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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In Harrison v. Harrison (unpublished Rule 23 order), an Illinois appellate court drew a line in the sand.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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When Trying To Invalidate A Trust, You Can’t Have Your Cake And Eat It Too

October 15, 2014

Authors

Luke Lantta

When Trying To Invalidate A Trust, You Can’t Have Your Cake And Eat It Too

October 15, 2014

by: Luke Lantta

If you want to challenge a trust’s validity, you can’t also accept a distribution from that trust.  You have to choose.  This is known as the doctrine of election.  In fact, as the Michigan Court of Appeals recently determined in In re William W. Weigle Revocable Trust (unpublished), in Michigan, once you’ve filed suit, you can’t then try to give it back.

In this case, William W. Weigle executed a trust amendment in 2007 under which the petitioners – who were Weigle’s neighbors – were to receive a one-half interest in Weigle’s house and 72% of the balance of the trust assets while respondent – who was also Weigle’s neighbor – was to receive the remaining 19% of the trust’s assets.  Weigle later amended his trust to grant petitioners all interest in the house

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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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Does Renunciation Rule Apply To Self-Settled Inter Vivos Trusts?

September 19, 2013

Authors

Luke Lantta

Does Renunciation Rule Apply To Self-Settled Inter Vivos Trusts?

September 19, 2013

by: Luke Lantta

We previously looked at the doctrine of election, where a party generally must renounce the benefits received from an estate (or trust?) before he or she can challenge the will (or trust?).  In Estate of Boyar, the Illinois Supreme Court sidestepped the question of whether the doctrine of election should be extended to challenges to amendments to living trusts in cases where the trust serves the same purpose as a will.

Where Illinois did not weigh in, a Florida appellate court did.

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Illinois Supreme Court Punts Question Of Whether Doctrine Of Election Extends To Challenges To Trust Amendments

May 2, 2013

Authors

Luke Lantta

Illinois Supreme Court Punts Question Of Whether Doctrine Of Election Extends To Challenges To Trust Amendments

May 2, 2013

by: Luke Lantta

In Estate of Boyar, the Supreme Court of Illinois had an opportunity to address an important question of Illinois trust law:  whether the “doctrine of election” applicable to will contests should be extended to challenges to amendments to living trusts in cases where the trust serves the same purpose as a will.  The trial court decided it did.  The Illinois appellate court also decided it did.  The Illinois Supreme Court, however, decided that there was no reason for the lower courts to address whether the doctrine of election should be extended to living trusts because that doctrine couldn’t be invoked under the circumstances present in the case.  Nevertheless, we get some good insight into when the doctrine of election could come into play in whatever contexts it might be applicable.

First, some quick facts.

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