Justia Trusts & Estates Opinion Summaries

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The Supreme Court affirmed the opinion of the court of appeals reversing the judgment of the circuit court dismissing Plaintiffs' second action against Defendants, the trustees of their parents' trust, because a prior action had been filed in and decided by the district court, holding that Plaintiffs' filing in the circuit court was appropriate under the circumstances. In the earlier action, Plaintiffs filed a notice-order-motion to remove trustees and for other relief, alleging breach of fiduciary duties. The district court denied the requested relief. The circuit court affirmed. While Plaintiffs' appeal was pending in the circuit court they filed the instant proceeding in the circuit court alleging that Defendants breached their statutory and common law duties. Defendants filed a motion to dismiss and remand to the district court on the grounds that Ky. Rev. Stat. 386B.2-030 vested the district court with exclusive jurisdiction over matters arising from the same trust matter which had been before it. The circuit court denied the motion but remanded the matter to the district court, concluding that the district court had exclusive jurisdiction. The court of appeals reversed. The Supreme Court affirmed, holding that the underlying matter and claims in the two cases were different, and therefore, Plaintiffs' filing in the circuit court was appropriate. View "Hauber v. Hauber" on Justia Law

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Plaintiffs-Appellants (collectively, the “Estate”), brought this action against Defendant-Appellee, Betty Diamond (“Diamond”), the former wife of Gregory Diamond (the “Decedent”). The complaint alleged the Decedent was a federal employee who had a Thrift Savings Plan account (the “TSP Account”) administered by the Federal Retirement Thrift Investment Board (“FRTIB”). During Diamond’s marriage to the Decedent, she was the named beneficiary of Decedent’s TSP Account. When Diamond and the Decedent divorced in 2013, they entered into a divorce decree containing the following provision relevant to the Decedent’s TSP Account: “The parties have acquired an interest in retirement accounts during the course of the marriage. [Diamond] waive[s] her interest in [Decedent’s] retirement accounts. Therefore, [Decedent] is awarded any and all interest in his retirement accounts, free and clear of any claim of [Diamond].” When the Decedent died in 2017, however, Diamond was still designated as the beneficiary of the TSP Account. The Estate requested that Diamond waive all her interest in any distribution she received from the TSP Account. After Diamond refused and indicated her intent to retain any monies distributed to her, the Estate filed a declaratory judgment action against her in Utah’s Third Judicial District Court. Diamond removed the case to federal district court and filed a motion to dismiss the Estate’s complaint. The district court granted the motion, concluding the Estate’s breach of contract claims against Diamond are preempted by federal law governing the administration of TSP accounts. Finding that the district court correctly concluded the relevant provisions of the Federal Employee Retirement Systems Act (“FERSA”) preempted any conflicting Utah state property rights, the Tenth Circuit affirmed. View "Evans v. Diamond" on Justia Law

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Under 26 U.S.C. 2036(a)(1), a grantor's interest in a grantor-retained annuity trust (GRAT) is a sufficient "string" that requires the property interest to be included in the gross estate. The Ninth Circuit affirmed the district court's grant of summary judgment to the IRS in an action brought by plaintiff, challenging the inclusion of her mother's GRAT in a gross estate for purposes of the estate tax. The panel explained that the annuity flowing from a GRAT falls within the class intended to be treated as substitutes for wills by section 2036(a)(1). In this case, the panel held that the grantor retains enjoyment of a GRAT and thus it is properly included in the gross estate. Finally, even if plaintiff's challenges to 26 C.F.R. § 20.2036-1(c)(2), which includes the formula the IRS uses to calculate the portion of the property includable under section 2036(a) were not waived, the formula would not apply in this case. View "Badgley v. United States" on Justia Law

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In 2003, Dansker obtained an $83,000 home loan to purchase Las Vegas real estate. In 2009, Dansker died. No probate proceedings were instituted. In 2011, the neighborhood HOA began foreclosure proceedings and sold the property to LN. The priority lien-holder was Fannie Mae and the Federal Housing Finance Agency. The district court held that LN had not identified any legal representative of Dansker’s estate, and since no such person was identified and joined, complete diversity existed. The district court dismissed and denied a motion to substitute Dansker’s daughter. The Ninth Circuit vacated. Diversity did exist at the time of removal. The trial judge did not abuse his discretion by denying a motion to substitute, so diversity jurisdiction continued to exist. The lawsuit was against Chase and Dansker. Dansker, being dead, had no legal existence, and, therefore, was not a citizen of any state. Jurisdiction exists where the federal entity is not the record beneficiary on the deed of trust but can prove its property interest through admissible evidence. The Federal Foreclosure Bar, which provides that FHFA's property shall not be subject to foreclosure without FHFA's consent, applies and is fatal to LN’s case on the merits. View "LN Management, LLC Series 5664 Divot V. JPMorgan Chase Bank N.A." on Justia Law

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Borrower filed suit under federal and state regulations for consumer credit transactions against the lenders, alleging that the lender's loan disclosures were materially inconsistent with the terms of the loan. At issue in this appeal was whether the loan the borrower obtained to make repairs to a personal residence occupied by her niece should be considered a consumer credit transaction. The district court held that, because the borrower did not intend to live in the house, this was not a consumer credit transaction. The Ninth Circuit held that, under applicable statutes and regulations, a trust created by an individual for tax and estate planning purposes, like the one in this case, does not lose all state and federal consumer disclosure protections when it seeks to finance repairs to a personal residence for the trust beneficiary, rather than for the trustee herself. Therefore, the transaction remains a consumer credit transaction. Because the district court erred in construing the statutes in this case too narrowly, the panel reversed the district court's dismissal and remanded for further proceedings. View "Gilliam v. Levine" on Justia Law

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In this dispute between a trust's trustee and beneficiary the Supreme Court granted the trustee's original writ petition seeking a writ of prohibition or, alternatively, mandamus on the grounds that a discovery order was improper as a matter of law, holding that neither the trust instrument nor Nevada trust law required the trustee to consider the beneficiary's other assets before making distributions from the trust. This case concerned three trusts - the Raggio Trust and its two subtrusts, the Marital Trust and the Credit Shelter Trust. The Raggio Trust named Trustee as the trustee and life beneficiary of the subtrusts. Respondents were named as remainder beneficiaries of the Marital Trust. Respondents sued Trustee alleging that Trustee improperly distributed funds from the Marital Trust and paid herself distributions in amounts that were more than necessary for her proper support, care and maintenance. To prove their claim, Respondents sought discovery of Trustee's accounting and distributions of the Credit Shelter Trust. The district court granted the motion to compel discovery. The Supreme Court granted Trustee's petition for a writ of prohibition, holding that neither Nev. Rev. Stat. 163.4176 nor the Raggio Trust required Trustee to consider her other assets in making distributions from the Marital Trust, and therefore, information about those assets was irrelevant. View "Raggio v. Second Judicial District Court" on Justia Law

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Janice Tubbs challenged certain assets her father, Harry William Berkowitz transferred to himself after his wife passed away. Berkowitz and his wife, Janice's parents, created The Berkowitz Family Trust (the Trust). The Trust provided for the allocation of assets to a surviving spouse’s trust and a marital appointment trust (the Marital Trust) upon the death of either Berkowitz or his wife. The surviving spouse’s trust and the Marital Trust included a general power of appointment allowing the surviving spouse to designate a person who would receive the Trust assets. Under that power of appointment, the surviving spouse could designate himself or herself as the person who would receive the assets. Berkowitz exercised this power of appointment after his wife passed away and transferred all the Trust assets to himself, effectively divesting Tubbs and her children who were contingent beneficiaries. According to Tubbs, Berkowitz’s fiduciary duties as the successor trustee limited his exercise of the power of appointment. Berkowitz moved for summary judgment contending he had the right to transfer all assets to himself pursuant to the general power of appointment provisions, which allowed him to act in a nonfiduciary capacity. The court granted Berkowitz’s motion for summary judgment and found the general power of appointment provisions gave him unfettered discretion. Because the power of appointment was given to the surviving spouse, and not the trustee, the court rejected Tubbs’s contention that Berkowitz’s discretion was limited by his role as the successor trustee. On appeal, Tubbs contended the court erred because Berkowitz was bound by his fiduciary duties as trustee when he exercised the general power of appointment. Finding no error in the trial court's judgment, the Court of Appeal affirmed summary judgment. View "Tubbs v. Berkowitz" on Justia Law

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This litigation involved a dispute over mineral interests located in Mountrail County, North Dakota, and other property owned by Vera Mitchell and her estate. Tarryl Joyce, as the estate's administrator, appealed a district court judgment granting Steven Joyce’s motion for dismissal of Tarryl's claims against him for actions he took while acting as Vera Mitchell’s attorney-in-fact. In 2006, Vera executed a durable power of attorney appointing her son, Steven Joyce, as attorney-in-fact. Vera executed a last will and testament the same day. In 2008, due to dementia and declining mental health, Steven moved his mother from an assisted living facility in Grand Forks, North Dakota, to a memory care facility in Carrolton, Texas, near his home. In 2011, Steven, as Vera's attorney-in-fact, executed and recorded a quit claim deed transferring all of Mitchell’s mineral interests to himself. Steven also wrote several checks to himself and others and made purchases using Mitchell’s Wells Fargo checking account as Mitchell’s attorney-in-fact. Tarryl alleged Steven made improper investments and purchased property using their mother's assets. When asked for an accounting of Vera's assets, Steven responded that the assets were depleted due to costs incurred for Vera's stay at the nursing facility. Tarryl sued to recover the assets. A settlement was reached, wherein Steven would pay back monies spent out of Vera's assets. The agreement was to be guaranteed by a second mortgagee on Steven's home. After being advised by Texas counsel that the second mortgage might be invalid under Texas law, Tarryl's counsel believed the settlement with Steven would not be binding. Because Steven believed the parties had reached a valid and enforceable settlement, he moved for dismissal when Tarryl sued pursuant to the agreement. The North Dakota Supreme Court concurred with the district court that Tarryl presented no evidence that the second mortgage was invalid under Texas law, so it was proper for the district court to dismiss her case. View "Joyce v. Joyce" on Justia Law

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The Court of Appeal affirmed the trial court's judgment and held that the trial court correctly interpreted the trust document and correctly rejected trustees' statute of limitations argument. In this case, the trial court correctly concluded that the contested amendment had no effect on Trusts B and C; the trial court correctly determined beneficiaries' claims in the 2010 petition are not a "contest" and thus are not time-barred; and the trust document required distribution of Trusts B and C as soon as is practicable after trustor's death. The court also held that trustees may represent themselves in this dispute without engaging in the unauthorized practice of law. View "Donkin v. Donkin" on Justia Law

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The Supreme Court affirmed the order of the district court concluding that a secondary beneficiary was entitled to property in a trust created by Paul and decedent Chari Colman, Paul's ex-wife, holding that the plain language of Nev. Rev. Stat. 111.781(1) automatically revokes any revocable disposition from one spouse to another upon divorce. While they were married, Paul and Chari lived in a home Chari owned as her separate property. Later, Chari transferred the property to the family trust but did not change its status as her separate property. The trust named Paul and Chari as the trust's primary beneficiaries and provided that, after their deaths, Tonya Collier was the beneficiary of the property. One month after Paul and Chari divorced, Chari died. Based on section 111.781(1), Collier filed a petition seeking to confirm her status as beneficiary to the property. The district court ordered the property transferred to Collier. The Supreme Court affirmed, holding (1) the district court did not err by applying section 111.781 and concluding that it required revocation of Paul's interest in the property; and (2) substantial evidence supported the finding that the property remained Chari's separate property throughout the marriage. View "In re Colman Family Revocable Living Trust" on Justia Law