Justia Trusts & Estates Opinion Summaries

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

Jesse Frederick-Conaway (“Jesse”) and Janice Russell-Conaway (“Janice”) were the original co-executors of the Estate of Everett T. Conaway (“Conaway”) and cosuccessor trustees of the Everett T. Conaway Revocable Trust (respectively, the “Estate” and the “Trust”). Janice was Conaway's widow, and Jesse was Conaway's adult son from another marriage. After intractable disputes arose, the Court of Chancery removed Janice and Jesse and appointed Kevin M. Baird, Esq. (“Baird”) as an independent successor administrator and trustee. Baird petitioned the court for instructions on whether certain of Jesse and Janice's transactions were proper. The Court of Chancery issued a Rule 54(b) order from which Jesse appealed and Janice cross-appealed. Jesse argued: (1) the Court of Chancery did not properly merge the administration of Conaway's Estate and Trust; and (2) the Court of Chancery erred in holding the Trust's interest in a limited partnership could be used to satisfy specific gifts where that the interest was subject to a contractual restriction on transfer and passed to Jesse as residuary beneficiary of the Trust. Janice's cross-appeal raised a question of whether the Court of Chancery abused its discretion by: (1) finding Janice liable for interest at the legal rate on $150,000 that the court determined she had received properly but prematurely; and (2) finding Janice liable for $77,987 she had improperly removed from the Estate, plus interest at the legal rate. After review, the Supreme Court affirmed those portions of the Court of Chancery's Order: (1) directing Jesse to return the Trust's 69% EJKC Limited Partnership interest, together with all interest and dividends paid thereon, to the Trust, to be treated as part of the residue of the Trust; and (2) finding Janice liable for amounts totaling $77,987 with interest at the legal rate. The Supreme Court reversed the determination that Janice's receipt of $150,000 in deferred payments owed to Conaway was proper. The Court also reversed the portion of the Court of Chancery's Order finding Janice liable for interest at the legal rate (as opposed to a rate applicable to funds on deposit) on the $150,000 she received. View "Frederick-Conaway v. Baird" on Justia Law

Under the terms of a spendthrift trust established by his parents, Defendant was entitled to receive over one million dollars, all to be paid out of trust principal. Before the trust’s first payment, Defendant filed for bankruptcy. The bankruptcy trustee sought a declaratory judgment on the extent of the bankruptcy trustee’s interest in the trust. The bankruptcy court concluded that the bankruptcy trustee, standing as a hypothetical lien creditor, could reach twenty-five percent of Defendant’s interest in the trust. The bankruptcy appellate panel affirmed. On appeal, the Court of Appeals for the Ninth Circuit asked the Supreme Court to clarify the relevant provisions of the California Probate Code. The Supreme Court held (1) where a spendthrift trust pays the beneficiary entirely out of principal, the California Probate Code does not limit a bankruptcy estate’s access to the trust to twenty-five percent of the beneficiary’s interest; and (2) with limited exceptions, a general creditor may reach a sum up to the full amount of any distributions that are currently due and payable to the beneficiary even though they are still in the trustee’s hands and separately may reach a sum up to twenty-five percent of any payments that are anticipated to be made to the beneficiary. View "Carmack v. Reynolds" on Justia Law

In 2003, Lester Bronson executed a power of attorney appointing Leslie “Butch” Bronson - his son - as his attorney-in-fact. In 2010, Lester informed his bank that he wished to add Butch as a joint owner on one of Lester’s bank accounts. On the day of the transaction, Butch signed Lester’s name on the required bank form while they were together in the bank employee’s office because Lester was allegedly physically unable to sign his own name. In 2014, Lester died. Lester’s daughters - Gloria Sichmeller and Debra Mills (together, Petitioners) - subsequently brought this action against Butch seeking to recover the account balance and exemplary damages, asserting that by signing Lester’s name Butch had engaged in impermissible self-dealing. The circuit court ruled in favor of Butch, concluding that Butch had acted as “a mere instrument or [amanuensis]” at Lester’s request. The Supreme Court affirmed, holding that the circuit court did not clearly err in finding that Butch was not exercising his power of attorney when he signed Lester’s name but, rather, was acting as an amanuensis. View "In re Estate of Bronson" on Justia Law