Justia Trusts & Estates Opinion Summaries

Appellants Beverly Burns, Michael Ashley, and Debbie Elrod appealed the denial of their will contest, admitting to probate the will of Rheba Ashley, and issuing letters testamentary to James Ashley. The Alabama Supreme Court determined the only action the probate court took with respect to James' petition to probate Rheba's will was the appointment of an administrator ad colligendum of the estate. This appointment was insufficient to initiate the general administration of the estate, thus the circuit court could not assume jurisdiction over the administration. Accordingly, the circuit court's purporting to remove the administration of Rheba's estate from the probate court and its judgment relating to the admission of Rheba's will to probate and issued letters testamentary to James, were void for lack of jurisdiction and were therefore vacated. View "Burns v. Ashley" on Justia Law

The Obata sisters, died intestate in 2013, having never married and with no descendants. Letters of administration of the estates were issued in the Alameda County Superior Court. A dispute arose regarding the line of succession that centered on the decedents’ father, Tomejiro and the impact of his “yōshi-engumi” by Minejiro and Kiku Obata in 1911. Appellants are the descendants of Tomejiro’s biological parents, the Nakanos. The court found in favor of the Obata family members. The court concluded that California recognizes Tomejiro’s yōshi-engumi as a legal adoption and that under the Probate Code, “The adoption of Tomejiro Obata by Minejiro Obata and Kiku Obata severed the relationship of parent and child between Tomejiro Obata and his natural parents.” The court of appeal affirmed, citing Probate Code sections 6450-6451. While the primary purpose of Tomejiro’s adoption may have been to create an heir, the role of an heir in Japanese society at that time was considerably more expansive than under California law, involving not just inheritance rights, but financial and moral obligations to care for relatives and honor the family’s ancestors. Whether Tomejiro’s adoption would have terminated his relationship with his biological parents under Japanese law now or in 1911 is immaterial. View "Estate of Obata" on Justia Law

The Ninth Circuit affirmed the district court's holding that the general partnership interests at issue qualified as securities under federal law and that defendant violated federal securities law by selling unregistered securities and defrauding his investors. In this case, the general partnership interests at issue were stripped of the hallmarks of a general partnership and marketed as passive investments.The panel held that, in light of defendant's death during the pendency of the appeal and the executor replaced as the name party, as well as intervening Supreme Court precedent, several aspects of the district court's judgment require vacatur and remand. Therefore, the panel vacated the civil penalty order and the disgorgement order, remanding for further proceedings. View "USSEC v. Schooler" on Justia Law

Pangea challenged the district court's order granting in part and denying in part the company's motion for writ of execution upon the proceeds from the sale of a property previously owned by appellees. The Second Circuit certified questions of New York law for which no controlling decisions of the New York Court of Appeals exist: (1) If an entered divorce judgment grants a spouse an interest in real property pursuant to D.R.L. Section 236, and the spouse does not docket the divorce judgment in the county where the property is located, is the spouse's interest subject to attachment by a subsequent judgment creditor that has docketed its judgment and seeks to execute against the property? (2) If the answer to Question (1) is "no," then: If a settlor creates a trust solely for the purpose of holding title to property for the benefit of himself and another beneficiary, and the settlor retains the unfettered right to revoke the trust, does the settlor remain the absolute owner of the trust property relative to his creditors, or is the trust property conveyed to the beneficiaries? View "Pangea Capital Management, LLC v. Lakian" on Justia Law

The trustees sought instructions as to the proper distribution of the principal and income of the trust, which granted the donee a limited testamentary power of appointment. The issue is whether a divorce decree incorporating a settlement agreement in which the donee agreed to exercise his power of appointment to benefit the children of his first marriage, bound the donee and the trust, or whether the donee’s last will and testament, which subsequently exercised the donee’s power of appointment to benefit his granddaughter from his second marriage, controls. The master found that the settlement agreement incorporated in a Nevada divorce decree did not bind the trust, nor did it represent a partial release of the donee’s power of appointment. Imposing a constructive trust over the trust property is not appropriate in these circumstances, the master concluded, and recommended that the court grant the granddaughter’s motion for summary judgment and order the trustee to distribute the trust principal and income consistent with the exercise of the donee’s power of appointment in his last will and testament. View "In re: Trust for the Benefit of Samuel Frances duPont" on Justia Law

The Trusts initiated before FINRA an arbitration proceeding against the eight individuals who had owned Banque Pictet as partners and others, including Pictet Overseas, seeking to recover losses from custodial accounts with Banque Pictet. Pictet Overseas and the Partners then filed an action in federal district court, seeking to enjoin the arbitration, contending that, even if Rule 12200 of the FINRA Code of Arbitration Procedure for Customer Disputes required Pictet Overseas to arbitrate certain claims before FINRA, it did not require Pictet Overseas or the Partners to arbitrate the Trusts' claims.The Eleventh Circuit affirmed the district court's ruling that the Trusts' claims were non-arbitrable and held that FINRA Rule 12200 did not require arbitration. In this case, the Trusts' claims did not arise in connection with Pictet Overseas' or the Partners' business activities. Therefore, the court affirmed the district court's order permanently enjoining the Trusts from arbitrating in a FINRA forum their claims against Pictet Overseas and the Partners. View "Pictet Overseas Inc. v. Helvetia Trust" on Justia Law

Alexander Clark brought a medical malpractice lawsuit against the estate of his late pain management specialist, Dr. Daniel Brookoff. Clark claimed Dr. Brookoff negligently prescribed a prolonged course of drugs to alleviate Clark’s chronic pain and that Dr. Brookoff did not adequately inform his patient (then a minor) of the risks associated with the drug. Clark claimed that his consumption of the drug caused neurological and urological damage. Prior to trial, Clark indicated that he intended to present testimony about conversations he and his mother had with Dr. Brookoff prior to and during treatment. The Estate responded by filing a motion to exclude such evidence in accordance with Colorado’s Dead Man’s Statute. The trial court agreed that the anticipated testimony was inadmissible. Unable to introduce that testimony, Clark abandoned his informed consent claim, and the case proceeded to trial on his negligence claim. After judgment was entered in favor of the Estate, Clark appealed the order prohibiting him or his mother from testifying about their conversations with Dr. Brookoff. The court of appeals reversed the trial court’s decision to bar this testimony and remanded the case for a new trial on Clark’s informed consent claim. In so doing, the appellate division relied on case law predating the 2002 and 2013 amendments to the Dead Man’s Statute to conclude that, despite its current language, the statute was not applicable “in any civil action” but only when the outcome of a proceeding will increase or diminish an estate. Because Dr. Brookoff had an insurance policy, the court of appeals reasoned that any liability would be covered by insurance and thus would not diminish his estate. The court therefore declined to apply the Dead Man’s Statute. Following denial of its petition for rehearing, the Estate petitioned for certiorari. The Colorado Supreme Court held the Dead Man’s Statute was applicable “in all civil actions.” Because the statute applied irrespective of the potential impact of a judgment on an estate, the Court also held the existence of insurance coverage was not a factor militating for or against the applicability of the Dead Man’s Statute. View "Estate of Daniel Brookoff, M.D., v. Clark" on Justia Law

Two years after the district court denied class certification, the parties settled the individual claims. After settling, the parties jointly asked the court to enter a stipulated judgment dismissing with prejudice the Trusts’ individual claims, and the court did so. In the judgment, the Trusts reserved any right they may have to appeal the district court’s class-certification denial. The Trusts now appealed that denial, contending that the class-certification order merged with the stipulated judgment dismissing their individual claims, resulting in a final, appealable order under 28 U.S.C. 1291. Relying on Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017), the Tenth Circuit held that it lacked statutory appellate jurisdiction to review the district court’s order denying class certification. "Voluntarily dismissing the Trusts’ individual claims with prejudice after settling them doesn’t convert the class-certification denial—an inherently interlocutory order—into a final decision under 28 U.S.C. 1291." The Court dismissed this appeal. View "Anderson Living Trust v. WPX Energy Production" on Justia Law

The Supreme Court held that separate damage claims against a deceased trustee for punitive and double damages under Kan. Stat. Ann. 58a-1002 and under the common law relating to a breach of trust and a breach of fiduciary duty may be recovered after the death of a trustee.A Trust and its beneficiaries brought a cause of action for a deceased Trustee’s breach of trust and breach of fiduciary duty, seeking punitive damages from the Trustee’s Estate under section 58a-1002(c). On appeal from the judgment of the trial court, the Trust challenged the trial court’s rulings that prevented the jury from considering whether the Trust should receive double or punitive damages against the Trustee’s Estate. The court of appeals affirmed. The Supreme Court reversed, holding that the district court and court of appeals erred in concluding that Kansas law did not allow consideration of punitive and double damages because of the Trustee’s death. View "Alain Ellis Living Trust v. Harvey D. Ellis Living Trust" on Justia Law

Jeffrey Riskey, individually and as co-trustee of the Annette Riskey Family Irrevocable Trust dated April 12, 2004 ("Trust"), and other Riskey family members (collectively, "the Riskeys") appealed judgments entered after the district court granted his brother and co-trustee Rodney Riskey's summary judgment motion. Annette Riskey's husband, Gilbert Riskey, died in December 2003. Within months of the death, Rodney brought Annette to attorney David Peterson. A new trust was drafted which allowed Rodney to purchase land, bins and a house owned by Annette [after her death] for the sum of $65,000. The trust was signed by Annette [as settlor] and Rodney [as co-trustee] on April 12th, 2004. Jeffrey was appointed [c]o-trustee but was only sent a signature page, which he signed shortly thereafter. Jeffrey did not know of the purchase option until 2015. All parties agreed the land, bins and house were worth more than $65,000, though no appraisal has been admitted into the record. Annette died in November 2015. Rodney executed a purchase agreement, which Jeffrey as [c]o-trustee, would not sign. In 2004 Annette had also executed a warranty deed transferring the property to the co-trustees, Rodney and Jeffrey, and reserving a life estate. The North Dakota Supreme Court conclude that the facts, when viewed in a light most favorable to the Riskeys, did not support a conclusion that the Trust's purchase option provision was the effect of Rodney's undue influence on their mother. View "Riskey v. Riskey" on Justia Law