Justia Trusts & Estates Opinion Summaries

The Supreme Court affirmed the judgment of the district court granting an uncontested petition of the trustees of the Marvin S. Robinson Charitable Trust to retroactively modify the trust's terms to maintain its tax-exempt status as a "supporting organization" under the federal tax code, holding that Kan. Stat. Ann. 58a-416 authorized the retroactive modification of the trust.Under In Commissioner v. Estate of Bosch, 387 U.S. 456 (1967), which held that the Internal Revenue Service (IRS) and federal courts are not bound by decisions of lower state courts on issues of state law but that these entities will defer to decisions of a state's highest court, an order allowing the retroactive modification of a trust's terms to maintain its tax-exempt status is binding on federal tax authorities only if it emanates from the Supreme Court. The Supreme Court agreed to review the district court's order in accordance with Bosch and affirmed the district court's judgment granting the petition, holding modification of the trust was proper. View "In re Marvin S. Robinson Charitable Trust" on Justia Law

Richard Biddle and Brian Biddle questioned whether the Chancery Court of Tishomingo County, Mississippi had jurisdiction over their father’s estate. Brian and Richard also appealed the chancery court’s finding that there was no evidence of undue influence by their stepmother. After review, the Mississippi Supreme Court found venue and jurisdiction were proper and that no evidence of undue influence was presented. View "In The Matter of The Estate of Frederick Adams Biddle" on Justia Law

The Supreme Court approved the decision of the First District Court of Appeal affirming the trial court's judgment concluding that this negligence action was untimely filed, holding that Fla. Stat. 733.710(1) extinguished the claim at issue in this case.Petitioners, who were injured in an accident by Thomas Morton, sued Morton's estate for negligently operating the car and his employer, the Lewis Bear Company (LBC), for vicarious liability under the doctrines of respondeat superior and dangerous instrumentality. The trial court ruled (1) section 733.710(1) barred Petitioners' action against the estate because they failed to file their claims within two years of Morton's death; and (2) because the Estate could not be held liable, LBC could not be held vicariously liable. The court of appeal affirmed. The Supreme Court affirmed, holding (1) because Petitioners' claims against the estate were filed beyond section 733.710(1)'s deadline and did not qualify under an exception, they were barred; and (2) the court of appeal correctly held that section 733.710(1)'s statute of non claim exonerated LBC from vicarious liability for Morton's negligence. View "Tsuji v. Fleet" on Justia Law

The estate of Joseph A. Muff brings three conversion claims against Wells Fargo Bank for allegedly failing to detect that Joseph’s stepson, Josh Paige, was stealing money from Joseph by way of fraudulently endorsed checks. After denying the estate’s motion to amend its complaint, the district court granted summary judgment in favor of Wells Fargo on all three claims. The estate appealed.   The Eighth Circuit affirmed in part, vacated in part, and remanded to the district court. The court concluded that the district court did not abuse its discretion in denying the estate’s motion to amend its complaint. Further, the court explained that because the Muff Corporate and Muff Farm accounts were not controlled by Wells Fargo, any injury to those accounts under a theory of conversion is not fairly traceable to Wells Fargo. In other words, the estate has not demonstrated a “causal connection” between the “injury”—Josh’s inappropriately removing funds from said accounts—and the “conduct complained of”—Wells Fargo’s allegedly allowing this to take place. Moreover, even assuming the existence of a confidential relationship under Iowa law could give the estate standing to sue, the factual record fails to support the existence of a confidential relationship in the first place. Because the estate has not demonstrated standing, the court wrote that it lacks jurisdiction over Count 3. As with Count 2, the district court should have dismissed the claim instead of entering summary judgment for Wells Fargo. However, unlike Counts 2 and 3, the estate has standing to pursue Count 1 in federal court. View "Larry Muff v. Wells Fargo Bank NA" on Justia Law

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