December 22nd, 2011

It’s actually one of the first cases law students learn about in their contracts class – a distant relative comes to live with and care for a sickly aunt, sister, or uncle in alleged reliance on the sickly relative’s promise to leave the helpful relative something from the sickly one’s estate.  The sickly relative dies, leaving the helpful relative nothing.  Can the helpful relative sue to enforce the promise?  As with all things in the law, it depends.

In Georgia, if you want to enforce that promise, you’d have an easier time if the promise was made before 1998.  If after 1998, then you had better follow the pretty clear statutory requirements for a contract to make a will because those requirements supersede other equitable statutes and are strictly enforced.

In Newton v. Lawson, the Georgia Court of Appeals reminded us of how strict the Georgia statutory requirements are for making an enforceable contract to make a will. (more…)

December 21st, 2011

Guardians and conservators don’t get appointed because things are going swimmingly for the ward.  In a good many of these cases, a guardian and conservator are appointed because there has been some type of financial exploitation of the ward.  Once the ward has been protected going forward, the question turns to how to try to recover what the ward has lost from the exploitation and who has standing to bring the claims on behalf of the ward?

When it comes to a ward’s financial losses, in Kawecki v. Saas, the Appellate Court of Connecticut clarified that it is the conservator of the estate – and not the conservator of the person (similar to a guardian in other jurisdictions) – who has standing to bring a lawsuit to recover the ward’s financial losses. (more…)

December 19th, 2011

I understand why someone would want co-executors, co-trustees, co-attorneys-in-fact, etc.  Maybe it’s because they’re afraid of having too much power in one person’s hand.  Maybe it’s because they don’t want to offend a friend, child, or relative.  Maybe it’s because it may just be easier to have a few people with that power in case the other is indisposed.  I get it.  But, going in, they should also know it’s a recipe for litigation.

Co-fiduciaries often have to work unanimously – either by statute or by the underlying instrument.  Lack of unanimity leads to lawsuits.  Moreover, when, for example, one attorney-in-fact lives in the same state as the principal, the co-attorney-in-fact residing in another state may be cut out of the process.  Whether perceived or actual shenanigans exist, litigation may result.

In Rosenkrantz v. Feit, a Florida Court of Appeals considered whether one attorney-in-fact could pursue a lawsuit against her co-attorney-in-fact.  The trial court had dismissed the case on the grounds that the attorney-in-fact filing the suit had failed to state a claim against her co-attorney-in-fact.  The appellate court, however, disagreed. (more…)

December 16th, 2011

As corporate fiduciaries consolidate, merge, or otherwise combine with each other, trust departments are often tasked with administering trusts outside of their home state.  For example, a trust department in Florida may, for the first time, end up administering a New York trust.  Knowing which state’s trust law governs the administration of the trust is no small matter.

While corporate fiduciaries are usually well-acquainted with their home state’s trust code, they may not be as familiar with the trust codes and law that actually apply to that newly acquired trust relationship.  As a result, trustees may inadvertently end up administering the trust under the wrong standards by simply assuming that the home state’s trust code applies.

This is another reason why it’s so important to read every word in the trust instrument.  Even after reading the trust instrument, it’s then important to independently determine which state’s trust laws apply to the administration of the trust.  Failure to do so may either subject the trustee to liability for deviating from the applicable fiduciary duties or prevent the trustee from raising more favorable law in the event that it’s been sued.   The latter of which happened to the trustee in Corya v. Sanders. (more…)

December 14th, 2011

In a number of jurisdictions, there may be a presumption or inference of undue influence when a testator gives all or part of his or her estate to a person who is not the “natural object of the decedent’s bounty.”

In other words, a son or daughter is usually considered the natural object of a testator’s bounty so that the testator can give all of his or her estate to one child to the exclusion of the others without creating a presumption of undue influence on that basis alone.  Conversely, if a testator gives all of his or her estate to a friend or ‘stranger’ to the exclusion of his or her children, then that friend is usually not the natural object of the testator’s bounty and that may create a presumption of undue influence.

With that background, that’s why it is unusual that a trial court in Massachusetts recently determined that a testator’s friend and not the testator’s adopted daughter was the natural object of the testator’s bounty.  The Appeals Court of Massachusetts affirmed this part of the trial court’s decision in Purcell v. Landers, but reversed the trial court on failing to require trial testimony of the witnesses who attested to the will.

So, how does a friend become the natural object of a testator’s bounty while a daughter loses that status?  Threaten to set the testator’s house on fire with him in it. (more…)

December 12th, 2011

I’m guessing that most people don’t take the time to read the fine print on life insurance or IRA change of beneficiary forms.  And why should they, since it seems pretty self-explanatory: I once put my wife’s name in this box, now I want to put my kids’ names in that box.  The reason why you want to pay attention to that fine print is because – to be effective – that fine print usually has to be strictly complied with.

In Smith v. Marez, the North Carolina Court of Appeals, applying New York law, ruled that a decedent’s failure to strictly comply with the change of beneficiary form requirements for his IRAs meant that the IRA assets went to his wife and not his kids.

So what did Leonard George Smith do wrong? (more…)

December 8th, 2011

Of the many things trustees stay awake at night worrying about, I’m not sure where getting hauled into court in some far off jurisdiction fits on that list.  Wherever it falls onto the list, it’s probably a few slots higher for successor trustees who always have to wonder to what extent they can be held liable for their predecessors’ acts.

Fortunately, as the New Hampshire Supreme Court made clear in Fellows v. Colburn, when it comes to personal jurisdiction – and getting hauled into court in some far off jurisdiction – only your own acts count, not those of your predecessor trustee. (more…)

December 6th, 2011

We are delighted to announce the combination of Holme Roberts & Owen LLP into Bryan Cave LLP, effective January 1, 2012.

Please click here for more information.

December 5th, 2011

You can’t win a fight over a will if you don’t have standing to challenge the will.  We’ve previously looked at standing in the context of guardianship challenges and beneficiaries who thought they could pursue the estate’s claims better than the executor could.  Today, we take a look at who has standing to pursue claims that a will and several contracts were the products of undue influence and a lack of capacity.

In Matter of Estate of Glennie, the Montana Supreme Court reversed a trial court’s decision that a testator’s son lacked standing to challenge the will and to seek to set aside cattle sale and lease agreements entered into by a sibling and the testator.  In doing so, the Montana Supreme Court showed us what to look for under Montana law in order to determine standing. (more…)

December 2nd, 2011

We’ve previously discussed arbitration agreements in a number of contexts, including who should sign them and when courts have enforced them.  While whether to include an arbitration clause in your standard account agreement is a business decision (and you will find people with very strong opinions on both sides of this debate), if you decide to include one you better make sure that your boilerplate is up-to-date.  Especially in Florida and especially as it relates to statutes of limitation. (more…)