Trust BCLP

Trust BCLP

ARCHIVE

Main Content

Conflict Of Interest Warranted Judicial Removal Of Personal Representative And Trustee

October 31, 2013

Authored by:

Categories

Individual trustees who must administer real property often attempt to save the trust money by personally making certain improvements, repairs, or maintenance to the property.  They then charge the trust for the work they performed.  As the Nebraska Court of Appeals points out in In re Estate of Robb, however, these acts – however well-intentioned – may be self-dealing and can put the trustee in a position of a conflict of interest, which can warrant removal from that fiduciary position.

Delaware Supreme Court Decides Peierls Cases: Initial Law Governing Trust Administration May Change

October 29, 2013

Authored by:

Categories

They became known simply as the Peierls cases – the three opinions in which the Delaware Court of Chancery refused to accept jurisdiction over, and then “reform,” thirteen trusts created during the period 1953 through 2005.  None of the trusts was created or settled under Delaware law, and none was ever administered in Delaware.  Understandably, the Court of Chancery’s opinions caused much hand-wringing among Delaware trustees because there seemed to be an almost insurmountable hurdle to moving foreign trusts to Delaware.  At a minimum, they threw a well-established practice for Delaware trustees and practitioners into disarray.  In a series of three opinions addressing the Peierls inter vivos trusts, charitable lead unitrust, and testamentary trusts, the Delaware Supreme Court – while mostly affirming the Court of Chancery’s opinions – gave us a road map for how to bring an out-of-state trust under Delaware law and into Delaware

What Does It Take To Trigger The Shortened Statute Of Limitations For Breach Of Fiduciary Duty?

October 22, 2013

Authored by:

Categories

In many ways, Georgia’s 2010 Trust Code is like no other.   The drafters of the Trust Code looked at the 1991 Georgia Trust Act, Uniform Trust Code, and trust laws in other jurisdictions to arrive at a code that is in some ways similar to that of other states but in other ways uniquely Georgia.  Within the last year or two, questions arising under the 2010 Trust Code have started to make their way into decisions of the Georgia Court of Appeals and, more recently, into the decisions of the Georgia Supreme Court.

In the most recent of these decisions, Hasty v. Castleberry (a counterpart of which we looked at here), the Georgia Supreme Court looked at one of the concepts Georgia borrowed from the UTC (shortened statute of limitations after a “report”) and one of the uniquely Georgia concepts (diversification).

Dead Man Walking? Is a Deceased Person Incapacitated?

urnA Missouri Court recently ruled in In the Estate of Betty Jean Collins v. Tina Shoemaker (Mo. App. W.D. #75448, August 6, 2013) that a person who had died was not “incapacitated” for purposes of a Health Care Power of Attorney (HCPOA). The court decided that the right of sepulcher expressly granted by Collins in her HCPOA to her great-niece did not ever become effective so that, on the death of Collins, her great-niece as her health care attorney in fact had no power to carry out Collins’ wishes to have her body cremated.

The right of sepulcher, that is the right to choose and control the burial, cremation or other disposition of a dead body, is governed by statute in Missouri (R.S. Mo. § 194.119), as it is in many

Trustee Did Not Breach Fiduciary Duty By Favoring One Beneficiary In Distributions And Investments

October 17, 2013

Authored by:

Categories

The words in a trust instrument mean something.  So, too, does the absence of words in the trust instrument.  Therefore, when in a trust instrument a grantor gives a trustee the authority to favor one beneficiary over another, gives broad discretion in making discretionary distributions, does not require the trustee to consider certain information in making discretionary distributions, or permits a concentration of assets, the trustee – and a court – should carefully consider those words.

In O’Riley v. U.S. Bank, N.A., a Missouri appellate court reviewed a situation where a trustee supposedly favored a grantor’s spouse over his children in making discretionary distributions and in investing trust assets.

Termination Clause In Trust Was Not Triggered

October 15, 2013

Authored by:

Categories

What if all the termination events in a testamentary trust occured before the testator dies?  In Whitehead v. Whitehead, a Mississippi appellate court suggested that we still have to read the documents constructing the testamentary scheme together to effectuate the intent of the testator.

What did John J. Whitehead, Jr.’s will and codicils show when read together?

IRD, IRD, IRD is the Word: IRD Consequences of IRA Distribution to Charities

birdOnce again, the Internal Revenue Service reminds us in PLR 201330011 that a distribution from an IRA to a residuary beneficiary will not result in recognition of IRD (also known as income in respect of a decedent) to the estate or trust, as only the residuary beneficiary will recognize the IRD.

Here the Decedent’s Estate was the beneficiary of the Decedent’s IRA. Under the provisions of the Decedent’s Will, his Estate poured over to his Revocable Trust on his death. His Revocable Trust provided that each of two Charities were to receive a percentage of the residue of his Trust, and further provided that the Trustee could satisfy this percentage gift in cash or in kind and also could allocate different assets to different residuary beneficiaries in satisfaction of their percentage interest in

Federal Appellate Court Affirms Dismissal Of Widow’s Action For Damages Against Trustees For Filing Fraudulent Information Return

October 10, 2013

Authored by:

Categories

Update: On October 1, 2013, in Vandenheede v. Vecchio, the U.S. Court of Appeals for the Sixth Circuit affirmed the U.S. District Court for the Eastern District of Michigan’s judgment for the Defendants Vecchio and Borschke.   Plaintiff Mary C. Vandenheede sued Defendants alleging tax fraud under 26 U.S.C. § 7434.   The district court granted Defendants’ motion for summary judgment based on the fact that violations of 26 U.S.C. § 7434(a) fall on the “filer,” and not on every person involved in preparing the return.  The Court upheld the district court’s judgment because the Plaintiff failed to provide particularized facts from which one could infer that the Defendants knowingly issued false returns to the IRS.  Also, the Court stated that the Plaintiff failed to suggest a different or preferable way in which the Defendants should have categorized payments to her on the tax returns.

Read

The attorneys of Bryan Cave LLP make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.