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Alaskan Conservator Breached Fiduciary Duties

September 8, 2011

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In Foster v. Professional Guardian Services Corporation, the Alaska Supreme Court determined that a court-appointed conservator breached its fiduciary duties through a number of acts and a failure to timely act.  Even though the conservator prevailed on a majority of the claims brought against it,  and thus prevailed in the “global” scheme of the litigation, the Alaska Supreme Court determined that the conservator could not have its attorney’s fees paid from the ward’s estate for those claims on which it lost.

In reaching its decision, the Alaska Supreme Court suggested that there is no such thing as a de minimis breach of fiduciary duty.

How Reproductive Technology Can Affect Your Estate Plan in Unforeseen Ways

On August 29, 2011, the 8th U.S. Circuit Court of Appeals in St. Louis held that an eight-year-old Iowa girl born two years after her father died is not eligible to receive his Social Security benefits.   If your grandmother, like mine, would have thought it was fishy that a child was born less than nine months after a wedding, imagine her reaction to learning that a child was born two years after the father’s death!

But with the use of assisted reproductive technology, like in vitro fertilization and artificial insemination, it IS now possible for a baby to be born more than 9 months after a parent dies. The use of assisted reproductive technology means that, if a parent preserves his or her genetic material (his sperm, her eggs, or their

Time Limit To Object To Qualifications Of A Personal Representative

September 6, 2011

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In Florida, there was a split between the courts of appeals on the time limit in which someone could object to the qualifications of a personal representative.  One court of appeals had decided that there was no time limit where the personal representative was a nonresident.  Another court of appeals had held that there was a three-month time limit.  In Hill v. Davis, the Florida Supreme Court resolved this split.

When Katherine Davis died, Douglas Davis, a resident of New York, filed a petition for administration claiming he was qualified to serve because he was the decedent’s stepson and was nominated under the will.  Davis was appointed as personal representative and a copy of the notice of administration was served on Solveig Edna Hill, the decedent’s mother, on July 24, 2007.  Over a year later, on August 6, 2008, Hill filed a motion challenging Davis’s qualifications to serve

Heir Stuck With Condo Fees Accruing After Owner’s Death

September 2, 2011

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In Georgia, if you inherit real property from a debtor by virtue of intestacy, you’re on the hook for debts relating to that property that accrue after the debtor’s death.  Even if that property goes into foreclosure.  Those are your debts, not the debtor’s.  So says the Georgia Court of Appeals in its most recent estate litigation decision. 

Intentionally Defective Irrevocable Trusts: A Great Way to Transfer Wealth, Especially In Low Interest Rate Environments

The current low interest rate environment provides excellent opportunities to transfer wealth to family members.   One approach commonly used to accomplish this goal is to sell assets to an intentionally defective irrevocable trust (“IDIT”).  An IDIT is an irrevocable trust for the benefit of someone other than the creator of the trust (the “Settlor”), perhaps Settlor’s descendants.  However, the “intentionally defective” component of the IDIT means that, for income tax purposes, the assets in the trust will continue to be treated as owned by Settlor.  Thus, Settlor’s sale of assets to the IDIT will not result in income tax consequences.   Additionally, Settlor’s payment of income taxes on the income earned by the IDIT provides an additional means of reducing Settlor’s taxable estate, while allowing the benefits of the income earned by the IDIT to benefit Settlor’s descendants.

Typically, Settlor will take back a promissory note for the assets

Lessons from 9/11

Lessons from 9/11

September 1, 2011

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

We are rapidly approaching the tenth anniversary of the September 11th tragedy. There is much to be learned from an estate planning perspective in the aftermath.  

Many of those who perished died without having executed a Last Will and Testament. If you die without a Will, the state in which you are domiciled at the time of your death will determine under the laws of intestacy where the property you held in your own name will pass. It takes many people by surprise, but the list of intestate takers or heirs may not be the people you want to inherit and they might not take in the percentages or shares you would want.

Texas Jury Finds That Husband Unduly Influenced Wife

August 31, 2011

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Last week, in In re Ward, the Tenth Court of Appeals of Texas (Waco) affirmed a jury verdict that the will of Doris Ward was unenforceable because her husband, Bobby Ward, exerted undue influence over her.  So, what does a textbook case of undue influence look like?  Well, it usually starts with remarriage. 

Who Has Standing To Challenge The Appointment Of A Guardian

August 29, 2011

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The class of people who can be appointed guardian or who are statutorily required to receive notice of a guardianship proceeding may be the only people who can later challenge the manner in which a guardian was appointed.  Seems pretty intuitive.  But what about a situation where two parties are divorced and one ex-spouse has a guardian appointed to go after the other ex-spouse?  And the ex-spouse getting sued claims that the guardianship proceeding was a fraud just to go after him?  In fact, the ex-spouse claims, his ex isn’t even incapacitated at all.

In Cacioppo v. Emolo, the New Jersey court of appeals was faced with that question: who has standing to challenge the appointment of a guardian?

Who Should Sign Arbitration Agreements?

August 26, 2011

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We are increasingly seeing more agreements between fiduciaries and clients that contain mandatory arbitration provisions.  Typically the agreements are signed by an “authorized representative” of the fiduciary and personally by the client.  But should other persons within the fiduciary’s organization also be signing on to the arbitration provision? 

Although not a fiduciary litigation case, the United States Court of Appeals for the Fifth Circuit decided in DK Joint Venture 1 v. Weyand that a corporation’s CEO and CFO – who were not signatories to their corporation’s arbitration agreements – were not bound to the arbitration agreement simply by virtue of being agents of the corporation.

This decision has some applicability for arbitration agreements between fiduciaries and clients.  Who should sign an arbitration agreement depends on what you’re trying to accomplish with it.