The world of people who can challenge a will has its limits.  A person challenging a will must have some recognizable “interest” in the will, and while the definition and scope of that “interest” may vary by jurisdiction, a property right that would be affected by a will contest is often sufficient.  In other words, if setting aside the subsequent will would put money in your pocket, then you likely have standing to challenge that will.  But what about someone with no pecuniary interest in the estate, like a replaced executor?  In Estate of Sobol, a California appellate court recently construed the scope of that “interest” under California law.

Here, the court dealt with a scenario in which Sonia Sobol executed a will that named Jay Rose as her executor.  Sonia later executed a codicil

The 7520 rate for July is holding steady at 2.2%.

The July 2014 Applicable Federal Interest Rates can be found here.

On June 12, the United States Supreme Court in Clark v Rameker resolved the question that has recently split the 5th and 7th Circuits— Are inherited IRAs protected from the beneficiary’s creditors in a bankruptcy proceeding? The Court unanimously held that they are not.

An inherited IRA is a traditional or Roth IRA that has been inherited by a beneficiary after the death of the owner. This term does not include an IRA that has been “rolled over” by a spouse beneficiary into her own IRA.

In order to make their decision, the Court had to determine whether an inherited IRA constitutes “retirement funds”, which are exempt assets in a bankruptcy estate.

The Court focused on three legal characteristics of inherited IRAs that led to their conclusion that

Another recent court decision has looked at the constitutionality of the State imposing state income tax on an irrevocable trust. Last year, the Court in McNeil v. Commonwealth of Pennsylvania held that Pennsylvania’s attempt to tax the McNeil trusts, whose connection to Pennsylvania was (1) the residency of the settlor at the time the trust was created and (2) the residency of the trust’s discretionary beneficiaries was an unconstitutional violation of the Commerce Clause of the United States Constitution.

If you are a lawyer, the following case provides a strict warning against being afflicted with “scrivener’s error” – an inadvertent drafting error that results in a failure of a will or an agreement to accurately reflect the intent of the parties.  In Will of Isasi-Diaz, the New York Surrogates’ Court discussed whether a court may resort to extrinsic evidence to correct a scrivener’s error.  The Court’s answer is: NO!

The executor of the will in Isasi-Diaz petitioned for a reformation of an article of the will on the grounds that the will was incomplete.  Specifically, the executor argued that the testator contemplated the division of her estate into three parts but disposed of only two, devising one-third of her assets to her sister and one-third to her nieces and nephews.  The will was silent on how the final third of the estate should

Last week, we discussed the important issue that settlors, beneficiaries, and trustees of a trust should be thinking about—Do You Know Which States Are Trying to Tax Your Trust?  Two states’ courts have recently looked at what constitutes sufficient minimum contacts to subject a trust to the State’s income tax laws.  In this blog, we will discuss Illinois’ decision in Linn v. Dep’t of Revenue.  Come back next week for our discussion of Pennsylvania’s decision in McNeil v. Commonwealth of Pennsylvania.

In a recent case before the New York Surrogate’s Court, an executor, the only beneficiary under a will, tried to represent the estate pro se.  Big mistake!  The Court, in Matter of Van Patten, held that the executor was improperly practicing law without a license.

The background is as follows: Decedent Philip Van Patten was an income beneficiary of a trust under the will of Charles A. Van Patten.  Carole Van Patten was the executor of the estate of Philip.  After the trustee filed an accounting for the trust under Charles’ will, Carol, as executor of Philip’s estate, filed pro se objections to the trustee’s accounting.  The trustee moved to dismiss the objections asserting that the executor lacked legal capacity to sue, arguing that Carol could not represent the interests of the estate pro se.

The court agreed and noted that while

In Estate of Weisberg, the New York Surrogate’s Court was faced with dual petitions for administration in the estate of Chaim Weisberg, an Orthodox Jew who died intestate.  One petition was filed by decedent’s sister, as designee of decedent’s mother, who claimed that decedent was unmarried at the time of his death and his mother was his sole distributee.  A cross-petition and motion for summary judgment was filed by Jannah Geaney, who claimed that she was legally married to decedent in an Islamic ceremony and was therefore his sole distributee and should be administrator of her husband’s estate.  This case focused on whether Geaney met her burden of making a prima facie case of entitlement to summary judgment.  The Court ultimately determined that she had not met her burden even though the Court found no material issue of fact that the decedent and Geaney

In an environment in which states are continuously searching for methods of increasing tax revenues, a major consideration for any settlor, beneficiary or trustee of a trust should be where the trust might be subject to income tax. The days of a trust being taxed in the state where it has its “principal place of administration” are quickly fading, as we enter into a new era in which states are increasing attempting to tax trusts with minimal contacts to the jurisdiction.

Depending on the circumstances in which they arrive in the position, a successor personal representative can have a lot of cleaning up to do.  Just how much looking back on the acts of her predecessor a successor fiduciary can – or must – do has been the subject of much debate.  Now, in Bookman v. Davidson, a Florida appellate court has, in a case of first impression, determined that a successor personal representative not only can pursue legal malpractice claims against an attorney retained by the original personal representative, a successor personal representative may have a duty to pursue such claims.

Under Florida law, the powers granted to the original personal representative flow to the successor personal representative.  The Florida Probate Code grants a personal representative the power to engage a lawyer to represent the personal representative and