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Trustee Who Allegedly Breached Fiduciary Duty Denied Admission To Ohio State Bar

March 28, 2013

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The potential fallout for an individual trustee who has breached a fiduciary duty can extend beyond a judgment against him or her.  In In re Application of Wiseman, the Supreme Court of Ohio held that a bar applicant who “engaged in prohibited self-dealing while serving as the fiduciary of a trust” would not be admitted to the state bar.

Although the Ohio Supreme Court identified additional “underlying improprieties” that prohibited the applicant’s admission to the bar, the court separately identified “probate litigation” and “breach of fiduciary duties as trustee of life insurance trust” as several of the grounds for disapproving the applicant’s application for admission to the state bar.  Let’s take a brief look at these two issues which might give already-licensed attorneys some pause about serving as fiduciaries.  Because if it’s grounds for denial

When a Woman Loves a Woman: Another Federal Judge Strikes Down DOMA — Part II

Update: The United States Supreme Court heard oral arguments today in Windsor v. United States.

Update: On Friday, December 7, 2012, the Supreme Court announced that it would hear arguments in Windsor v. United States and Hollingsworth v. Perry. These cases, addressing the Defense of Marriage Act (DOMA) and California’s Proposition 8 will mark the first time the Supreme Court has addressed the question of same-sex marriage.

Update: On October 18, 2012, the Second Circuit Court of Appeals issued an opinion striking down the so-called “Defense of Marriage Act” (“DOMA”) in the ACLU and NYCLU’s Windsor v. United States case. The Court decided that when government discriminates against lesbians and gay men, the discrimination should be presumed to be unconstitutional. The Second Circuit was not the first appeals court to strike down DOMA,

Will SCOTUS Eviscerate DOMA? What Effects Could That Have on Tax Planning?

Today and tomorrow, the U.S. Supreme Court will be hearing oral arguments in two cases that could change the scope of marriage in the United States. Today, the Court is hearing oral arguments in Hollingsworth v. Perry, and tomorrow, the Court will be hearing oral arguments in the case of United States v. Windsor.

The cases contain a myriad of questions, but if the Court decides to get past the procedural questions and issue rulings on the substance, significant changes could be in store regarding the Defense of Marriage Act (“DOMA”) and the federal treatment of same-sex marriages. For a discussion of all of the various constitutional issues the Court may address in these cases, see Erwin Chemerinsky’s article, “Chemerinsky: Same-sex marriage battle goes before the Supreme Court“.

Contract To Make And Keep In Force Reciprocal Wills Must Satisfy Statute Of Frauds

March 26, 2013

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Not surprisingly, in Hankins v. Bartlett the North Carolina Court of Appeals ruled that a contract between a husband and wife to make and keep in force reciprocal wills must satisfy the statute of frauds.  If you’re interested in why, keep reading.

Trustee Was Authorized To Convey – Not Distribute – Property To Estate Of Deceased Trust Beneficiary

From BryanCaveFiduciaryLitigation.com

Time to get into the weeds on the scope of a trustee‘s powers.  There are basically two sources of power for a trustee – the trust instrument and state law.  Where those two intersect, overlap, conflict, or diverge is where you will likely find the bulk of fiduciary litigation about trustee powers.

Can A Breach Of Fiduciary Duty Land A Fiduciary In Jail?

March 21, 2013

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We spend a lot of time here looking at civil cases involving corporate and individual fiduciaries.  That doesn’t mean that the wrongful acts underlying a breach of fiduciary duty can’t also pose criminal problems for a fiduciary.  Occasionally a criminal fiduciary case catches our attention, like the United States District Court for the Eastern District of Tennessee’s opinion in Elkins v. Gibson (link provided through Justia.com).  This was a case where a fiduciary sued a police detective for malicious prosecution stemming from a warrant issued for the fiduciary’s alleged theft from his principal.  The fiduciary was arrested but was not convicted of any crime.  Why we’re interested is because the alleged theft took place using a power of attorney.

The federal court dismissed the plaintiff’s case finding that the detective was entitled to qualified immunity.  Specifically, the federal court found that at the time the objectionable warrant was issued, the

Trustee Was Authorized To Convey – Not Distribute – Property To Estate Of Deceased Trust Beneficiary

March 19, 2013

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Time to get into the weeds on the scope of a trustee‘s powers.  There are basically two sources of power for a trustee – the trust instrument and state law.  Where those two intersect, overlap, conflict, or diverge is where you will likely find the bulk of fiduciary litigation about trustee powers.

In Rendall v. Black, the Court of Appeals of Kentucky dug into both the trust instrument and Kentucky trust law to reverse a local circuit court’s ruling that declared a 1994 deed void ab initio based upon the language of a trust agreement.  In doing so, the appellate court got to differentiate between the trustee’s power to distribute income versus the trustee’s power to sell off the corpus of the trust.  And we saw a brief – and curious – appearance of the trust pursuit rule.

$5 Million Federal Estate Tax Exemption Doesn’t Mean You’re Safe From Tax at Death

Written with assistance from our Spring Extern Debra Faulkner

When the American Taxpayer Relief Act was enacted in early January, for many Americans, it all but eliminated the concern over the estate and gift taxes by making the $5,000,000 exemption (indexed for inflation) permanent. While the new law provides clarity and a sense of permanency, beware of becoming too complacent: 21 states and the District of Columbia still have estate or inheritance taxes. Two states – Maryland and New Jersey – have both.

The state estate and inheritance tax legislation, much like the federal estate tax legislation, has been notoriously volatile. In 2001, all 50 states had some form of death-time transfer tax, either an estate or an inheritance tax. In 2013, only 21 states have an estate or inheritance tax and in two of those states – Delaware and Tennessee – the taxes are set to expire. The exemption

Trust Termination Failed Where Petitioner Could Not Demonstrate Circumstances Not Anticipated By The Settlor

March 13, 2013

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It usually takes a lot to convince a judge to terminate a trust.  The grantor wanted assets held in trust for a reason.  Therefore, if you want to go against the grantor’s intent and terminate a trust, then you better give the court a very good reason why termination is appropriate.  And, there may very well be good reasons to terminate a trust.  That’s why many states have a statutory method for terminating or modifying a trust.

In Kristoff v. Centier Bank, Amy Jean Kristoff tried to use Indiana‘s statute to terminate or modify a trust created by her mother.  The Court of Appeals of Indiana found that Amy did not satisfy her burden under the statute because Amy could not demonstrate the existence of circumstances not anticipated by the settlor of the trust.

What were the unanticipated circumstances Amy was claiming warranted termination of the trust?

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