Justia Trusts & Estates Opinion Summaries

Bennie Farren died leaving a will under which he bequeathed his former residence and other assets to a trust. The trust contemplated that Patricia McGlaughlin could live in Bennie’s former residence for the remainder of her life. Rebecca Courson, Bennie’s ex-wife, filed a claim against the Estate based on a child support order entered by a Florida court in 1986 and modified in 1987. Andrew Farren, Courson’s biological son and the executor of Bennie’s estate, accepted Courson’s claim as a valid debt of the Estate. Thereafter, Andrew filed a petition to sell Bennie’s former residence to raise additional funds. McGlaughlin opposed Andrew’s petition and also petitioned to remove Andrew as executor. The Court of Chancery (1) granted Andrew’s motion in part, holding that the Florida orders constituted a final judgment entitled to full faith and credit under the federal Constitution but that there was insufficient evidence in the record to consider the facts and equities involved in ordering a sale of Bennie’s residence; and (2) denied McGlaughlin’s motion for summary judgment, holding that the evidence was insufficient to support judgment as a matter of law as to Courson’s claim that Andrew breached his fiduciary duties by accepting his mother’s claim. View "In re Estate of Bennie P. Farren" on Justia Law

The issue this case presented for the Colorado Supreme Court's review centered on whether dissatisfied beneficiaries of a testator’s estate have standing to bring legal malpractice or claims against the attorney who drafted the testator’s estate planning documents. Specifically, petitioners Merridy Kay Baker and Sue Carol Kunda sought to sue respondents Wood, Ris & Hames, Professional Corporation, Donald L. Cook, and Barbara Brundin (collectively, the Attorneys), who were the attorneys retained by their father, Floyd Baker, to prepare his estate plan. Petitioners asked the Supreme Court to abandon what was known as the "strict privity rule," which precluded attorney liability to non-clients absent fraud, malicious conduct or negligent misrepresentation. The advocated instead for a "California Test" and for an extension of the third-party beneficiary theory of contract liability (also known as the Florida-Iowa Rule), both of which petitioners asserted would allow them as the alleged beneficiaries of the estate, to sue the Attorneys for legal malpractice and breach of contract. After review of this case, the Supreme Court declined to abandon the strict privity rule, and rejected petitioners' contention that the court of appeals erred in affirming dismissal of their purported fraudulent concealment claims. View "Baker v. Wood, Ris & Hames" on Justia Law

In 2011, Mr. Nichols was admitted to the Richmond, Kentucky, Kenwood Nursing & Rehabilitation Center. He signed an agreement that states that it applies to “any and all disputes arising out of or in any way relating to this Agreement” including “wrongful death.” It is governed by “The Kentucky Uniform Arbitration Act. . . . If for any reason there is a finding that Kentucky law cannot support the enforcement of this Agreement, then the Parties agree to resolve their disputes by arbitration . . . pursuant to the [FAA].” It binds Nichols and all persons with claims through or on behalf of him. After Nichols dies, his estate sued, asserting wrongful death and other state law claims. The district court declined to compel arbitration of the wrongful-death claim, but stayed the case until arbitration of the other claims was complete. The Sixth Circuit affirmed, relying on state law precedent, not preempted by the Federal Arbitration Act, that a wrongful-death claim is “independent” of any claims held by a decedent and constitutes a “distinct interest in a property right that belongs only to the statutorily-designated beneficiaries.” Decedents have no “cognizable legal rights” in that claim. View "Richmond Health Facilities v. Nichols" on Justia Law

In 1989, Decedent opened a savings account. In 2007, Decedent included her son (Son) and daughter as additional account owners. Decedent died in 2012. The next year, Son withdrew $17,554 from the account and placed the funds in a certificate of deposit in his name. In doing so, Son relied on S.D. Codified Laws 29A-6-104, which provides that the proceeds of a joint account automatically pass to the surviving account holder. Decedent’s Estate brought suit against Son requesting a judgment for $17,554, asserting that Son converted the funds for his personal use. Son responded that, as joint owner of the account, he could not convert the funds for his own use. The trial court granted judgment in favor of the Estate, concluding that the Estate met its burden of proof that Decedent did not intend to establish a joint tenancy with right of survivorship, and therefore, the Estate rebutted the presumption under section 29A-6-104 that the proceeds automatically pass to the surviving account holder. The Supreme Court affirmed, holding that the trial court did not err when it determined that Decedent did not intend to create a joint account with right of survivorship in 2007. View "Estate of Card v. Card" on Justia Law

James Kelly, as trustee of the Beverly Snodgrass Clark Inter Vivos 1999 Separate Property Trust, sued Barbara J. Orr, Joseph Holland, Gretchen Shaffer, and DLA Piper LLP (US) (Defendants) for professional negligence in relation to legal advice they provided to his predecessor trustee of the Trust. Defendants demurred on statute of limitations grounds, arguing his action was barred by the one-year statute of limitations under Code of Civil Procedure section 340.6. The trial court sustained Defendants' demurrer without leave to amend, and Kelly filed a timely notice of appeal. On review of the matter, the Court of Appeal concluded the statute of limitations was tolled under section 340.6, subdivision (a)(2), until March 22, 2013, the date Kelly alleged Defendants ceased representation of Kelly's predecessor trustee. Because Kelly filed suit on February 27, 2014, less than one year after Defendants ceased representation of the predecessor trustee, the Court of Appeal concluded Kelly's action was not time-barred. The Court reversed the judgment and remanded for further proceedings. View "Kelly v. Orr" on Justia Law

Plaintiff-appellant Laura Gray was the sole net income beneficiary of the Edward B. Cantor Trust. Defendant-appellant Jewish Federation of Palm Springs and the Desert Area was one of three remainder beneficiaries of the Cantor Trust. Cantor died in August 1991. The main asset of the Cantor Trust was an interest in commercial rental property Las Vegas, Nevada. In 2001, respondent Martha Jimenez was appointed the trustee of the Cantor Trust. In 2005, Gray was appointed co-trustee along with Jimenez. In 2007, Gray and Jimenez made an attempt to provide an appropriate accounting to the remainder beneficiaries of the Cantor Trust when Jimenez wanted to resign as trustee. Jewish Federation objected to the accounting. Gray filed several other amended accountings to which Jewish Federation objected. Gray was advised to prepare an accounting that addressed the income and principal that was distributed by the Las Vegas property management company. Gray filed a Petition for Instructions to Ascertain Beneficiaries to the Cantor Trust seeking a determination that Jewish Federation was a proper remainder beneficiary as the name of the beneficiary in the trust documents was Project Exodus. The Petition was denied as “bogus.” Gray was ordered removed as the co-trustee of the Cantor Trust in 2009. Gray and Jimenez filed one more accounting. Jewish Federation’s objections were set for trial. Gray appealed her removal as trustee and also the trial court’s order that she must provide a complete accounting of distributions to income and principal from the management company for the Las Vegas property. In a prior unpublished opinion, the Court of Appeal denied Gray's arguments finding that an accounting from the management company was necessary, and that the trial court properly removed her as trustee. The case was remanded, and more accountings were filed. Jewish Federation objected and a trial was set. The trial court found that Gray had to reimburse the Cantor Trust for items improperly distributed to income rather than principal; Gray had to pay Jewish Federation's attorney's fees; and to repay the Trust for trustee fees she was paid. Gray appealed, and finding no reversible error, the Court of Appeal affirmed. View "Gray v. Jewish Federation of Palm Springs" on Justia Law

Decedent entered into a contract for the sale of a parcel of real property to Buyer. Before entering into the contract, Decedent specifically devised the property to Plaintiff, a church, in his will. After Decedent died, a botanical garden and museum claimed entitlement to the proceeds from the sale of the property by the by the coexecutors of Decedent’s estate, due to a charitable pledge made by Decedent prior to his death. The trial court concluded that title to the property passed to Buyer at the signing of the contract under the doctrine of equitable conversion. The appellate court reversed, concluding that equitable conversion did not apply because Decedent died prior to the fulfillment or expiration of a mortgage contingency clause in the contract. The Supreme Court reversed in part, holding that the mortgage contingency clause did not preclude the application of equitable conversion, and equitable title passed to Buyer at the execution of the contract. View "Southport Congregational Church-United Church of Christ v. Hadley" on Justia Law

While he was married to Barbara Van Buskirk, Richard Van Buskirk established an Individual Retirement Account (IRA) with the Dreyfus Family of Funds. Richard identified Barbara as the beneficiary on the account. When Richard and Barbara divorced in 1997, a property settlement agreement entered into by the parties was incorporated into the final divorce decree. Richard died in 2011. Ruth Ann Sadler, Richard’s widow and the administratrix of his estate, filed a motion to intervene in the Van Buskirks’ final divorce action so that she could request a declaration of rights that Barbara had no rights to Richard’s Dreyfus IRA account. The trial court granted Ruth Ann’s motion to intervene but denied her motion to declare that Barbara had no rights to Richard’s IRA, concluding that the agreement was silent with respect to the beneficiary interest in Richard’s IRA and, therefore, the account designation naming Barbara as the beneficiary governed the dispute. The court of appeals affirmed. The Supreme Court reversed, holding that the agreement clearly and unambiguously assigned the full and exclusive ownership interest of the Dreyfus IRA to Richard, and the agreement correspondingly prohibited Barbara from asserting any interest in the IRA owned by Richard. View "Sadler v. Buskirk" on Justia Law

After Eric Zornes won a lottery, Eric and his wife, Julia, commenced a gifting plan to Andy Wolfe, Jason Wolfe, and Jason Reed. These gifts were structured as loans, and each borrower made a promissory note for his loan, payable to Julia’s and Eric’s revocable trusts jointly. Andy’s note was secured by a deed of trust for real property. Julia and Eric later divorced pursuant to a settlement agreement. When Eric found that Andy’s house had been sold and that Julia had retained the proceeds of the sale, Eric filed this complaint alleging that Julia had converted the proceeds of Andy’s note. Julia counterclaimed for partition of the Jason Wolfe and Jason Reed notes. The district court granted summary judgment in favor of Julia, concluding that even if Julia had converted the proceeds, the settlement agreement operated as an accord and satisfaction. The court also ordered partition of the promissory notes for Jason Wolfe’s and Jason Reed’s loans. The Supreme Court reversed, holding (1) Eric was not entitled to summary judgment on his conversion claim; (2) the settlement agreement did not constitute an accord and satisfaction; and (3) the lower court erred in the method by which it partitioned the Jason Wolfe and Jason Reed notes. View "Zornes v. Zornes" on Justia Law

Judith Mortner, temporary administrator of the estate of respondent Theodore Mortner (Husband), appealed, and petitioner, Lynn Mortner (Wife), cross-appealed a circuit court order abating the Wife’s divorce action and vacating its prior final divorce decree. Husband and Wife were married in July 1987. In October 2013, Wife filed a petition for divorce when she was 70 years old and still working and Husband was approximately 90 years old and still working. In July 2014, Husband, Wife, and their counsel signed a “Memorandum of Understanding” (MOU) purporting to settle the divorce action. The MOU was filed with the court in September with a cover letter reminding the court that the divorce decree was not to issue until counsel notified the court that it could issue. On October 29, Husband’s counsel hand-delivered to the court a letter advising that the decree could now issue. On October 30, the court signed an order that decreed the parties divorced on the ground of irreconcilable differences, approved the MOU, and incorporated it as part of the divorce decree. Unbeknownst to the court, Husband died on either one or two days prior to its order. Also unbeknownst to the court, the parties on October 29, through their counsel, entered into an amendment to their proposed final decree of divorce and their MOU. Wife subsequently filed a motion to reconsider the issuance of the divorce decree, requesting the court to vacate the decree on the ground that, before the court had signed its October 30 order, Husband had died. In its appeal, the Estate argued that the trial court erred by abating the divorce action. In her cross-appeal, Wife argued that the Estate lacked standing to contest the abatement and that its appeal should therefore be dismissed. She also argued that the trial court erred when it allowed Husband’s counsel to appear at the hearing on her motion to abate the divorce. Finding no reversible error, the New Hampshire Supreme Court affirmed the trial court’s decision. View "In the Matter of Lynn Mortner and Theodore Mortner" on Justia Law