Justia Trusts & Estates Opinion Summaries
Ex parte Joann Bashinsky.
Joann Bashinsky petitioned the Alabama Supreme Court for mandamus relief, seeking to direct the Jefferson Probate Court to vacate orders disqualifying her attorneys from representing her in the underlying proceedings and appointing a temporary guardian and conservator over her person and property. Bashinsky also sought dismissal of the "Emergency Petition for a Temporary Guardian and Conservator" that initiated the underlying proceedings and the petition for a permanent guardian and conservator filed simultaneously with the emergency petition in probate court, both of which were filed by John McKleroy and Patty Townsend. McKleroy had a professional relationship with Ms. Bashinsky that dated back to 1968, the year she and Sloan Bashinsky married. Townsend previously served the Bashinsky family as Mr. Bashinsky's executive assistant. She was the corporate secretary, controller, and chief financial officer at Golden Enterprises, and she served as Ms. Bashinsky's personal financial assistant beginning in 2017, often having daily contact with Ms. Bashinsky. At the time of the events in question, Ms. Bashinsky's personal estate was estimated to be worth $80 million, and her entire estate (including trusts and business assets) was valued at $218 million. Ms. Bashinsky's only blood relative was her daughter's only son, Landon Ash. The emergency petition, filed October 1, 2019, stated that loan amounts to Ash increased over time, and that Ash's total amount of indebtedness to Ms. Bashinsky at that time was approximately $23.5 million. Ash allegedly borrowed $13.4 million from Ms. Bashinsky in 2019 for his various business ventures. The emergency petition alleged that Ms. Bashinsky's financial transactions with Ash "are problematic in that, if the IRS were to review these loans, they might have tremendous tax consequences for Ms. Bashinsky." The petition stated McKleroy and Townsend witnessed a decline in Ms. Bashinsky's faculties in their discussions with her about financial matters. An evaluation from a geriatric physician at the University of Alabama opined Ms. Bashinsky suffered from dementia. The Alabama Supreme Court determined the permanent petition for appointing a guardian and conservator over the person and property of Ms. Bashinsky was not properly before the Supreme Court; mandamus relief with respect to that petition was denied. The Court determined an October 17, 2019 order appointing a temporary guardian and conservator for Ms. Bashinsky was void, as was the order disqualifying Ms. Bashinsky's counsel. The Supreme Court therefore granted the petition for the writ of mandamus as to those orders and directed the probate court to vacate its October 17, 2019, orders, to require the temporary guardian and conservator to account for all of Ms. Bashinsky's funds and property, and to dismiss the emergency petition. View "Ex parte Joann Bashinsky." on Justia Law
Brown v. Berry-Pratt, as successor administrator of the Estate of Pauline Brown
Leah Brown, Robert Allen Brown ("Allen"), and Cheryl Woddail ("Cheryl") were heirs of Pauline Brown ("Brown"), who died without a will. Leah, Allen, and Cheryl appealed a circuit court judgment authorizing Ellen Berry-Pratt, the administrator of Brown's estate, to sell certain real property owned by Brown at the time of her death. Because Leah, Allen, and Cheryl did not establish the circuit court erred by entering its judgment in favor of Berry-Pratt, the Alabama Supreme Court affirmed. View "Brown v. Berry-Pratt, as successor administrator of the Estate of Pauline Brown" on Justia Law
Barclay v. Castruccio
The Court of Appeals recognized the tort of intentional interference with a prospective gift or inheritance and adopted the standards set forth in Section 19 of the Third Restatement of Torts. Petitioner, the residuary beneficiary of the Estate of Peter A. Castruccio, alleged that Respondent, Peter's widow, maliciously depleted her inheritance by forcing the Estate's expenditure of attorneys' fees to defend against Respondent's groundless lawsuits and efforts to initiate criminal charges. Petitioner alleged, as relevant to this appeal, intentional interference with an expectancy. The circuit court granted Respondent's motion to dismiss, ruling that the cause of action for intentional interference with an inheritance is not a cause of action under Maryland law. The Court of Special Appeals affirmed. The Court of Appeals affirmed, holding (1) this Court recognizes the tort of intentional interference with an inheritance or gift; but (2) the allegations in Petitioner's complaint were insufficient to survive a motion to dismiss. View "Barclay v. Castruccio" on Justia Law
Cundall v. Mitchell-Clyde
Plaintiff, the beneficiary of a living trust established by John W. Martin on February 11, 2009, appealed from an order finding that the trust was properly revoked and is therefore invalid. In this case, Martin revoked the February Trust just a few months after he signed it after he had a falling out with plaintiff and then established a new trust in May 2009. The Court of Appeal applied the holding in Masry v. Masry (2008) 166 Cal.App.4th 738, and held that a trust revocation procedure is not exclusive unless the trust document explicitly says that it is. The court held that the February Trust did not state that its revocation procedure was exclusive, and the alternative revocation procedure under Probate Code section 15401 was therefore available to Martin. The court rejected plaintiff's argument that section 15401 applies only to the method of revoking a trust and not the persons who may do so. The court explained that the distinction between method and authority is artificial; a "method" can include the persons with authority to accomplish a task. The court held that section 15401 in fact addresses who may revoke a trust. View "Cundall v. Mitchell-Clyde" on Justia Law
Steuer v. Franchise Tax Board
The Paula Trust, established for the sole benefit of Medeiros, a California resident, has two cotrustees—a California resident and a Maryland resident. Paula Trust held a limited partnership interest in Syufy, which in 2007 sold stock. Some of the capital gain income from the stock sale was allocated to Paula Trust. Paula Trust’s 2007 tax return reported $2,831,336 of capital gain including the stock sale. The trust paid California income tax of $223,425 and later filed an amended 2007 California fiduciary income tax return, requesting a refund, arguing that the capital gain was incorrectly reported as California-source income. The trustees declared they were “required to apportion the stock gain as California source and non-California-source income . . . according to the number of trustees resident in California” based on Rev. & Tax. Code 17743, which provides: “Where the taxability of income under this chapter depends on the residence of the fiduciary and there are two or more fiduciaries for the trust, the income taxable . . . shall be apportioned according to the number of fiduciaries resident in this state.” The court of appeal reversed a judgment ordering a refund in the amount of $150,655 of tax, plus interest of $68,955.70. The Revenue and Taxation Code imposes taxes on the entire amount of trust income derived from California sources, regardless of the residency of the trust’s fiduciaries. View "Steuer v. Franchise Tax Board" on Justia Law
Zundel v. Zundel, et al.
Stephen Zundel sued his brothers, Loren and Richard Zundel, seeking possession of personal property subject to a May 2013 bill of transfer. Loren and Richard Zundel believed the property was part of their father's, Edwin Zundel’s estate. Loren served as personal representative of the estate and answered the complaint, denying Stephen's allegations. Loren sought declaratory judgment claiming the bill of transfer was invalid because Stephen obtained Edwin Zundel’s signature through undue influence and the document was falsely notarized by Stephen who was not a notary public. Stephen appealed when the district court found the bill of transfer was void as a result of Stephen's undue influence over his father, and that the bill of transfer was not validly accepted because it was not signed by a notary. Finding no reversible error, the North Dakota Supreme affirmed the district court's judgment. View "Zundel v. Zundel, et al." on Justia Law
Ruckelshaus v. Cowan
Their father set up a trust for the benefit of Elizabeth and Thomas, giving the siblings equal interests; if either died without children, the other would receive the remainder of the deceased sibling’s share. Thomas approached Elizabeth after their father's death, wanting to leave a portion of his share to his wife, Polly. In 1998, Elizabeth retained the defendants to terminate the trust; the representation letter made no mention of a life estate for Polly or a subsequent remainder interest for Elizabeth. The settlement agreement did not mention Polly or a life estate, nor did it restrict what either sibling could do with the trust funds. The agreement contained a liability release and stated that it was the only agreement among the parties. In 1999, Elizabeth signed the agreement and the petition to dissolve the trust. In 2000, the probate court granted the petition. Elizabeth and Thomas each received more than a million dollars. Thomas died in 2009 without children; his will devised his assets to Polly. When Polly died in 2015, she left her estate to her children. Elizabeth filed a malpractice claim. The Seventh Circuit affirmed summary judgment for the defendants, holding that the two-year Indiana statute of limitations began running no later than 2000 and that if Elizabeth had practiced ordinary diligence, she could have discovered then that her wishes had not been followed. View "Ruckelshaus v. Cowan" on Justia Law
Ex parte Nancy Beamon.
Nancy Beamon, personal representative of the estate of Lois P. Arnott, filed a petition for a writ of mandamus requesting that the Alabama Supreme Court order the Washington Circuit Court to dismiss the complaint filed against her by Bruce Allen Arnott. Donovan Arnott, Jr., was married to Lois Arnott. The two were residents of Lee County, Georgia. Bruce was the son of Donovan and Lois. Lois had two children from a prior marriage, Beamon and John Edward Terry. Donovan adopted Beamon but did not adopt Terry. Donovan died testate in 2014. In his will, Donovan left a house and two lots located in Clarke County to Lois. Donovan devised a remainder fee-simple interest in the "Atchison" tract to Bruce; a reminder fee-simple interest in the Smith tract to Beamon; and a remainder fee-simple interest in the "Taylor" tract to Terry. Lois died testate in 2017. In his complaint, Bruce alleged Lois, as the life tenant to the Atchison tract, had timber on the land clear cut in 2016, and took no steps to replant trees as was required by the terms of Donovan's will. Bruce argued the obligation of timber regeneration passed to Lois' estate. Bruce alleged though the estate promised to compensate him (as the remainder person), but made no payment. The Alabama Supreme Court granted Beamon's petition for mandamus relief: Bruce's claim was, in actuality, a claim against Lois's estate and that he was suing Beamon in her capacity as the executor of Lois's estate. However, Beamon, in her capacity as the executor of Lois's estate, had no authority to defend a suit in Alabama because the letters testamentary appointing her were issued by the Georgia court. Therefore, the circuit court did not have subject-matter jurisdiction over claims against Beamon in her capacity as the executor of Lois's estate. Accordingly, it erred when it denied Beamon's motion to dismiss the claims against her. View "Ex parte Nancy Beamon." on Justia Law
Estate of Arthur E. Kechijian v. Commissioner
After the tax court determined that petitioners failed to report approximately $41.2 million of compensation income that they realized when certain restricted stockholdings that they owned became substantially vested in January 2004, the tax court upheld the Commissioner's decision to impose accuracy-related penalties for negligence and substantial understatement of tax liability, and denied petitioners' post-trial attempt to offset their underreported income with various net operating loss carrybacks. The Fourth Circuit affirmed the tax court, holding that the tax court did not err in holding that petitioners each realized and were required to report $45.7 million of taxable income when their UMLIC S-Corp. stock substantially vested in taxable year 2004. In this case, even if the Surrender Transactions could somehow be seen as rescinding petitioners' employment and compensation agreements with UMLIC S-Corp., the court agreed with the tax court's conclusion that those transactions were totally devoid of economic substance and must be disregarded for federal income tax purposes. The court also held that the tax court did not err in upholding the accuracy-related penalties imposed by the Commissioner. Finally, the court rejected petitioner's claim that the tax court erred in refusing to consider their net operating losses (NOL) carryback claim during post-trial computation proceedings conducted pursuant to Tax Court Rule 155. View "Estate of Arthur E. Kechijian v. Commissioner" on Justia Law
Arnold v. Walz
In this quiet title action, The Supreme Court affirmed the judgment of the district court granting summary judgment in favor of Joy Arnold and quieting title in favor of the Estate of Beverly Freiden, holding that Michael Walz, a tenant of Beverly's real property, did not exercise an option to purchase the property associated with the lease, and the real property remained in the Estate. Walz leased real property from Beverly under a lease that included an option to purchase the property at any time before the end date of the lease. Beverly died during Walz' tenancy. After the term of Walz' initial option ended, Walz and Jon Freiden executed several lease modifications that purportedly extended Walz' option to buy the real property. When Walz claimed he owned the property, Arnold, the personal representative of the Estate, petitioned the district court to quiet title to the property in the Estate. The district court granted summary judgment for Arnold. The Supreme Court affirmed, holding that there was no genuine issue of material fact with respect to the fact that the real property remained in the Estate, and therefore, the district court did not err when it quieted title in the Estate. View "Arnold v. Walz" on Justia Law