Justia Trusts & Estates Opinion Summaries

Caveator Lisa Patterson-Fowlkes appealed a superior court's denial of her motion for judgment notwithstanding the verdict, or in the alternative, motion for a new trial, following the entry of a final judgment on a jury verdict which upheld the last will and testament of her grandmother, Ruth Chancey Wright ("Wright"). The sole challenge on appeal was that Wright lacked the capacity necessary to execute the will. Wright executed her will on November 1, 2005, when she was 90 years old. She died three years later. Wright's grandson and Patterson-Fowlkes's brother, Bobby Chancey ("Chancey ") petitioned to probate the will. Shortly after, Patterson-Fowlkes filed her caveat. The probate court denied the caveat and upheld the will. Patterson-Fowlkes appealed to the superior court, and the case was tried before a jury, which rendered a verdict upholding the will. After its review of the lower courts' records, the Supreme Court found that the execution of Wright's will was videotaped. Patterson-Fowlkes contended that Wright was unable to answer simple questions such as recalling her family members and identifying the property subject to the will. However, the videotape revealed that when asked, Wright immediately named her sister, brother, and sister's children. She further identified her two grandchildren to whom her property was bequeathed and even her great- grandchildren. Wright mistakenly claimed that she owned two separate 100-acre tracts that she purchased for Patterson-Fowlkes and Chancey. While this was inaccurate, when asked what she wanted to do with her land, Wright answered how she wanted the property disposed. The Court concluded that the evidence was sufficient to authorize the jury to find that Wright possessed the capacity to execute the will in question: "significantly, the jury viewed the videotape of the will's execution, which is a linchpin of Patterson-Fowlkes's challenge." Accordingly, the Court affirmed the superior court's to deny Patterson-Fowlkes' motions. View "Patterson-Fowlkes v. Chancey" on Justia Law

Appellant Andrea Brown Jacobs and several family members holding ownership interest in certain undeveloped real property filed a partition action in January 2006 after another family member, Mary Young, refused to sign a contract for the sale of the property. The parties entered into a consent writ of partition which provided for the sale of the property pursuant to OCGA 44-6-166.1. However, neither Young nor any other party in interest tendered the sums necessary to purchase petitioners' shares of the property. Mary Young then deeded her interest in the property to the Mary E. Young Revocable Trust and died one day later. In 2010, the case appeared on a pretrial calendar; the property not having been sold and there being no appearance by Young or anyone on her behalf, the trial court struck Young's pleadings, entered judgment in favor of the petitioners, and appointed three commissioners to conduct the sale of the property consistent with the requirements of OCGA 44-6-167 through 169. Because the property had not been sold and the owners of the property still were unable to reach an agreement with regard to its disposition, the court, believing that a mandated public sale would cause financial loss to all owners, amended its 2010 partition order to provide for the listing of the property with a particular broker with the terms of the sale to be established by a majority of the previously appointed commissioners. The 2010 judgment was quickly voided by the trial court after certain petitioners alleged counsel had acted without authority in seeking the partition order. In September 2011, petitioner Florence Brown through new counsel filed a motion for order for public sale. After a hearing on Brown's motion, the trial court entered an order for public sale and appointed three commissioners to conduct the sale. The sale was advertised and the property sold to the highest bidder. Appellant Jacobs appealed orders in Case No. S12A1340. In Case No. S12X1342, Brown filed across-appeal stating she was satisfied with the trial court's orders and was cross-appealing only to ensure the entire record was included on appeal. Because the Supreme Court found that all parties received proper notice of the partition action and in fact, agreed to the entry of a final consent judgment of partition which gave rise to the trial court's authority to order the public sale, the trial court's orders confirming the sale of the property and directing the parties and parties in interest to execute the deeds were affirmed. View "Jacobs v. Young" on Justia Law

Defendants Robert Christy, Christy & Tessier, P.A., Debra Johnson, and Kathy Tremblay, appealed a superior court decision that rescinded a professional liability policy issued by Plaintiff Great American Insurance Company (GAIC), to the law firm of Christy & Tessier, P.A. Robert Christy (Christy) and Thomas Tessier (Tessier) were partners in the firm, practicing together for over forty-five years. In 1987, Frederick Jakobiec, M.D. (Jakobiec) retained Tessier to draft a will for him. In 2001, Jakobiec's mother, Beatrice Jakobiec (Beatrice), died intestate. Her two heirs were Jakobiec and his brother, Thaddeus Jakobiec (Thaddeus). Jakobiec asked Tessier, who was Beatrice's nephew, to handle the probate administration for his mother's estate. From 2002 through 2005, Tessier created false affidavits and powers of attorney, which he used to gain unauthorized access to estate accounts and assets belonging to Jakobiec and Thaddeus. Litigation ensued; two months after Tessier and Jakobiec entered into the settlement agreement, Christy executed a renewal application for professional liability coverage on behalf of the law firm. Question 6(a) on the renewal application asked: "After inquiry, is any lawyer aware of any claim, incident, act, error or omission in the last year that could result in a professional liability claim against any attorney of the Firm or a predecessor firm?" Christy's answer on behalf of the firm was "No." The trial court found that Christy's negative answer to the question in the renewal application was false "since Tessier at least knew of Dr. Jakobiec's claim against him in 2006." On appeal, the defendants argued that rescission was improper because: (1) Christy's answer to question 6(a) on the renewal application was objectively true; (2) rescission of the policy or denial of coverage would be substantially unfair to Christy and the other innocent insureds who neither knew nor could have known of Tessier's fraud; and (3) the alleged misrepresentation was made on a renewal application as opposed to an initial policy application. GAIC argued that rescission as to all insureds is the sole appropriate remedy given the material misrepresentations in the law firm's renewal application. Upon review, the Supreme Court held that the trial court erred as a matter of law in ruling that Tessier's knowledge is imputed to Christy and the other defendants thereby voiding the policy ab initio. The Court made no ruling, however, as to whether any of the defendants' conduct would result in non-coverage under the policy and remanded for further proceedings. View "Great American Insurance Company v. Christy" on Justia Law

Defendants Randall Boudreaux, M.D., Don Ortego, and Coastal Anesthesia, P.C. appealed a $4,000,000 judgment against them, following a remittitur of a $20,000,000 jury verdict in favor of Paula Pettaway, as administratrix of the estate of Paulett Pettaway Hall, on her wrongful-death/medical-malpractice claim. Upon review of the case, the Supreme Court concluded that the trial court correctly denied the defendants' request for a new trial and appropriately refused to further remit the jury's punitive damages award. Accordingly, the judgment was affirmed. View "Boudreaux v. Pettaway" on Justia Law

Petitioners were beneficiaries of a testamentary trust who sued the trustee, Respondent PNC Bank. Petitioners alleged that PNC improperly demanded that each beneficiary execute a broad release agreement prior to distribution and misapplied the provisions of the Maryland Code, Tax-General Article in calculating the amount of inheritance tax owed on the trust's assets and the amount of commission to which PNC was entitled as trustee. The circuit court granted summary judgment in PNC's favor, finding no legal impropriety in PNC's distribution plan or its calculation of the tax and commission. The court of special appeals affirmed. The Court of Appeals affirmed, holding that PNC's actions were in accord with Maryland law. View "Hastings v. PNC Bank, NA" on Justia Law

Four defendants were convicted of conspiring to defraud the U.S. by impeding the functions of the IRS and of related fraud and tax offenses in connection with abusive trusts promoted by two Illinois companies. Although the system of trusts was portrayed as a legitimate, sophisticated means of tax minimization grounded in the common law, the system was in essence a sham, designed solely to conceal a trust purchaser’s assets and income from the IRS. It was promoted through a network of corrupt promoters, managers, attorneys, and accountants, but prospective customers who sought independent advice were routinely warned of its flaws. Defendants were sentenced to prison terms of 120 to 223 months. The Seventh Circuit affirmed. View "United States v. Vallone" on Justia Law

Maude Williams passed away in May 2000, leaving behind both a substantial fortune and incomplete estate-planning documents. Originally believing this omission precluded transfer of the relevant estate property to a limited partnership, her Estate paid over $147 million in federal taxes. The Estate later discovered Texas state authorities supporting that Williams sufficiently capitalized the limited partnership before her death, entitling the Estate to a substantial refund. In this refund suit, the Estate claimed a further substantial deduction for interest on the initial payment, which it retroactively characterized as a loan from the limited partnership to the Estate for payment of estate taxes. The district court upheld both the Estate's contentions. The court affirmed, holding that the district court correctly concluded that Williams' intent on forming the partnership was sufficient under Texas law to transfer ownership of the Community Property bonds to the partnership. The district court also correctly concluded that the post hoc restructuring of the transfer as a loan from the partnership back to the Estate for tax purposes was a necessarily incurred administrative expense; the Estate retained substantial illiquid land and mineral assets that justified the loan, and the loan did not constitute an "indirect use" of the Community Property bonds. View "Keller, et al v. United States" on Justia Law

Carolyn Wilson Floyd petitioned the Supreme Court for a writ of mandamus directing Judge Thomas ap R. Jones of the Hale Circuit Court to set aside his order denying her motion to dismiss the will contest filed by Carlean Wilson Wakefield on the ground that the action was barred by section 43-8-199, Ala. Code 1975, which provides that an action to contest a will must be filed within six months after the admission of the will to probate. Upon review of the matter, the Court concluded that Floyd properly invoked the jurisdiction of the Court, and showed a clear legal right to the dismissal of the will contest because the circuit court lacked jurisdiction over the contest. Accordingly, the petition for a writ of mandamus was granted and the circuit court was directed to grant Floyd's motion to dismiss Wakefield's will contest. View "In re: Estate of S.L. Wilson, Sr." on Justia Law

This was an action for partition of the real property in the estate of Ronald McKillip. At the time of his death, McKillip owned four tracts of land. McKillip's will left the property to his three daughters, "share and share alike." The probate court confirmed ownership of the real estate to the daughters in equal shares. One daughter brought an action to partition the real estate. A referee appointed by the county court determined that a partition in kind of the real estate was not possible and recommended a public sale. The court approved the report and concluded that the real estate could not be partitioned in kind "without great prejudice to the owners." The court ordered the referee to sell the real estate, and the personal representative appealed. The Supreme Court reversed, holding that the real estate should be partitioned in kind. Remanded with directions. View "In re Estate of McKillip" on Justia Law

In 1994 Sessions created a trust for his personal benefit, with a "spendthrift" provision prohibiting use of trust assets to pay creditors. In 1995, he irrevocably promised $1.5 million to Rush Medical Center for a building and provided for it in his will. The building, now in operation, bears his name. Sessions later blamed Rush for not diagnosing sooner the cancer of which he died in 2005, without having paid the pledge. Six weeks before his death, he executed a new will making no provision for the pledge. Rush filed a successful probate claim, but estate assets were insufficient to fulfill the pledge. Rush filed a supplemental proceeding to reach assets in the 1994 trust, worth almost $19 million in 2005. The trial court entered summary judgment for Rush; the appellate court reversed, based on the Uniform Fraudulent Transfer Act. The Illinois Supreme Court reversed, reinstating the award. At common law, a person cannot settle his estate in trust for his own benefit so as to be free from liability for his debts. The fact that the Act specifies certain instances in which transfers can be considered fraudulent does not mean that the statute abrogates the common law rule. View "Rush Univ. Med. Ctr. v. Sessions" on Justia Law