Justia Trusts & Estates Opinion Summaries

This appeal concerned the 2008 sale of real property located in Twin Falls, Idaho owned by the partnership White, White & Lawley I (“WWLI”), which sold the Property to White X Three, LLC, for $650,000. In 2009, after White X Three acquired and then substantially renovated the Property, it began to lease the Property. At the time of the sale, Xantha White, then a minor child, and Todd White, her uncle, each held a one-half interest in the White Family Trust. The White Family Trust was a one-third partner in WWLI when it sold the Property. Todd was also a member of White X Three, placing him on both sides of the sale and purchase of the Property. Although he had a conflict of interest in the sale, Todd did not obtain court approval for the sale pursuant to Idaho Code section 68-108(b), nor did he inform Xantha or her mother, who was also Xantha’s conservator, of the sale. Xantha (now known as Xantha Darrow) and the Trustee of the Xantha J. White Trust, Larry Braga, brought suit against Todd and White X Three, asserting that, because Todd did not obtain court approval for the sale of the Property, the sale was void and the Property should be placed in a constructive trust. Both parties moved for summary judgment. The district court granted partial summary judgment in favor of Todd and White X Three, concluding that the sale of the Property was not void because Idaho Code section 68-108(b) did not apply. The district court also declined to place the Property in a constructive trust but allowed Xantha's claim of breach of a fiduciary duty to continue. Xantha thereafter moved for an Idaho Rule of Civil Procedure 54(b) certification to allow her to appeal the partial judgment rendered against her. The district court granted her request, and this appeal followed. The Idaho Supreme Court found the district court erred in determining there was no issue of material fact that Todd complied with the terms of the Trust Indenture in consenting to the sale of the Property, both in general and in terms of the sale price. Further, the Supreme Court concluded the district court erred in declining to place the Property in a constructive trust. The case was remanded for further proceedings. View "Darrow v. White" on Justia Law

Robert Houston created a trust which, after amendments, created three separate subtrusts designed to become effective following Robert’s death: a “Marital Trust,” a “Grandchildren’s Trust,” and a “Residuary Trust.” Within the Residuary Trust, Robert created two "for the benefit of" ("FBO") trusts, one for each of Robert’s children, Patricia and Richard. A clause in the FBO Richard Trust granted Richard a testamentary power of appointment to direct how Richard’s share of the Residuary Trust would be distributed if Richard predeceased Robert’s then-wife Lyn. The Marital Trust separately provided that if Richard was not alive when the Marital Trust assets were distributed, Richard’s portion of the Marital Trust would be placed in a “Grandchildren’s Trust” to benefit Richard’s two children from his first marriage (Robert and Lyn’s grandchildren) Ryan Houston and Crystal Siegler. This matter was litigated in Richard’s probate case after his death. Before the magistrate, Richard’s second wife and the personal representative of his estate, Susan Marie Houston, claimed that Richard assigned his interest in Robert’s trusts to her in Richard’s will. Ryan and Crystal argued that because their father, Richard, had not yet inherited from their grandfather’s trusts before he died, Richard could not assign those interests to Susan. The magistrate court agreed with Susan and held that Richard validly assigned his interests to her. Ryan and Crystal, as potential beneficiaries of the Grandchildren’s Trust, appealed that decision to the district court, which reversed the magistrate’s decision. Susan appealed, arguing that the district court erred by converting the intermediate appeal to a trial de novo and by concluding the magistrate court’s interpretation of Robert’s Trust was unreasonable. After its review, the Idaho Supreme Court found no reversible error in the district court's decision and affirmed. View "Houston v. Houston" on Justia Law

Years after their father’s death, Appellees filed a diversity lawsuit against their stepmother, Defendant,and the executor of their father’s estate to adjudicate rights to property owned by their father and Defendant. Before the district court, Appellees argued that their father, H.C. “Dude” Crain, Jr. (Dude), breached a property settlement agreement (PSA) that he entered into with their mother, Marillyn Crain (Marillyn), pursuant to Dude and Marillyn’s divorce. The PSA— which the Logan County, Arkansas Chancery Court ruled was “contractual and nonmodifiable”—required Dude to maintain a will whereby he would leave “one-half of [his] estate” to Appellees. However, at Dude’s death, no such will existed. Instead, Defendant took sole possession of Dude’s separate property and retitled all jointly owned assets in her name. After the ruling that Dude breached the PSA, the district court imposed a constructive trust over all property Dude owned immediately prior to his death. The district court then used the principles set forth in the Restatement (Third) of Restitution to equitably divide the property, valued at nearly $100 million. Defendant appealed.   The Eighth Circuit affirmed. The court explained that although there is an open, ongoing probate action in Arkansas state court, the district court has never attempted to interfere with that court’s possession of any of the property at issue there. Rather, the district court adjudicated the parties’ rights to the property and imposed a constructive trust on it. Therefore, the court held that the probate exception to subject matter jurisdiction does not apply. View "Lisa Crain v. Shirley Crain" on Justia Law

The Supreme Court affirmed in part and vacated in part the amended judgment of the superior court in favor of Plaintiff, as executor of the Estate of Armando Damiani (Mandy) and the Estate of Lillian Estrella, in this action alleging that Defendants had conspired to commit an unlawful conversion of funds in Mandy's investment account, holding that the portion of the amended judgment awarding Plaintiff compensatory damages and prejudgment interest was error.Specifically, the Supreme Court held (1) the trial justice erred by permitting a witness to testify despite knowing that she would invoke her privilege against self-incrimination under the Fifth Amendment, and the error prejudiced Defendant; and (2) there was no reason to disturb the trial justice's decision on Plaintiff's claim for declaratory judgment. View "Estrella v. Janney Montgomery Scott LLC" on Justia Law

The United States Bankruptcy Court for the Northern District of Illinois ruled that all assets held by the Soad Wattar Revocable Living Trust—including the Wattar family home—were part of the bankruptcy estate of Richard Sharif. Sharif was the son of Soad Wattar, now de‐ ceased. As the sole trustee of the Wattar trust. Sharif’s sisters, Haifa and Ragda Sharifeh, soon launched an effort to keep the trust proceeds out of their brother’s bankruptcy estate. At issue in these appeals are the bankruptcy court’s rulings on three motions: (1) Haifa’s 2015 motion to vacate the court’s decision that all trust assets belonged to the bankruptcy estate; (2) the sisters’ joint 2016 motion for leave to sue the Chapter 7 trustee assigned to Sharif’s bankruptcy for purported due process violations; and (3) Ragda’s motion seeking both reimbursement of money she allegedly spent on the family home and the proceeds from Wattar’s life insurance policy, which the court had found to be an asset of the trust and therefore part of the bankruptcy estate.   The Seventh Circuit affirmed. The court held that even if Haifa were really the executor, she simply waited too long to assert the estate’s rights. In the bankruptcy and district courts, the trustee raised the equitable defense of laches, which cuts off the right to sue when (1) the plaintiff has inexcusably delayed bringing suit and (2) that delay harmed the defendant. Next, the court held that the bankruptcy court correctly concluded that the motion did not set forth a prima facie case for a right to relief against the trustee. View "Estate of Soad Wattar v. Horace Fox, Jr." on Justia Law

The Supreme Court reversed the decision of the circuit court to grant summary judgment to the Estate of Rose Beadle in this action seeking to determine title to Beadle's investment accounts, holding that the order was void as a matter of law.Pursuant to a court order, Beadle's temporary guardian and conservator altered Beadle's investment accounts to eliminate Travis and Truman Raguse as her beneficiaries. The court issued its order, however, without a hearing and without notice to the beneficiaries. The circuit court approved a final accounting and terminated the guardian/conservatorship. During the probate of Beadle's estate, the Raguses filed petitions to determine title to Beadle's investment accounts. The circuit court granted summary judgment in favor of the Estate on the Estate's petition to determine title. The Supreme Court reversed, holding that because the order authorizing the conservator to remove the beneficiaries on Beadle's accounts was entered without notice to the beneficiaries and without hearting, the order was void as a matter of law. View "In re Estate of Beadle" on Justia Law

The Supreme Court reversed the order of the circuit court granting Defendant's motion to dismiss this tort action brought against an estate, holding that the statute of nonclaim, as opposed to the general three-year statute of limitations, governed Plaintiff's claims and that she timely filed her amended complaint pursuant to the applicable limitation period.Plaintiff filed an amended complaint against the special administrator overseeing the estate of the person with whom she was in an automobile accident. Defendant filed a motion to dismiss the complaint pursuant to Ark. R. Civ. P. 12(b)(6) on the grounds that it was barred by the applicable statute of limitations. The circuit court granted the motion. The Supreme Court reversed, holding that the circuit court erred in applying the general three-year statute of limitations in dismissing Plaintiff's amended complaint as untimely rather than applying the applicable limitation period set forth in the statute of nonclaim. View "Marcum v. Hodge" on Justia Law

The Supreme Court reversed the opinion of the court of appeals in this case involving the concept of "waste" as it exists in Kentucky law, holding that Ky. Rev. Stat. 381.350 is applicable only in instances in which a party has pled voluntary waste.Under Ky. Rev. Stat. 381.350, a life tenant who commits waste against the corpus of an estate shall "lose the thing wasted and pay treble the amount at which the waste is assessed." At issue was when the statute of limitations began to run in this case, a question that required resolution of the concept of "waste" as it exists in Kentucky law, which required the Supreme Court either to affirmed its longstanding distinction between voluntary and permissive waste or to collapse the two categories into simply "waste." The Supreme Court held (1) long-standing case law continues to be accurate statements of the law of waste as it exists in Kentucky, therefore, section 381.350 continues to apply only to claims of voluntary waste; and (2) the trial court correctly determined that the plaintiff in this case stated claims for voluntary waste. View "Ferrill v. Stock Yard Bank & Trust Co." on Justia Law

The Supreme Court affirmed the judgment of the district court ruling in favor of Jacqueline Moncur and Rosemary Kinniburgh, co-trustees of the J. Kent Kinniburgh Revocable Trust, in this lawsuit brought by Janel Kinniburgh, one of the beneficiaries of the Trust, holding that the district court did not err.Janel, one of the trustees of the Trust, brought this action against her sisters, alleging that they breached certain fiduciary duties. The district court ruled in favor of the Trustees on most claims, concluding that the Trustees breached their duties of loyalty and impartiality but finding that Janel failed prove damages resulting from that breach. The Supreme Court affirmed, holding that the district court (1) erred when it found that the Trustees did not breach their duty to inform and report, but Janel failed to show that the Trust sustained damages; (2) did not err in concluding that the Trustees did not breach their duties of impartiality or prudent administration; and (3) did not err in deciding not to award attorney fees, monetary damages, or remove the Trustees. View "Kinniburgh v. Moncur" on Justia Law

In these consolidated appeals from the circuit court relating to the administration of the estate of Shirley Martin and of the trusts established by Carl Martin, Sr. and Shirley Martin the Court of Appeals reversed the order of the circuit court granting partial summary judgment in favor of Sherree Martin approving the payment of certain federal estate taxes from the Carl Martin Trust, the Supreme Court reversed and remanded the order in Case No. 21-0757 and affirmed the order in Case No. 22-0417, holding (1) the circuit court erred in concluding in Case No. 21-0757 that a preliminary injunction was warranted and that Sherree Martin should have been removed from her former fiduciary roles; and (2) the circuit court erred in concluding in Case No. 22-0417 regarding the payment of federal estate taxes. View "Martin v. Martin" on Justia Law