Justia Trusts & Estates Opinion Summaries

Robert Feldman ("Feldman") and the law firm of Haddon, Morgan & Foreman petitioned for relief from a probate court order requiring the firm to provide information to the special administrator concerning its representation of Feldman in a criminal prosecution for the murder of his wife Stacy, and to deposit funds held in its client trust account into the registry of the court. In response to the assertion by the special administrator that Colorado’s “slayer statute” applied to the funds at issue as proceeds of the decedent’s life insurance policy, the probate court determined that if Feldman were later found, in the manner prescribed by the statute, to be the decedent’s killer, he would be ineligible to receive those proceeds. Against that eventuality, the probate court found that compelling the return of the unearned funds in the firm’s client trust account would be the only way to protect the children’s interests, and that the court’s equitable powers permitted it to do so. The Colorado Supreme Court determined the probate court abused its discretion by issuing its order without weighing the considerations inherent in preliminarily enjoining the law firm from expending further funds in the representation of Feldman. In addition, however, because the slayer statute expressly protected third parties who receive a payment in satisfaction of a legally enforceable obligation from being forced to return that payment or from liability for the amount of the payment, no finding of a reasonable likelihood of success in attempting to force the return of the insurance proceeds would have been possible. Given this resolution, the Supreme Court found the disclosures ordered by the probate court would not have served their intended purpose. View "In re Feldman" on Justia Law

This case was an estate-administration case that was only partially before the Alabama Supreme Court. Perry Eugene Cox, Jr. ("Cox"), appealed a judgment made final by the Shelby Circuit Court ("the trial court") under Rule 54(b), Ala. R. Civ. P. Specifically, the trial court held that Cox's counterclaim against his sisters, Jennie Jo Cox Parrish, Debra Cox McCurdy, and Shirley Cox Wise, as coexecutors of the estate of their father, Perry Eugene Cox, Sr., was time-barred by Alabama's nonclaims statute, 43-2-350, Ala. Code 1975. The trial court dismissed Cox's counterclaim and certified its judgment as final and appealable, and Cox appealed. Because the trial court exceeded its discretion in certifying its dismissal of Cox's counterclaim under Rule 54(b), the Supreme Court determined no final judgment existed and the Court lacked jurisdiction to decide this appeal. Accordingly, the appeal was dismissed. View "Cox, Jr. v. Parrish" on Justia Law

Rice formed a trust for the benefit of his children in his home state, New York, and appointed a New York resident as the trustee. The trustee has “absolute discretion” to distribute the trust’s assets to the beneficiaries. In 1997, Rice’s daughter, Kaestner, moved to North Carolina. The trustee later divided Rice’s initial trust into three subtrusts. North Carolina assessed a tax of $1.3 million for tax years 2005-2008 on the Kaestner Trust under a law authorizing the state to tax any trust income that “is for the benefit of” a state resident. During that period, Kaestner had no right to and did not receive, any distributions. Nor did the Trust have a physical presence, make any direct investments, or hold any real property in North Carolina. The trustee paid the tax under protest and then sued, citing the Due Process Clause. A unanimous Supreme Court affirmed state court decisions in favor of the trustee. The presence of in-state beneficiaries alone does not empower a state to tax trust income that has not been distributed to the beneficiaries where the beneficiaries have no right to demand that income and are uncertain to receive it. The Due Process Clause limits the states to imposing only taxes that “bea[r] fiscal relation to protection, opportunities and benefits given by the state.” When a state seeks to base its tax on the in-state residence of a trust beneficiary, due process demands a pragmatic inquiry into what the beneficiary controls or possesses and how that interest relates to the object of the tax. The residence of the beneficiaries in North Carolina alone does not supply the minimum connection necessary to sustain the tax. View "North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust" on Justia Law

In this intrafamily dispute regarding farmland the Supreme Court affirmed the rulings of the district court denying substitute petitioners' petition for relief from elder abuse specifically seeking relief for the loss associated with certain real estate transactions, holding that the substitute petitioners failed to prove that their father was a vulnerable elder at the time of the challenged transactions.The substitute petitioners for their father filed this petition pursuant to Iowa Code 235F alleging that their brother and his son committed elder abuse against their father by unduly influencing the father to enter into below-mark-rate lease agreements to farm the father's land, to gift some of the land to the brother and his son, and to write a new will to reflect the gifted land. The district court concluded that the substitute petitioners failed to establish that their father was a "vulnerable elder" subject to "financial exploitation" within the meaning of chapter 235F. The Supreme Court affirmed, holding that the substitute petitioners filed to prove by a preponderance of the evidence that their father was vulnerable elder at the time of the challenged transactions. View "Struve v. Struve" on Justia Law

Willis Swenson appealed, and Kyle Mahlum cross-appealed dismissal of Swenson’s claims against Mahlum and Mahlum’s claims against Carol Hodgerson, Gerard Swenson, Lee Alan Swenson, and Mary Ann Vig (“third-party defendants”). This suit arose over the ownership and leasing of real property in Burke County, North Dakota. Willis Swenson (“Swenson”) and the third-party defendants are the children of Robert and Junietta Swenson. In 2004, Robert and Junietta conveyed the property to their children as joint tenants, reserving a life estate for themselves. In 2005, Robert died and Junietta became the sole life tenant. In 2008, Junietta leased the property to Swenson. Swenson agreed to rental payments of $20,016 per year, due in installments. In December 2009, Swenson leased the property to Mahlum for $31,022.50 per year. The Swenson-Mahlum lease became effective in March 2010 and stated it would expire in October 2019. In November 2011, Swenson signed a new lease with Junietta, beginning in 2012 and ending in 2022. The lease permitted Swenson to assign or sublet the property to any person. In July 2012, Lee Swenson was appointed guardian and conservator for Junietta. In January 2013, Lee Swenson, as guardian and conservator, leased the same property to Mahlum that Willis Swenson already was leasing to Mahlum in the December 2009 lease. The new lease required Mahlum to pay Junietta $31,122.50 each year. Junietta died in November 2013. Mary Vig, as personal representative of Junietta’s estate, informed Mahlum that future rental payments should be split and made to each of Junietta’s children in equal amounts. In January 2017, Willis and his daughter, Dayna Johnson, sued Mahlum for unpaid rent. Swenson alleged Mahlum was required to pay him under the 2009 lease, and Mahlum failed to pay any rent in 2013, 2014, 2015, and 2016. Mahlum answered and filed a third-party complaint, suing the third-party defendants for unjust enrichment. He alleged in 2013 he paid Junietta under the terms of the 2013 lease. He also alleged in 2014, 2015, and 2016 he paid rent to each of Junietta children. Mahlum claimed that the third-party defendants have been unjustly enriched, and that the third-party defendants be ordered to pay Mahlum any amounts the court finds he owed Swenson if Swenson obtained a judgment against him. After review of the circumstances of this case, the North Dakota Supreme Court determined the trial court erred in its findings, and reversed dismissal of Swenson’s breach of contract claim. On remand, the court must decide the amount of damages Swenson was entitled to recover for his breach of contract claim against Mahlum for unpaid rent in 2013, including whether Swenson failed to mitigate those damages. In addition, the court must decide Mahlum’s claims against the third-party defendants. View "Swenson, et al. v. Mahlum, et al." on Justia Law

Susan and Marby Hogen, as purported interested persons, and Rodney Hogen (collectively, appellants), appealed probate court orders settling the estate of Arline Hogen, and discharging Steven Hogen as personal representative of the Estate. Appellants argued, generally, the probate court lacked jurisdiction to enter an order for the complete settlement and distribution of the Estate, and that the court lacked authority or abused its discretion in requiring Rodney Hogen to pay from his share of the Estate all attorney feed by the State after the North Dakota Supreme Court’s remand. Finding the probate court had jurisdiction, and that it was not an abuse of discretion in the fee award, the Supreme Court affirmed. View "Estate of Hogen" on Justia Law

Jean Valer and Jane Haught appealed a district court order denying their motion for reconsideration of a judgment determining they failed to rebut the presumption they exercised undue influence over their father. As Ralph Bartelson’s health declined, his children agreed that he would live with Valer and that she and Haught would be paid to provide care for him. During this time, Ralph Bartelson executed a power of attorney appointing Valer as his attorney in fact and established a joint checking account, naming both Valer and Haught co-owners with rights of survivorship and allowing them to issue checks from the account. Neil Bartelson ("Neil") and Diane Fischer claimed that Valer and Haught misappropriated money from their father, and they petitioned for appointment of a guardian and conservator for him. In July 2008, the parties stipulated to the appointment of Valer as guardian for Ralph Bartelson and the appointment of Guardian and Protective Services (“GAPS”) as conservator for him. The parties’ stipulation required GAPS to investigate and pursue the claimed misappropriation of money from Ralph Bartelson. Ralph Bartelson died in August 2008. His will was ultimately admitted to formal probate, and GAPS was appointed personal representative of his Estate. GAPS subsequently moved for court approval of requests for payments from the Estate to Valer and Haught. Neil and Fischer objected to their siblings’ requests and reasserted their allegation that Valer and Haught had misappropriated money from their father. The parties agreed to the payments requested by Valer and Haught, conditioned on a resolution of the misappropriation claim. GAPS retained a forensic accountant to review transfers of Ralph Bartelson’s assets to family members, and the accountant determined Valer had received funds in excess of $154,000 and Haught had received funds in excess of $132,000. However, the accountant was not able to ascertain the reasons for many of those transfers, because Valer and Haught failed to provide documentation for the transfers. The North Dakota Supreme Court concluded the trial court did not abuse its discretion in denying Valer and Haught's motion for reconsideration, and affirmed. View "Estate of Bartelson" on Justia Law

Debra Heitkamp, the personal representative of the Estate of Nick Lyons, appealed a district court judgment in favor of Kevin Kabella following cross-motions for summary judgment, alleging the district court improperly determined the parties’ agreement was invalid because it fell within the limitation on the length of agricultural leases provided by N.D.C.C. 47-16-02. Kabella and Lyons entered into an agreement pertaining to farmland on March 29, 2007. The agreement gave Lyons possession and use of the property “in perpetuity.” In addition to receiving the property in perpetuity, the agreement stated Kabella could sell the property subject to Lyons’ right to purchase the property. Prior to the 2012 farming season, Kabella attempted to lease the property to Kermit Anderson Jr. Lyons refused to vacate the property asserting he was entitled to the use and possession of the property pursuant to his agreement with Kabella. Anderson brought an eviction action to remove Lyons from the property. Kabella was included as a defendant to allow a resolution of any issues regarding the agreement between Kabella and Lyons. In the litigation initiated by Anderson, Anderson and Kabella asserted the March 29, 2007 agreement between Kabella and Lyons was invalid under N.D.C.C. 47-16-02. Lyons passed away in May 2013, and Heitkamp was appointed personal representative of the estate. The estate used the property since that time. In March 2017, Heitkamp on behalf of Lyons' estate. sued for a declaration the agreement was valid in perpetuity. The district court granted summary judgment to Kabella and found the agreement was a lease that fell within the restrictions of N.D.C.C. 47-16-02, and due to the non-occurrence of any of the contingencies contained in the agreement, it expired on its tenth anniversary, March 29, 2017. The court awarded Kabella damages equal to the fair value of the use of the property subsequent to March 29, 2017. The North Dakota Supreme Court concluded "reasonable persons can draw more than one conclusion regarding the nature of the parties’ agreement," and therefore reversed judgment and remanded for a determination of whether this agreement was a lease subject to the limitations of N.D.C.C. 47-16-02, or a grant, option to purchase, or contract for deed outside the limitations of N.D.C.C. 47-16-02. Because the question of whether the limitation within N.D.C.C. 47-16-02 applied to the parties’ agreement remained undetermined, the Supreme Court declined to decide if the agreement was invalid after extending for a period of ten years. View "Heitkamp v. Kabella" on Justia Law

Thomas Biel and Marilyn Knudson appealed after the probate court approved a final accounting and distribution in the supervised administration of the Estate of Ann Biel Brandt. Biel and Knudson claimed the probate court: (1) erred in allowing Kathleen Bouchard to participate in the supervised probate administration as both the personal representative of the Estate and as an interested person; (2) erred in assuming jurisdiction over a separate civil action and deciding the merits of that action; (3) erred in determining the final distribution was consistent with Ann Biel Brandt’s testamentary intent to equally distribute her property to her three children; (4) erred in not awarding them attorney fees; (5) erred in awarding Bouchard certain expenses; and (6) erred awarding attorney fees to the Estate’s attorneys. Finding no errors, the North Dakota Supreme Court affirmed. View "Estate of Brandt" on Justia Law

Shirley Linn appealed a district court order denying her petition seeking a distribution of trust assets, after the court concluded the unambiguous language of the trust agreement did not compel the requested distributions. Stephen Linn, Deborah Wagner, and Mark Wagner cross-appealed the district court’s denial of their request for a recovery of their attorney fees incurred in responding to Shirley Linn’s petition. The North Dakota Supreme Court concluded the trust agreement’s language was ambiguous, and reversed and remanded this case for further proceedings with the district court. View "Trust of Linn" on Justia Law