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Creditors’ Rights To Seek A Determination Of Descent

April 29, 2014

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It’s a rare occurrence that someone would seek to not inherit assets from an estate.  But, if the heir has a judgment against him or her that would be satisfied by that inheritance, then there may be a reason to try to avoid taking from the estate.  What rights might a creditor have to force a reluctant heir to take estate property to satisfy the creditor’s judgment against the heir?  In Estate of Pawlik, the Court of Appeals of Minnesota told us how it works in Minnesota.

In Minnesota, a judgment creditor of an heir has a property right in a decedent’s estate if the judgment could be satisfied by the heir’s inherited property.  Thus, that creditor is an interested person who has standing to bring a petition for determination of descent under the applicable Minnesota statutes.

Buy-Sell Agreements, Earlier is Better

A Buy-Sell agreement can be a useful planning tool for emerging companies as well as more stable, privately owned companies. In the context of an emerging company, the use of a Buy-Sell agreement provides a pathway for an orderly exit from the business by an owner if the owners do not see eye-to-eye with each other with respect to creative direction, allocation of responsibilities or other issues.

To “Revoke And Replace” Or To “Amend” Prior Language In A Trust – Is There A Difference?

April 24, 2014

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Part of the challenge of trust and estate planning lawyers is trying to anticipate the ways in which the words in an instrument will be construed down the road.  And there’s no shortage of creativity on the part of those who try to construe these instruments a certain way.  Take for example a trust amendment.  If a grantor wants to unambiguously supplant prior language in his or her trust instrument, should the grantor merely “amend” the paragraph or should the grantor explicitly “revoke and replace” the paragraph?  Does it make a difference?

In In re The H & A Neumann Revocable Trust (unpublished), the Court of Appeals of Minnesota found that it didn’t make a difference – the language was supplanted.  A beneficiary of a trust claimed that when the grantors “amended” a paragraph in their trust agreement, the amendment was ambiguous

Collateral Estoppel Did Not Bar Claim For Implied Charitable Trust

April 17, 2014

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We occasionally see in the media and in our own posts, claims that a donation made to a charitable organization was not used in the way in which the donor intended.  In Choi v. Immanuel Korean United Methodist Church, we get some clues from the Georgia Court of Appeals on ways to structure those donations to achieve the donor’s intent and ways in which claims regarding those donations may fail or succeed.

The Chois made a $1,500,000 donation to a church in 2005 for the construction of a new building.  Although land for a new building was purchased in 2006, years later, the church still had not begun construction of a building.

In 2010, the Chois sued the church for breach of fiduciary duty under the Georgia Trust Act and sought imposition of a trust on the funds.  The trial court granted

New York Budget Bill Makes Changes to Trust Income Tax

New York Budget Bill Makes Changes to Trust Income Tax

April 16, 2014

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

The New York Budget bill made changes not only in the estate tax arena, as previously reported on this blog, but also to the income taxation of certain trusts.

Under law prior to the passage of the Budget bill, a resident trust created by a New Yorker was entirely exempt from New York income tax if there was (i) no New York resident trustee, (ii) no assets located in New York and (iii) no New York source income. The new law, effective for calendar years beginning January 1, 2014, provides that a New York resident beneficiary receiving a distribution of income from a New York State resident trust which is exempt from New York State income tax, will be taxed on that “accumulated distribution”. The new accumulation distribution tax, will not apply if the accumulated income was earned before 2014 or if the trust itself is subject to New

Conservator Did Not Have A Conflict Of Interest

April 15, 2014

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Often family members receive priority when it comes to being appointed conservator of an incapacitated adult.  If a conservator – who has control over the finances of the ward – is also named as a beneficiary in the ward’s will or recipient of some other of the ward’s assets upon death, the argument goes that the conservator is incentivized to not spend funds in support of the ward.  Is this a conflict of interest that precludes appointment of such a conservator or warrants removal?

In In re Estate of Lorraine McKitrick (via FindLaw), the Georgia Court of Appeals affirmed a probate court’s order that it did not.  In this case, the conservator was the ward’s son and had a potential death benefit in the ward’s accounts.  The ward had complained that the conservator refused to “spend any of the corpus of the Estate

Damages Against Executor/Beneficiary Who Breaches Fiduciary Duty

April 9, 2014

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When fiduciary litigation involves individuals, there is sometimes the risk that a successful plaintiff will get a judgment against an individual fiduciary but will never be able to collect the monetary damages award from that individual.  When a wrongful executor is also a beneficiary of an estate, making a successful beneficiary/plaintiff whole can get a little easier through the doctrine of set off.

In Georgia, under this doctrine, a legatee or owner of a distributive share in an estate may set off such share against a judgment against him unless special reason exists requiring collection of the judgment.  While Georgia probate courts have broad authority to set off a money judgment against a personal representative’s share of the estate, certain findings and calculations are necessary.  Thus, a probate court cannot just broadly prohibit an executor who breached his or her fiduciary duties from receiving any

New York Budget Bill Makes Changes to Estate Tax

New York Budget Bill Makes Changes to Estate Tax

April 8, 2014

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

statuteoflibertyAs previously reported on this blog, Governor Cuomo and the New York State legislature, both Assembly and Senate, were busy at work on the budget which contained modifications for the trusts and estates arena. A bill has finally been passed, which looks different from some of the earlier proposals. The new bill impacts the estate and trust world as follows:

Basic Estate Tax Exclusion Amount increases are to be phased in as follows for New York residents or non-residents owning real property located in New York State during the period listed:

 

 

 

  • April 1, 2014 – March 31, 2015 – $2,062,500;
  • April 1, 2015 – March 31, 2016 – $3,125,000;
  • April 1. 2016 – March 31, 2017 – $4,187,500;
  • April 1, 2017 – December 31, 2018 –

Administration Proposes Estate and Gift Tax Changes in 2015 Budget

Inside the Administration’s recently released budget proposal are a few notable proposed changes to the estate, gift and GST taxes, including a return to 2009 rates and exclusions, and the elimination of Crummey gifts and perpetual GST trusts. Keep in mind that the budget proposal is merely a wish list and many of these proposals have been on the list for many years without making it into legislation. Here are the proposals for the 2015 budget:

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