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How Far Does Direct Benefits Estoppel Extend?

April 16, 2015

Authors

Luke Lantta

How Far Does Direct Benefits Estoppel Extend?

April 16, 2015

by: Luke Lantta

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In Harrison v. Harrison (unpublished Rule 23 order), an Illinois appellate court drew a line in the sand.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

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California Appellate Court Rules That Trust Arbitration Provision Was Unenforceable

March 25, 2014

Authors

Luke Lantta

California Appellate Court Rules That Trust Arbitration Provision Was Unenforceable

March 25, 2014

by: Luke Lantta

Mandatory arbitration provisions in trusts are a relatively new concept, and only now are courts really beginning to weigh in on their enforceability.  In McArthur v. McArthur, add the First District Court of Appeal of California to the list of courts that have now considered the issue.  It determined that an arbitration provision in the inter vivos trust of Frances E. McArthur was unenforceable as against a trust beneficiary who brought suit to invalidate an amendment to the trust based on undue influence and lack of testamentary capacity.

Let’s start with the provision.  In 2011, Frances amended her 2001 trust to give a greater portion of the property to one of her daughters and to add a “Christian Dispute Resolution” provision that required mediation and, if necessary,

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