improperly relied on Jimmy’s actions before the litigation started and did not sufficiently explain why Jimmy’s opposition to the petition was in bad faith. The Supreme Court instructed the lower court to reconsider the attorney’s fee award based on appropriate factors. View "In re Estate of Rousey" on Justia Law

Joy Goodwin Adams sued Tiffany Rudd Atkinson, Katherine M. Rudd, Goodwin Capital Partners, Ltd., and KATISAM, Inc., seeking reimbursement for attorneys' fees she paid to a third party. The Jefferson Circuit Court dismissed her suit with prejudice, leading Joy to appeal. The central issue was whether the terms "hold harmless" and "indemnify" are synonymous when used independently in a contract. The Supreme Court of Alabama held that they are synonymous.The case involves three trusts and two agreements. Joy's parents created two trusts in 1986 and 1987 for Joy and her daughters, Tiffany and Kate. Joy created a third trust in 1989. Joy executed a 2011 release-and-indemnification agreement with BB&T, a co-trustee, and a 2013 settlement agreement with the defendants after Tiffany and Kate sued her for alleged breaches of fiduciary duties. The 2013 agreement included a "hold harmless" provision requiring the defendants to protect Joy against claims for attorneys' fees by corporate trustees successfully defending against suits initiated by Tiffany and Kate.In prior litigation, Tiffany and Kate sued BB&T for negligence, and BB&T filed a third-party claim against Joy for attorneys' fees. The federal district court granted summary judgment in favor of BB&T on the negligence claim and denied Joy's motion on the indemnification claim. Joy settled BB&T's claim for $614,791.62 and then demanded reimbursement from the defendants, who refused.The Supreme Court of Alabama reviewed the case de novo and concluded that "hold harmless" and "indemnify" are synonymous, meaning the defendants agreed to reimburse Joy for the attorneys' fees she paid to BB&T. The court reversed the circuit court's judgment and remanded the case for further proceedings. View "Adams v. Atkinson" on Justia Law

Thomas R. McDonald filed a petition contesting amendments to the Declaration of Trust of Judith E. Stratos 2000 Trust, which named William Goebner as successor trustee. McDonald alleged the amendments, which removed him and his sister as beneficiaries, were due to undue influence, fraud, and financial elder abuse. He sought various remedies under the Probate Code. Two days before a scheduled hearing, Goebner filed a demurrer to dismiss McDonald’s claims, which the trial court overruled as untimely under Code of Civil Procedure section 430.40, requiring demurrers to be filed within 30 days after service of the complaint.The trial court overruled Goebner’s demurrer as untimely, leading Goebner to petition for a writ of mandate to vacate the trial court’s order. He argued that the Probate Code, specifically section 1043, which allows an interested person to make a response or objection in writing at or before the hearing, should govern the timing for filing a demurrer in probate proceedings, not the Code of Civil Procedure.The California Court of Appeal, First Appellate District, Division Three, reviewed the case. The court agreed with Goebner, holding that section 1043 of the Probate Code governs the timing for filing a demurrer in probate proceedings, allowing it to be filed at or before the hearing. The court concluded that Goebner’s demurrer, filed two days before the hearing, was timely. The court issued a writ of mandate directing the trial court to vacate its order overruling the demurrer as untimely and to consider the demurrer on its merits. Goebner was entitled to recover his costs in the writ proceeding. View "Goebner v. Super. Ct." on Justia Law

Richard Edward Paul died intestate on October 3, 2022, leaving behind four daughters: Richann L. Ray, Dawn M. Paul Charron, Shelbi L. Paul, and Danita J. Paul. Richann was appointed as the Personal Representative of the Estate with the consent of her sisters. The Estate's significant asset was a cabin in Lincoln, Montana. The heirs could not agree on the disposition of the cabin, leading to conflict. Shelbi filed a motion for a temporary restraining order, alleging that Richann intended to sell the cabin contrary to their parents' wishes. The District Court denied the motion and ordered mediation for any disputed issues.The heirs continued to discuss the cabin's disposition, and Shelbi filed a motion to enforce a settlement agreement based on email communications, which the District Court denied, finding no valid settlement agreement. The heirs proceeded to mediation, resulting in a General Release and Mediated Settlement Agreement, which outlined a procedure for selling the cabin to one or more heirs within 30 days of an appraisal. The cabin was appraised at $234,000, but none of the heirs submitted a bid within the 30-day period. Richann listed the cabin for sale and later filed a motion to approve its sale for $106,100, considering the estimated repair costs. Shelbi opposed the motion, arguing the cabin was not fairly marketed.The Montana Eighth Judicial District Court approved the sale, finding the Agreement resolved all issues and the sale price was reasonable and in the best interest of the Estate. Shelbi filed motions to reconsider, which the District Court denied. Shelbi appealed the order approving the sale.The Montana Supreme Court affirmed the District Court's decision, concluding that the Agreement did not address the situation where no heir qualified to purchase the cabin within the specified time. The Court found that Richann, as Personal Representative, had the statutory authority to sell the cabin and that the sale was reasonable and in the best interest of the Estate. View "In re Estate of Paul" on Justia Law

Steven Holte and Sheldon Holte, as co-trustees of the Kermit and Ardella Family Mineral Trust, along with Ardella Holte, filed a lawsuit against Tiah E. Rigby, both individually and as the personal representative of Nathan Holte's estate. The case arose from Nathan Holte's misappropriation of trust income during his tenure as trustee. After Nathan's death, Rigby became the life beneficiary of Nathan's share of the trust income. The Holtes sought to offset Rigby's distribution to recoup the misappropriated funds.The District Court of Williams County, Northwest Judicial District, ruled that the co-trustees could offset Rigby's distribution to recover the misappropriated trust income but could not offset her distribution to recoup non-trust money that Nathan had stolen from Ardella's personal accounts. Rigby appealed, arguing that she should not be held liable for her father's misdeeds, while the Holtes cross-appealed, seeking to offset Rigby's distribution further.The North Dakota Supreme Court reviewed the case. The court held that the co-trustees could not withhold Rigby's distribution to recoup the misappropriated trust income, as Rigby had no personal liability for Nathan's actions, and her beneficial interest vested upon Nathan's death. The court emphasized that the trust agreement required monthly distributions to life beneficiaries and that Nathan's life interest terminated upon his death, making it improper to offset against Rigby's distribution.The court also affirmed the lower court's decision that the co-trustees could not offset Rigby's distribution to recover the non-trust money stolen by Nathan, as Rigby was not involved in the theft and had no personal liability. The case was affirmed in part, reversed in part, and remanded for further proceedings consistent with the opinion. View "Holte v. Rigby" on Justia Law

Estel Neven Zugg passed away in January 2021. Donna Katherine Finley filed a petition in September 2021, requesting the District Court to open formal intestacy proceedings, determine Neven's heirs, and appoint her as the estate's personal representative, claiming she was Neven's common law wife. Neven's sons, Austin and Kolby Zugg, participated in the proceedings. Katherine testified that she and Neven considered themselves married since 2016 and lived between North Dakota and Arizona, with occasional stays in Montana.The Fifteenth Judicial District Court held a bench trial in August 2022. Testimonies from Neven's friends and family indicated that Neven had ties to Montana but primarily lived in North Dakota and Arizona. The court found that Katherine and Neven did not live together in Montana, which does not recognize common law marriages from states that do not recognize them unless the couple resides in Montana.The Supreme Court of the State of Montana reviewed the case. The court affirmed the District Court's decision, concluding that Katherine and Neven did not establish a common law marriage under Montana law. The court emphasized that a relationship begun in a state that does not recognize common law marriages must ripen by residency in Montana to become valid. Since Katherine and Neven never lived together in Montana, their relationship did not meet the requirements for a common law marriage in Montana. The court found no clear error in the District Court's findings and upheld the denial of Katherine's petition. View "In re Estate of Zugg" on Justia Law

James Needham and Roxanne O. Smith purchased a residential property as joint tenants. Smith later vacated the property and transferred her interest to the Roxanne O. Smith Trust. After Smith's death, both parties filed crossclaims for partition. The trial court assigned the property to Needham and awarded the Trust an equitable sum for its interest. The court declined to offset Needham's contributions by the fair-market rental value for the time Smith left the property, concluding that Needham did not prevent Smith from accessing the property and that the Trust had not established the fair-market rental value.The Superior Court, Addison Unit, Civil Division, held a two-day bench trial and found that Smith left the property due to fear of Needham but was not denied access. The court assigned the property to Needham, who was to pay the Trust for its interest. The court rejected the Trust's request for an offset due to ouster, finding no evidence that Needham excluded Smith from the property. The court also found that the Trust failed to establish the fair-market rental value of the property, as the trustee's testimony lacked sufficient foundation.The Vermont Supreme Court reviewed the case and affirmed the lower court's decision. The court held that the trial court did not abuse its discretion in finding that the Trust failed to establish the fair-market rental value of the property. The court noted that the trustee's testimony was insufficient to establish rental value and that the trial court was not obligated to assign it any persuasive value. The court also declined to remand the case for additional evidence on rental value, as the Trust did not demonstrate any reason why remand was warranted. View "Needham v. Smith Trust" on Justia Law

Plaintiff, a beneficiary of a revocable trust, claimed entitlement to certain real property and income. The trust included an in terrorem clause, which disinherits any beneficiary who contests the trust. Plaintiff argued that she did not trigger this clause by seeking to enforce the trust's provisions as intended by the grantor, rather than challenging the trust itself. The key issue was whether her actions constituted a violation of the in terrorem clause, thereby forfeiting her bequests.The Supreme Court initially denied defendants' motion to dismiss, citing unresolved factual issues. Defendants later moved for partial summary judgment, which the court granted, determining that plaintiff had no ownership interest in Dempsaco LLC. Plaintiff's cross-motion for partial summary judgment regarding her entitlement to the real property was denied. Defendants then moved for summary judgment, arguing that plaintiff's claim to a 50% interest in Dempsaco triggered the in terrorem clause. The Supreme Court agreed, granting defendants' motion and awarding attorney's fees. The Appellate Division modified the order by denying attorney's fees but otherwise affirmed the decision, concluding that plaintiff's actions violated the in terrorem clause.The New York Court of Appeals reviewed the case and concluded that plaintiff did not violate the in terrorem clause because her lawsuit sought to enforce the trust's provisions as written and intended by the grantor. The court held that plaintiff was entitled to summary judgment on her claim to the real property, as the trust explicitly directed the trustee to transfer the property to her. However, the court found that triable issues of fact remained regarding the income stream and unjust enrichment claims. The order of the Appellate Division was modified accordingly. View "Carlson v Colangelo" on Justia Law

Effie Mae Autry had three children, Steve, Michael, and Melvin. Michael and Melvin predeceased their mother, leaving behind children. In 2014, Effie and her husband Eugene executed wills that distributed their assets equally among their children and grandchildren. Eugene passed away in 2017, and his assets were transferred to Effie. In 2019, Effie executed a new will and several warranty deeds, leaving all assets to Steve and disinheriting her grandchildren. This new will was drafted by attorney Anna Kate Robbins after their long-time attorney, Sidra Winter, refused due to concerns about Effie's mental capacity and potential undue influence by Steve.The Pontotoc County Chancery Court invalidated the 2019 will and the warranty deeds, citing undue influence by Steve and failure to properly authenticate the will. The court found that the affidavits of the attesting witnesses did not include their addresses, as required by Mississippi Code Section 91-7-7. The court also found that Steve had a confidential relationship with Effie and did not rebut the presumption of undue influence.The Supreme Court of Mississippi reviewed the case and affirmed the chancery court's decision. The court held that the 2019 will was not duly authenticated due to the missing addresses on the affidavits. The court also agreed with the chancery court's finding of undue influence, noting that Steve's actions and Effie's declining mental capacity supported this conclusion. The case was remanded to the chancery court for further proceedings regarding the probate of the 2014 will. View "In Re The Matter of the Estate of Autry" on Justia Law

Jeffrey Winter, as trustee, filed a petition against Franklin Menlo, seeking instructions regarding a trust, Frank's suspension and removal as cotrustee, an accounting, and an order revoking a power of appointment executed by Vera Menlo for lack of capacity. The petition also included allegations of financial elder abuse, breach of fiduciary duty, breach of trust, and wrongful taking of property. Prior to this, Jeffrey had consulted with attorney Adam Streisand about potential litigation against Frank, sharing confidential information.The Superior Court of Los Angeles County disqualified Streisand and his law firm, Sheppard, Mullin, Richter & Hamilton LLP, from representing Frank. The court found that Jeffrey was a prospective client under Rule 1.18 of the California Rules of Professional Conduct, which prohibits attorneys from representing clients with interests materially adverse to those of a prospective client if the attorney received confidential information material to the matter. The court determined that the information Jeffrey shared with Streisand remained confidential and material, necessitating disqualification to avoid the use of that information.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. The court agreed with the lower court's interpretation that materiality should be evaluated at the time of disqualification. It concluded that the information disclosed by Jeffrey to Streisand remained confidential and material, thus affirming the disqualification. The appellate court also considered the equities, noting that the case was still in its early stages and that Frank could find other competent counsel. The order of the Superior Court was affirmed, maintaining the disqualification of Streisand and his firm. View "Winter v. Menlo" on Justia Law