Circumstances, laws, and taxes all change.  And, when they do, many settlors don’t want their beneficiaries to have to go into court to get permission to roll with the changes.  That’s why you often find a trust provision that permits non-judicial amendments to the trust.  The breadth of these powers to amend differ from a narrow power to amend to a broad power to amend, like the one before the Maryland Court of Special Appeals in Grueff v. Vito.  There, the power to amend a family trust provided:

This Agreement may be revoked, altered or amended from time to time by an instrument in writing, signed by the holders of not less than seventy-five (75%) interest herein and delivered to the Trustee.

The beneficiaries used that amendment power a number of times over the years.

Recently, a Missouri Court of Appeals found that a claim regarding the validity of a revocable grantor trust was time-barred, as the two-year statute of limitations to bring a claim contesting a trust’s validity had passed when the personal representative of an estate brought suit.

In Morris v. Trust Co. of the Ozarks, 2014 WL 947109, at *1 (Mo. Ct. App. Mar. 11, 2014), the Court found that Section 456.6-604 of the Missouri Uniform Trust Code barred a claim seeking to establish that the trust at issue had terminated as a matter of law at the grantor’s death.  Section 456.6-604.1(1) states that “a person may commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor’s death within. . . two years after the settlor’s death. . .”

A revocable trust, also

Update: On October 1, 2013, in Vandenheede v. Vecchio, the U.S. Court of Appeals for the Sixth Circuit affirmed the U.S. District Court for the Eastern District of Michigan’s judgment for the Defendants Vecchio and Borschke.   Plaintiff Mary C. Vandenheede sued Defendants alleging tax fraud under 26 U.S.C. § 7434.   The district court granted Defendants’ motion for summary judgment based on the fact that violations of 26 U.S.C. § 7434(a) fall on the “filer,” and not on every person involved in preparing the return.  The Court upheld the district court’s judgment because the Plaintiff failed to provide particularized facts from which one could infer that the Defendants knowingly issued false returns to the IRS.  Also, the Court stated that the Plaintiff failed to suggest a different or preferable way in which the Defendants should have categorized payments to her on the tax returns.

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Right now we are all in the peak of tax return filing season.  As part of the tax return process, many tax practitioners file information returns for the entities they represent. Any person, including a corporation, partnership, individual, estate, and trust, who makes a payment (such for as rent, wages, salaries, and annuities) must file an information return with the IRS to report the payment.  But what happens if a false information return is filed with the IRS?

In 1996, Congress enacted 26 U.S.C. § 7434(a), which gives victims of fraudulent filing activities a damage remedy against the perpetrators.  The provision applies whenever “any person willfully files a fraudulent information return with respect to payments purported to be made to any other person.”  It allows the subject of the false information return to recover from the person filing the return the greater of $5,000 or actual

There is a surprising but growing split of authority on the extent of fiduciary duties a trustee owes to beneficiaries of a revocable trust other than the settlor.  Remarkably, state appellate courts are dealing with these issues for the first time now.  We previously took a look at this issue when a Missouri appellate court ruled in In re Stephen M. Gunther Revocable Living Trust that “[b]ecause the trustee owed no duty to the beneficiaries prior to the settlor’s death, they are not entitled to an accounting of trust transactions prior to that date.”  In ruling this way, Missouri joined other states, such as Louisiana, in reaching this conclusion.  We also looked at an Arizona appellate court apply Michigan law to reach the same conclusion.  Seemed to make sense.

But, in late 2012, a closely

Applying Michigan law, in Pennell v. Alverson the Arizona Court of Appeals recently came out with a well-written opinion explaining when a trustee owes fiduciary duties to the remainder beneficiaries of a revocable trust.

When updating a particular estate planning document, it’s a good idea to double check that all estate planning documents reflect the testator or grantor’s desired changes.  So, for example, if you update a will, then it’s good practice to double check that you update any corresponding or affected language in a related trust document.  And, if you’re in the habit of using cover pages for trust documents, it’s best to make sure that the cover page actually reflects the text of the trust instrument.

In In re Eleanor V. Mirek Trust (unpublished), Joanne Kloss contended that Eleanor V. Mirek intended that she be the successor trustee of Mirek’s revocable trust upon Mirek’s death.  The Michigan probate court that heard the case, however, found that Mirek intended for her nephew, Warren Kriskywicz, to serve as the successor trustee.

To reach this decision, the probate court had to

Let’s just jump right into this one: in 2010, a Houston County, Georgia jury declared that a Will and a Revocable Trust executed by Thomas Hines, Sr., in 2002 were invalid, as they were the product of undue influence.

In Davison v. Hines, the Georgia Supreme Court affirmed the jury verdict.  The reason we just jumped right into the discussion of this case is because undue influence cases are fact-intensive.  So, let’s look at the facts that supported the verdict.

Courts repeatedly remind us of the necessity to be very explicit with the language in our trust instruments.  With some very narrow exceptions, the clear, unambiguous language of the instrument controls.  This is sometimes referred to as being bound by the four corners of the instrument.

Our latest reminder of the need to remove all assumptions, ambiguity, or inconsistencies from estate planning documents comes to us from Ohio in WesBanco, Inc. v. Blair.  Here, we had the son of the decedent claiming that the decedent’s will revoked or amended his trust thereby eliminating the decedent’s allegedly estranged girlfriend as a beneficiary under the trust.  The son claimed that the decedent had reserved the right to amend or revoke the trust and he did so when he executed his will.

Seems that if the decedent and girlfriend had a falling out and