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Actions Taken In Partnership May Affect Fitness To Serve As Trustee

April 29, 2015

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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 estate they owned.  Originally, Stuchlik and Margaret were the general partners and owners of 100 percent of the partnership interests.

Can A Virtual Adoption Be Undone?

April 23, 2015

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Can A Virtual Adoption Be Undone?

April 23, 2015

Authored by: Luke Lantta

The inheritance rights of adopted children have a long, complex history in many jurisdictions.  In Georgia, add into the adoption equation the equitable doctrine of “virtual adoption.”  In a virtual adoption, the ‘adopting parent’ orally agrees to adopt the child of another as his or her own without actually legally adopting the child and all parties act on the oral agreement to adopt.   Virtual adoption is not legal or statutory adoption.  It is an equitable remedy that is applied only upon the death of the ‘adopting parent’ to avoid an unfair result to the ‘adopted child’ by the application of intestacy laws.

As might be expected, these virtual adoption situations are very fact specific.  There must be evidence of an actual oral agreement to adopt and evidence that all the parties acted on that agreement.  The people involved don’t actually have to use

Ownership Succession for Family-Owned Banks : Building the Right Estate Plan

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This article describes what to do to protect the bank, your family and your investment.   Originally published on BankDirector.com.

For a number of community banks, the management and ownership of the institution is truly a family affair. For banks that are primarily controlled by a single investor or family, these concentrated ownership structures can also bring about significant bank regulatory issues upon a transfer of shares to the next generation.

Unfortunately, these regulatory issues do not just apply to families or individuals that own more than 50 percent of a financial institution or its parent holding company. Due to certain presumptions under the Bank Holding Company Act and the Change in Bank Control Act, estate plans relating to the ownership of as little as 5 percent of the voting stock of a financial institution may be subject to regulatory

How Far Does Direct Benefits Estoppel Extend?

April 16, 2015

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Under direct benefits estoppel (or the doctrine of election), a beneficiary must choose: either challenge the will (or trust) or accept the benefits provided under that instrument.  You can’t have it both ways, meaning you can’t both take benefits under an instrument and challenge that same instrument’s validity.  But how far can a fiduciary extend this defense?

In Harrison v. Harrison (unpublished Rule 23 order), an Illinois appellate court drew a line in the sand.  While direct benefits estoppel may apply to direct challenges to the validity of a will, it will not apply to actions construing a will.  The appellate court ruled that, even if a litigant accepts benefits under a will, he is not necessarily estopped from arguing that certain provisions of the will are void as against public policy and thus invalid.  Thus, although the construction of a will may ultimately lead to

Restoration Of A Ward’s Rights

April 8, 2015

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Restoration Of A Ward’s Rights

April 8, 2015

Authored by: Luke Lantta

A guardianship or conservatorship in Georgia is not necessarily permanent.  If a ward regains sufficient capacity to make or to communicate significant responsible decisions concerning his health or safety, a guardianship may be terminated.  Similarly, if a ward regains sufficient capacity to make or to communicate significant responsible decisions concerning her finances, then a conservatorship may be terminated.  Sometimes, the evidence is clear one way or the other but, at other times, the evidence conflicts.

In In re Loftus a/k/a Serewicz, the Georgia Court of Appeals instructed that, when the evidence conflicts on whether a ward has regained capacity, the probate court must hold a hearing on a restoration petition.  In this case, a licensed psychologist submitted an affidavit that the ward had regained sufficient capacity, but a licensed social worker submitted a report that the ward still

Dyke Arboneaux recognized by Chambers & Partners

April 7, 2015

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dykeChambers & Partners has recognized Private Client Partner, Dyke Arboneaux, in Chambers Global Guide 2015.

Each year, Chambers researchers conduct thousands of interviews with lawyers and clients worldwide to compile their rankings.   The publication ranks law firms, practices and individual lawyers in “bands” from one to six, with one being the best.  London Partner, Dyke Arboneaux, is ranked in Band 2 for her international private client work.   She also is recognized as a foreign expert for her private client work in the United Kingdom section of the publication, as well as her tax work in the U.S.   The publication notes that Arboneaux “is a well-respected trust and estate partner in Bryan Cave LLP’s London office and is sought after for US and cross-border tax and estate planning matters, including FATCA

Power Of Attorney Amended Revocable Trust

April 1, 2015

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Georgia makes it easy to amend a trust if the settlor expressly reserves such a power: it needs to be in writing and signed by the settlor.  In Strange v. Towns, the Georgia Court of Appeals showed us how leniently courts should interpret that power to amend.

Pauline Strange created an inter vivos trust naming herself as the initial trustee and three people, including her son Tony, as successor trustees.  Years later, Pauline executed a “General Durable Financial Power of Attorney,” and in the power of attorney Pauline stated that she wanted Tony to be the “executor” of her estate and the trust.  Pauline and Tony both signed the power of attorney.

This was good enough to amend Pauline’s trust because she reserved the right to amend in the trust instrument: “[t]he Settlor may at any time by duly executed

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