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Expert Testimony Necessary On Standard Of Care? Maybe Sometimes, But Not Always.

January 4, 2017

Authors

Luke Lantta

Expert Testimony Necessary On Standard Of Care? Maybe Sometimes, But Not Always.

January 4, 2017

by: Luke Lantta

Whether a plaintiff needs an expert witness in a breach of fiduciary duty case to testify on the standard of care is a frequently debated topic.  In Heisinger v. Cleary, the Supreme Court of Connecticut weighed in on one side of that debate when it determined that no expert testimony was appropriate on the standard of care applicable to executors who seek professional advice to value the assets of an estate for preparation of estate tax returns.

A plaintiff brought claims that the executors of an estate breached their fiduciary duties to him, the decedent’s sole heir and the only beneficiary of a trust established under the decedent’s will, by, among other things, failing to supervise the work of others.  More specifically, the plaintiff claimed that the appraisers hired by the

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Do You Really Want To Use That Power Of Attorney To Give Yourself Something?

September 21, 2016

Authors

Luke Lantta

Do You Really Want To Use That Power Of Attorney To Give Yourself Something?

September 21, 2016

by: Luke Lantta

In Georgia, an agent acting under a power of attorney can give himself the principal’s property at the principal’s direction.  The Georgia Supreme Court reaffirmed that maxim in Anderson v. Anderson.

There, less than a week before the principal’s death, the agent used a power of attorney to execute a deed conveying to himself 280 acres of the principal’s property and another 500 acres of the principal’s property to himself and his siblings. The trial court set aside the deeds on the grounds of a breach of fiduciary duty.  The Georgia Supreme Court reversed and remanded because there was some evidence that the agent executed the deeds at the principal’s request.  There can be no breach of fiduciary duty when an agent acts pursuant to the principal’s express direction or with

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Trust Instrument Can’t Completely Insulate Trustee From Liability

September 2, 2016

Authors

Luke Lantta

Trust Instrument Can’t Completely Insulate Trustee From Liability

September 2, 2016

by: Luke Lantta

Settlors often want to give their trustees peace of mind that they can administer the trust without a court looking over their shoulder and second-guessing every act they take.  So, estate planners will often put a broad exculpatory clause in the trust instrument to relieve the trustee from liability for certain actions in administering the trust.  But, just as we have seen in other jurisdictions, in In re Scott David Hurwich 1986 Irrevocable Trust, the Court of Appeals of Indiana recognized that there is a limit as to how far the relief from liability can extend.

A settlor/beneficiary of a trust sued the trustee, alleging mismanagement of trust assets, commingling trust assets with the trustee’s own funds, conversion of trust assets, waste of trust

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Federal Courts Don’t Want To Hear Your Domestic Disputes Involving Trusts

October 29, 2015

Authors

Luke Lantta

Federal Courts Don’t Want To Hear Your Domestic Disputes Involving Trusts

October 29, 2015

by: Luke Lantta

There may be good strategic reasons to get a trust litigation case into federal court, especially if you’re the trustee.  But, just because you meet the diversity jurisdiction requirements to get the case into federal court doesn’t mean the federal court will hear the case.  The court may still find that an exception to otherwise perfectly good diversity jurisdiction exists.  While we more regularly see federal courts invoke the probate exception to diversity jurisdiction in fiduciary litigation cases, in McCavey v. McCavey-Barnett (unpublished), a federal appellate court affirmed a Georgia district court’s decision to not hear a trust dispute based on the domestic relations exception to diversity jurisdiction.

The case that the federal court declined to hear involved allegations concerning an inter vivos family trust.  A husband and wife deeded a

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How Much Notice Is Required To Remove A Georgia Executor?

September 2, 2015

Authors

Luke Lantta

How Much Notice Is Required To Remove A Georgia Executor?

September 2, 2015

by: Luke Lantta

Just how much notice is required before removing an executor in Georgia?  Maybe not all that much.

In Myers v. Myers, the beneficiary of several testamentary trusts filed a petition in probate court seeking, among other things, removal of the executor of the estate for numerous alleged breaches of fiduciary duty and a conflict of interest.  The beneficiary later withdrew the request that the executor be removed out of concern over an in terrorem clause and limited the petition to a request for an accounting.  In the amended petition, however, the beneficiary still repeated all of the original petition’s breach of fiduciary duty and conflict of interest allegations – he just didn’t specifically seek removal based on

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Limits Of Exculpatory Clauses In Trusts

August 12, 2015

Authors

Luke Lantta

Limits Of Exculpatory Clauses In Trusts

August 12, 2015

by: Luke Lantta

Many trustors want to give their trustees wide berth to administer the trust.  In a lot of cases that makes sense because the trustee does not need someone second guessing every discretionary act taken during the life of a trust.  One way a trustor may try to give a trustee room in administering the trust is by including an exculpatory clause in the trust that relieves the trustee from liability for actions that might otherwise be considered a breach of duty.  Of course, trustees appreciate these kind of clauses.  Some jurisdictions defer to these clauses; some do not.  In Rafert v. Meyer, the Supreme Court of Nebraska invalidated a provision in a trust that provided that the trustee had no duty to pay the insurance premiums on 3 insurance policies that constituted the corpus of

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Do You Need Testimony From Subscribing Witnesses To Admit A Will To Probate In Georgia?

July 8, 2015

Authors

Luke Lantta

Do You Need Testimony From Subscribing Witnesses To Admit A Will To Probate In Georgia?

July 8, 2015

by: Luke Lantta

The question of when subscribing witnesses are necessary to admit a will to probate can sometimes be a tricky one.  So tricky that it may even trip up a probate court.  The issues mainly seem to arise when dealing with shifting burdens when a will is challenged.

In a recent Georgia case, Reeves v. Webb (consolidated with Groenenboom v. Webb), there was a petition to probate the decedent’s will in solemn form, and an objection and caveat were filed on the grounds that there was a breach of fiduciary duty to the decedent, fraud, undue influence, and lack of testamentary capacity.  The probate court dismissed the petition by finding that the propounder did not make out a prima

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Does A Trustee’s Lawyer Owe A Fiduciary Duty To The Trust Beneficiaries?

May 20, 2015

Authors

Luke Lantta

Does A Trustee’s Lawyer Owe A Fiduciary Duty To The Trust Beneficiaries?

May 20, 2015

by: Luke Lantta

There is seemingly a line – at least under Florida law – that will not yet be crossed in the expanding world of third parties who purportedly owe duties to trust beneficiaries.  In Walther v. Kane (unpublished), the United States Court of Appeals for the Eleventh Circuit affirmed a federal district court’s ruling that, under Florida law, an attorney retained to represent only the trustee does not owe a fiduciary duty to the beneficiaries of the trust.  This decision stands in contrast to the trend in jurisdictions, including Florida, to chip away at the privity requirement when it comes to legal malpractice claims against estate planning attorneys.

Lawyers representing Florida trustees can rest a little easier for two reasons.  First, although unpublished, a federal appellate court has

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Actions Taken In Partnership May Affect Fitness To Serve As Trustee

April 29, 2015

Authors

Luke Lantta

Actions Taken In Partnership May Affect Fitness To Serve As Trustee

April 29, 2015

by: Luke Lantta

For how long estate planners have been using interconnections between trusts and family entities as estate planning techniques, only recently have appellate courts outside of New York started to tackle these issues in reported decisions.  In In re Estate of Stuchlik (as modified, in part, here), the Supreme Court of Nebraska addressed – but did not answer – a question left open by the Supreme Court of Georgia in Rollins v. Rollins: what’s the appropriate standard of care when a trust holds a controlling interest in a family entity?

Edward J. Stuchlik, Jr. and his wife, Margaret, had a pretty common estate plan.  They formed a limited partnership into which they conveyed all the farm real

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Beneficiary Ratification Of A Trustee’s Unauthorized Act

March 12, 2015

Authors

Luke Lantta

Beneficiary Ratification Of A Trustee’s Unauthorized Act

March 12, 2015

by: Luke Lantta

The trustee-beneficiary relationship can be a little bit like a marriage, so perhaps it’s not surprising that the phrase “speak now or forever hold your peace” has meaning for both.  If a trustee commits a breach of trust, a beneficiary may expressly or impliedly demonstrate satisfaction with the wrongful act thereby preventing that beneficiary from later challenging the act.  In other words, the beneficiary may ratify the trustee’s wrongful or unauthorized act by expressly agreeing to it or by failing to object to it.  In order for a beneficiary to ratify a breach of fiduciary duty, typically there must be proof that the beneficiary had full knowledge of all material facts.  All the more reason for trustees to consider giving beneficiaries more information about the trust administration and the trustee’s actions.  If the beneficiary gets the material information and

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