Justia Trusts & Estates Opinion Summaries

Offenesia Yako Bavilla died in 2010. In 1987, Offenesia executed a will that left most of her assets to her children Etta and Steven. In the mid-2000s Offenesia was elderly and "slipping mentally." In November 2005 a doctor wrote that Offenesia's "mental status has declined significantly," that she "has become nearly mute," and that she "appears to hallucinate." The doctor concluded that "[d]ue to her dementia, her condition is quite likely to continue to deteriorate." In February 2006, Offenesia executed a new will, prepared by Alaska Legal Services Corporation. This new will eliminated Etta from any inheritance but still included her brother, Steven. The 2006 will included a statement explicitly "revoking all prior wills and codicils." This appeal stemmed from Etta's attempt to informally probate the 1987 will. Because Offenesia signed a new will in 2006, the superior court did not accept Etta's informal probate of the 1987 will. Etta, acting pro se, attempted to contest the validity of the 2006 will by filing a motion to amend her probate of the 1987 will to include a challenge to the 2006 will. Her motion to amend was denied, as was her motion for recusal of the magistrate judge who recommended denial of that amendment. On appeal, Etta challenged the superior court's denial of her motion to amend her pleadings and the magistrate judge's decision not to recuse himself. After review, the Supreme Court remanded for the superior court to allow Etta to amend her pleadings but affirmed the magistrate judge's decision not to recuse himself. View "In Re Estate of Bavilla" on Justia Law

In 2009, Christopher Wilson was working for the City of Sumiton. Christopher and his supervisor, Michael Carr, had been sent to mow grass on Bryan Road. Tony Henderson, the driver of the City's knuckle-boom truck, radioed Carr and asked him and a work crew to come and flag traffic for him while he was operating the knuckle-boom truck on Sullivan Road, "just over the knob." Carr, Christopher, and the crew went to Sullivan Road. While the knuckle-boom truck was backing up, part of it became stuck. The knuckle-boom was sticking out into the road perpendicular to the road; part of it was in the lane of travel on Sullivan Road for traffic coming from Sumiton. Carr testified that, when he received the call from Henderson, it was a situation that had to be attended to immediately and that he and Christopher did not have time to return to Bryan Road to get Christopher's safety vest. At some point, two of the crew who were near Christopher went to the city truck to get cigarettes and weren't monitoring the traffic. Christopher was standing on the side of the road next to the city truck, and he was "kind of" flagging traffic until the crew got their cigarettes. Frank Lemley had gotten off work that afternoon after working 16.5 hours at the Miller Steam Plant. Lemley testified that, as he topped the rise on Sullivan Road, he saw the knuckle-boom truck in the roadway. He testified that Christopher kept going and threw up both hands, thinking that Christopher said "Stop." He testified that he put on his brakes as soon as he saw Christopher and that he "locked [his] truck down and slid 23 feet." Lemley was not able to stop in time, and his vehicle struck Christopher, who later died of his injuries. Terry Wilson, Christopher's father, filed a wrongful-death action against Lemley. The defendant, Frank Lemley, appealed a trial court order granting Terry's motion for a new trial filed after a jury had returned a verdict in his favor. The Supreme Court reversed and remanded, concluding that the jury was presented with conflicting evidence. "When the evidence is viewed in a light most favorable to Lemley and all reasonable inferences the jury was free to draw are indulged, it is easily perceivable from the record that the jury verdict in favor of Lemley as to the negligence and wantonness claims was supported by the evidence." View "Lemley v. Wilson" on Justia Law

When Respondent was born, her birth certificate identified Decedent as her father. Decedent later married Respondent’s mother but never formally established or challenged his status as Respondent’s father. When Decedent died, Appellants, Decedent’s sister and nephew, filed an ex parte petition for appointment as special administrators of Decedent’s estate. The petition identified Decedent’s siblings and their issue as his heirs, and Respondent was identified as Decedent’s stepdaughter. The district court made Appellants co-administrators of the estate. Respondent then filed a petition for revocation of the letters of special administration and for appointment as the special administrator, arguing that, as Decedent’s child, she had priority in appointment. The probate commissioner suggested that the district court find Respondent was Decedent’s child and entitled to appointment as administrator. The district court ordered that the report and recommendation be fully accepted and adopted. The Supreme Court affirmed, holding (1) paternity contests in intestacy proceedings are governed by the Nevada Parentage Act; and (2) Appellants were time-barred by, and lacked standing under, the Nevada Parentage Act to challenge Respondent’s presumptive paternity. View "In re Estate of Murray" on Justia Law

Reverend Flesher participated in benefits plans administered by the Ministers and Missionaries Benefit Board (MMBB), a New York not‐for‐profit corporation. Flesher entered into the plans while married to Snow. Snow, also a reverend and MMBB policyholder, was listed as the primary beneficiary on both of Flesher’s plans. Snow’s father was the contingent beneficiary. When Flesher and Snow divorced in 2008 they signed a Marital Settlement Agreement; each agreed to relinquish rights to inherit from the other and was allowed to change the beneficiaries on their respective MMBB plans. Flesher, then domiciled in Colorado, died in 2011 without changing his beneficiaries. MMBB , unable to determine how to distribute the funds, and filed an interpleader suit. The district court discharged MMBB from liability, applied New York law, and held that Flesher’s estate was entitled to the funds. The Second Circuit certified to the New York Court of Appeals the question: whether a governing‐law provision that states that the contract will be governed by and construed in accordance with the laws of New York, in a contract not consummated pursuant to New York General Obligations Law 5‐1401, requires the application of New York Estates, Powers & Trusts Law 3‐5.1(b)(2), which may, in turn, require application of the law of another state. View "Ministers & Missionaries Benefit Bd. v. Snow" on Justia Law

Draper, age 18, suffered traumatic brain injury in a 2006 car accident. Draper executed a durable power of attorney, authorizing her parents to collect money; compromise claims; and “fund, transfer assets to, and to instruct and advise the trustee of any trust wherein [Draper is] or may be the trustor, or beneficiary.” Draper began receiving Supplemental Security Income payments. In February 2008, father signed a personal-injury settlement. Draper received $429,259.41. Her parents signed documents creating a Special Needs Trust, intended to qualify under 42 U.S.C. 1396p(d)(4)(A), to provide for Draper’s needs without “displac[ing] or supplant[ing] public assistance or other sources of support that may otherwise be available” and transferred $429,259.41. In September 2008, Draper received notice that she had been overpaid $3,000 in SSI benefits because her trust exceeded the SSI-eligibility limit of $2,000, and that her SSI payments would cease. An ALJ found that for the trust to be exempt from consideration as a personal asset, Draper’s parents had to act as third-party creators when establishing it, but instead acted as agents under the power of attorney. Draper’s parents obtained a state court order modifying the trust, which retroactively listed the state court, rather than Draper’s parents, as the settlor. The Appeals Council denied review, finding that the order did not provide a basis for altering the ALJ’s decision. The district court and Eighth Circuit affirmed. View "Draper v. Colvin" on Justia Law

Dennis Lawlor died the day after executing a will (“Will”). Dennis was survived by three of his siblings, Antoinette, Mary, and John Lawlor. An additional sibling predeceased Dennis, but that sibling’s daughter, Audrey, and grandson, John Stoican, survived Dennis. The Will devised all of Dennis’ estate to Antoinette and Mary. Audrey and John Stoican filed a complaint contesting the Will. Antoinette’s children, Mark and John Wagner, opposed the complaint and moved to dismiss the will contest. Audrey and John Stoican then filed a motion asking the court to remove Mark as personal representative and John Wagner as the Estate’s attorney. The district court decided that Audrey and John Stoican lacked standing to contest the will or to seek the removal of the personal representative. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) erred when it determined that Audrey lacked standing to contest the Will on the basis of its determination that Audrey would not succeed to the Estate if it passed by intestacy; and (2) did not err in deciding that Audrey was not a “person interested in the estate” with standing to petition for removal of a personal representative for cause. View "Stoican v. Wagner" on Justia Law

In 2004, Plaintiff retained Law Firm in connection with an action to inspect the books and records of certain defendants. Law Firm served as counsel in this litigation through the filing of claims against other defendants. In 2011, Law Firm withdrew as counsel. When some defendants prevailed at trial, the Court concluded that Law Firm should be awarded attorneys’ fees and expenses. Law Firm then moved to intervene, attaching a petition for a charging lien based on $766,166 in unpaid fees and expenses incurred in representing Plaintiff during the earlier stages of this litigation. The Court of Chancery granted the motion for leave to intervene, holding that Law Firm had an interest relating to the subject of the action, and Law Firm’s application was timely. View "Sutherland v. Sutherland" on Justia Law

The settlor (Settlor) directed her attorney to prepare an irrevocable trust, the corpus of which was three insurance policies, that named the attorney as the trustee (Trustee). The policies were payable on the Settlor’s death to the Trustee for the benefit of the Settlor’s daughters. The Trustee executed all three insurance policy applications. Each application provided the insurer with a false address for the trust. The policies subsequently lapsed for nonpayment of the premiums due. Although the insurers issued notices of nonpayment of the premiums, the Settlor, Trustee, and beneficiaries did not receive notice of the lapse until two years later. The Settlor and her daughters (collectively, Appellants) sued the Trustee, alleging that he breached his fiduciary duties as trustee and, as a result, the policies lapsed, resulting in the loss of the initial premiums. The trial court dismissed the complaint, concluding that the Trustee did not have a duty to pay the premiums or to notify anyone of the nonpayment of the premiums. The Supreme Court reversed, holding that the Trustee had a statutory duty, which arose when the insurers issued the notices of nonpayment of the premiums, to inform Appellants of the material facts necessary for them to protect their interests. View "Rafert v. Meyer" on Justia Law

Virginia Newman died in early 2014 at the age of ninety-eight. She created a trust in the mid-1980s after the death of her third husband. Initially, she was the sole trustee, but in 1989 she resigned, and her son Roger Lamson, Jr. was appointed sole trustee. From 1992 until 2001, Roger served as co-trustee, with Virginia and Bank of Boston. In 2001, Roger was removed as co-trustee. In 2003, the trust was amended, with Virginia, Roger, son Frank Lamson, and Bank of America serving as co-trustees. In January 2012, Roger filed a petition for accounting because he was suspicious that Frank had been using trust funds for his own benefit. In July, Roger filed a complaint for breach of trust against Frank. In February 2013, Frank petitioned to remove Roger as co-trustee of the trust. The probate division issued an order that: (1) removed Roger as co-trustee; (2) accepted Frank's resignation as co-trustee; (3) removed Virginia as co-trustee based on its contemporaneous order appointing a guardian for her; (4) accepted Bank of America's resignation as trustee; and (5) appointed Trust Company of Vermont (TCV) as sole trustee in accordance with TCV's conditions that Roger and Frank be removed as co-trustees, that neither of them have a power of attorney over Virginia's financial affairs, that TCV not be responsible for any acts or omissions of any predecessor trustee, and that TCV not have any duty to inquire into the administration or accounting of any predecessor trustee. Roger appealed the order to the civil division. The probate division lifted the automatic stay of its decision removing Roger as co-trustee, thereby making his removal effective immediately. The following day, Roger appealed the decision to lift the stay. The civil division ordered the completion of discovery in the trust case, and ruled that Roger's appeal of the probate division's order lifting the stay did not serve to create a new stay but provided Roger the opportunity to request a hearing on whether the automatic stay should have been reinstated. Meanwhile, in the breach-of-trust case that remained with the probate division, Roger obtained access to the last of the trust accounts and had an accountant prepare a report. In August 2013, Frank moved to either substitute Virginia's guardian as the petitioner or dismiss the case based on Roger's lack of standing. The probate division ruled that: (1) the issue of Roger's standing with respect to his petition for an accounting was moot because he had obtained all of the information necessary for an accounting; (2) Roger, as a former co-trustee and a remainder beneficiary to a revocable trust, had no standing to pursue his breach-of-trust action; (3) Virginia's guardian, Beth Barrett, was authorized to pursue the pending breach-of-trust action; and (4) that action would be dismissed if the guardian did not substitute herself as the petitioner in the action within the next thirty days. In so ruling, the probate division noted that Roger had "essentially conceded" that he did not have standing to pursue the breach-of-trust action. On appeal of the civil division's decision to the Supreme Court, Roger argued the court erred in granting Frank summary judgment based on Roger's lack of standing because: (1) the civil division had to resolve his appeal of the probate division's decision to remove him as co-trustee before finding that he lacked standing to pursue the breach-of-trust action; (2) its decision impaired his ability as co-trustee to fulfill his duties to safeguard the trust; and (3) he was not afforded an adequate opportunity to conduct discovery. The Supreme Court affirmed, "notwithstanding Roger's protestations to the contrary, his appeal is moot. 'A case becomes moot if the issues presented are no longer live or the parties lack a legally cognizable interest in the outcome. A case that originally presented an actual controversy may become moot if the facts or circumstances of the case change such that we can no longer grant effective relief.' That is what occurred here. When Virginia died, the parties agreed that Roger could pursue, as a beneficiary, his breach-of-trust action against Frank and that is what he is doing in a separate case." View "In re Trust of Virginia B. Newman" on Justia Law

Imperial Premium Finance LLC was implicated in a life insurance scheme. Imperial’s primary business involved stranger-originated life insurance (STOLI), yet its business was not a STOLI in its purest form: instead of buying a policy on a person's life outright, Imperial provided financing for life insurance premiums in the form of loans whose terms allowed Imperial to foreclose on the policy and become the policy owner if the borrower defaulted. Seeking to evade "insurable interest" requirements, Imperial drafted its loan agreements to require that during the term of the loan the policy be held in irrevocable trust (with a trustee chosen by Imperial) for the benefit of the insured’s relatives. In late 2007, Florida resident Barton Cotton met with an insurance agent to buy a multimillion-dollar life insurance policy and finance the premium payments. Cotton was ultimately referred to Imperial about financing the premium payments. Cotton and an irrevocable trust in his name applied to Lincoln National Life Insurance Company for an $8 million life insurance policy. The beneficiaries of the trust were Cotton’s wife and children. Cotton falsely stated on the insurance application that he was not buying the policy for resale and that he would not use a third party to finance the premium payments. Lincoln issued Cotton a $5 million policy, which became an asset of the Cotton trust. Premium payments were advanced to the trust until Imperial lent the trust $335,000. The trust used that money to repay the advance and to continue making the premium payments. Because of the high interest rate and an “origination fee," after less than two years, Imperial’s $335,000 loan to the Cotton trust had ballooned to more than $557,000. Cotton was diagnosed with esophageal cancer. The loan used to finance the policy reached maturity and became due, and Cotton died two months after that. At the time of his death the trust had not paid back Imperial for the loan, but Imperial had not yet foreclosed on it, which left the trust for the benefit of Cotton’s family as the record owner of the policy. After learning of Cotton’s death, Lincoln launched an investigation which turned up the fact that Imperial had financed the purchase of the policy on Cotton’s life under a STOLI scheme. Lincoln refused to pay the death benefit. In April 2011 the Cotton trustee sued Lincoln for the benefit. Lincoln counterclaimed, alleging fraud, negligent misrepresentation, and civil conspiracy. Imperial asked its outside counsel to represent the trust. During discovery, Lincoln sought to depose Imperial under Rule 30(b)(6) of the Federal Rules of Civil Procedure. Because the topics included in Lincoln’s subpoena touched on subjects related to the criminal investigation, Imperial’s managers and employees exercised their individual Fifth Amendment rights and all refused to testify in the Rule 30(b)(6) deposition in the Lincoln case. Imperial's proffered expert witness was unable to answer questions at the deposition or at trial specific to the facts of the Cotton trust case. The jury later returned a verdict in favor of the trust, finding that though Cotton and others conspired to commit an unlawful act, Lincoln had not relied on or been damaged by the misrepresentations, and therefore not injured by the conspiracy. The court notified the parties that it was considering sanctions against Imperial and its proffered expert due to the witness' poor "performance" and lack of preparation at trial. After a hearing, the court assessed sanctions against Imperial. Imperial appealed that sanctions order. Finding that the district court's findings were not clearly erroneous and its imposition of sanctions was not an abuse of discretion, the Eleventh Circuit affirmed the sanctions order. View "Lincoln National Life Insurance Company v. Imperial Premium Finance Company, LLC" on Justia Law