SOUTH-WESTERN LEGAL STUDIES IN BUSINESS
CASE UPDATES—WILLS, ESTATES, AND TRUSTS
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SOUTH-WESTERN LEGAL STUDIES IN BUSINESS
CASE UPDATES—WILLS, ESTATES, AND TRUSTS
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Title
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Summary
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Court May Approve Trust Revision over Objection of One Trust Beneficiary
Briefed Case | Appeals court held that a trial court acted properly in approving a restructuring of a trust that benefitted four parties. All parties agreed to a new settlement except one party who later claimed not to have agreed. Even if the lack of agreement had been clear, a court may approve a fair and reasonable settlement. (Updated November 2010) |
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Property at Time of Death May Not Go into Estate
Briefed Case | South Dakota high court held that the main assets of a person who died without a will passed to his wife by contract and by property law. The assets did not go to an estate subject to probate, so the state of South Dakota could not make a claim against the estate to recover costs of care prior to death. (Updated April 2010) |
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A Corporation Is a “Person” for Purposes of a Trust
Briefed Case | Appeals court held that where a banking account was held “in trust” for The Salvation Army, it would be presumed that Florida law meant for “persons” named in such trust accounts to include corporations. (Updated June 2009) |
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Trustee Beneficiaries Can Intervene in Trust When Interest Becomes Known
Briefed Case | Montana high court held that beneficiaries of a trust, who had been ignorant of their interest for years by the trustee, could now sue the trustee for an accounting of the handling of the trust in prior decades. (Updated January 2009) |
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Insurance Company May Request Court to Decide Which Heirs Get Policy Proceeds
Briefed Case | Court held that it was proper for a life insurance company to refuse to pay proceeds from a policy following the death of the policy holder when it was not clear who were the beneficiaries. When an estate is complex and there are multiple claims, an insurance company may request the court to resolve the dispute before making payment. (Updated December 2008) |
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Claims of Fraud in Making a Will Must Be Raised During Probate
Briefed Case | Appeals court held that members of a family who claim fraud in the making of a will must raise their claims during probate of the will, not file suit in tort after probate is completed. The purpose of probate is to allow an estate to be settled properly, so all relevant issues should be raised at that time. (Updated January 2008) |
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Challenge to Trust with No-Contest Provision Means Loss of All Trust Rights
Briefed Case | Appeals court held that a no-contest provision in a trust was valid and since there was no basis for a challenge to the structure of a trust, the beneficiary who sued to have the trust reformed lost all rights to property in the trust. (Updated March 2007) |
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Joint Checking or Savings Accounts Pass Automatically on Death of One Owner
Briefed Case | Appeals court affirmed that checking and savings accounts, owned by parties who check the box declaring they wish the accounts to be joint with right of survivorship, pass immediately at the death of one owner and do not go into the estate for probate. (Updated February 2007) |
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Estate Planners Liable for Malpractice in Planning Estates Improperly
Briefed Case | Texas high court held that the attorneys who prepared a will were liable for negligence to the estate for malpractice in advice given in preparation of the estate. The executors of the estate have the right to sue the planners to recover the loss of value in the estate. (Updated January 2007) |
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Persons Who Give Care to the Dying May Not Be Beneficiaries of a Will or Trust Changed by the Decedent
Briefed Case | California high court held that friends who provided care during the last two months of life were "care custodians" who could not benefit from a change in a trust made within days of death. Paid or not, such persons may not benefit under such circumstances. (Updated October 2006) |
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Revocable Trust Part of Estate for Calculation of Survivor’s Statutory Share
Briefed Case | Iowa high court held that a surviving spouse was entitled to the statutory share of her deceased husband's estate. He had placed all his property in a revocable trust prior to their marriage, but since he had control of the property in the trust at the time of death, it was part of the estate. (Updated July 2006) |
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Consumer Protection Statute May Be Used Against Trustee Who Engaged in Fraud
Briefed Case | Appeals court held that the state Consumer Protection Act could be used against a professional trustee who looted the accounts of numerous clients. As he was engaged in business and defrauded customers, he is subject to the treble damage provision of the statute. (Updated February 2006) |
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Insurance Proceeds for Damage to Homestead Exempt from Attachment
Briefed Case | Iowa high court held that insurance proceeds
received by an estate for damages to a home that was left as part of an
estate could not be attached by creditors of the estate. The proceeds were
part of the homestead. So long as the money was used to repair the home,
the funds could not be attached. (Updated June 2005) |
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Government Can Recover Funds from Estate That Were
Transferred to Obtain Free Medical Care
Briefed Case | North Dakota high court held that the government
could sue to recover funds that were transferred as a gift so the donor
could qualify for free Medicaid benefits. After the death of the donor,
the government could have the transfer declared void and recover the money
to pay for the medical care provided. (Updated April 2005) |
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Taking Money from Senile Neighbor Is Breach of Fiduciary
Duty and Theft
Briefed Case | Connecticut high court held that the evidence
supported a verdict that a neighbor took advantage of an elderly neighbor
who was confused about her finances. The court held that the neighbor committed
theft and breached her fiduciary duty not to abuse the trust of her neighbor. (Updated October, 2004) |
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Court Uses Constructive Trust to Allow Intent of
Donor to Be Fulfilled
Briefed Case | Appeals court held that since members of a family
delivered deeds to property after the death of their mother, the delivery
of the deeds were void. However, since the parties had agreed to deliver
the deeds to assist in preparation of their mother’s will, the court
would impose a constructive trust to achieve the desire of the mother. (Updated January, 2004) |
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Contract Agreed to by Heirs May Create Life Estate
Briefed Case | Heirs to property can create, by contract among
themselves, a life estate in property they jointly inherited. So long as
the agreement can be read as to that effect, the fact that the life-estate
was not created in a will or trust does not negate the ability to create
one. (Updated May, 2003) |
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Invalid Marriage Need Not Invalidate Grant of Property
Briefed Case | Mississippi appeals court held that
despite the fact that a marriage was invalid, because the woman hid the
fact of an existing marriage from the man she lived with for several years
prior to his death, his grant to her of his house is valid because it is
not clear that the deceit about the marriage would have affected his decision
to give her the house. (Updated September, 2002) |
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Statement of Concern in Will Is Not a Condition
Precedent
Briefed Case | Appeals court held that a will made
expressing concern over the possibility of death during a forthcoming trip
did not make death on that trip a condition precedent necessary for the
will to become effective. Years later, that will, with the condition not
having occurred, was valid. (Updated March, 2002) |
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Joint Bank Account Has No Automatic Right of Survivorship
Briefed Case | Appeals court held that a person
who has a joint bank account does not have a right of survivorship to the
account after the other account holder dies. The account is part of the
estate of the deceased and passes to the heirs. Unless a right of survivorship
is clearly established, it is presumed not to exist. (Updated March, 2002) |
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Parents Who Give Children Up for Adoption Cannot
Inherit from the Children
Briefed Case | A Washington high court held that
when a biological parent gives up all parental rights by putting a child
up for adoption, the parent severs all parental rights, including the right
to inherit the estate of the child, should the child die without a will. (Updated September 1, 2001) |
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Right of Survivorship to Accounts Lost By Withdrawing
Funds Prior to Death
Briefed Case | South Carolina high court held that
when a holder of the right to survivorship to a joint account withdraws
funds from the account prior to the death of the other holder of the joint
account, that the right of survivorship to the funds was lost and the funds
must be returned to the estate of the deceased joint account holder. (Updated July 1, 2001) |
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Punitive Damages May Be Imposed When Assets of
Estate Are Unlawfully Converted
Briefed Case | Missouri high court held that when
the representative of an estate is found to have converted the assets of
the estate, the representative is liable for all funds improperly converted
and may be liable for a common-law action for punitive damages. (Updated April 1, 2001) |
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Courts Focus on Intent of Testator When Conflict
Over Terms of a Will Arise
Briefed Case | Montana high court held that two
letters expressing a desire of testator to give a long-time companion a
house they shared in Montana was a valid will that was not contradicted
by a formal will made by testator that did not mention the Montana property
or the companion. (Updated March 1, 2001) |
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Irrevocable Disclaimer of Interest in an Estate
Cannot Be Revoked or Reformed
Briefed Case | Appeals court affirmed a probate
court decision that an irrevocable disclaimer of interest in an estate could
not be revoked, even though all parties to the estate testify that the disclaimer
did not produce the expected result. The law is clear that such disclaimers
may not be revoked based on notions of equity. (Updated March 1, 2001) |
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Notary's Signature to Will May Count as Witness
Signature
Briefed Case | Chancery court held that a will was
proven by having two signatures. One of the signatures was by a notary public.
Her signature was not just to attest to the signature of the other witness
but also to act as a witness. (Updated March 1, 2001) |
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Attempt to Revoke Disclaimer in Estate Ineffective
Briefed Case | South Carolina high court held that
written documents prevail over oral testimony, so a general disclaimer of
interest in an estate means the disclaimed interest passes by operation
of state law to the heirs next in line, not to the party the disclaimers
said they intended to receive their portion of the estate. (Updated February 1, 2001) |
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Wife's Right to Share of Husband's Property Not
Extinguished by Trust He Established
Briefed Case | Kentucky appeals court upheld a verdict
in favor of a widow who sued for her dower interest in her late husband's
estate. His effort to transfer all his property to his children immediately
before his marriage did not defeat his wife's interest since she did not
agree to give up her interest in his estate. (Updated December 1, 2000) |
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Widow to Get Share of Estate Plus Punitive Damages
for Interference by Others
Briefed Case | Court ordered that Anna Nicole Smith
be paid $450 million, her expectancy interest in the estate of her husband,
J. Howard Marshall, which he promised to give her. Marshall's son, who prevented
the estate from passing, committed an intentional tort by interfering with
the estate plan and will pay punitive damages when probate is complete. (Updated November 1, 2000) |
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Trade Usage Initials May Prove Joint Tenancy
Briefed Case | High court of Mississippi held that
the initials "JTWROS" on a securities account, with nothing more, established
the account as one of joint tenancy with right of survivorship, so the account
passed to the surviving spouse, rather than the estate of the deceased. (Updated November 1, 1999) |
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Delivery of Check and Combination to Safe Before
Death Did Not Make a Valid Gift
Briefed Case | Writing a check to a person immediately
before death and asserting that the contents of a safe also belonged to
that person, , did not create a valid gift. The check and contents of the
safe remain a part of the estate of the deceased. (Updated October 1, 1999) |
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Close Relationship With Brother Not Undue Influence
Briefed Case | Georgia high court upheld the validity
of a contested will. One brother left everything to his brother with whom
he worked for a living. Since the court found no evidence of undue influence,
just a close relationship, the will was held valid. (Updated October 1, 1999) |
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Plaintiff Has Burden to Establish Breach of Fiduciary
Duty
Briefed Case | Appeals court upheld trial court
ruling that plaintiff has duty, once existence of fiduciary duty is established,
to show that fraud, self-dealing, or negligence may have breached the duty.
Only then does the burden shift to the fiduciary to show there was no self-dealing.
(Updated April 1, 1999) |
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Life Insurance Beneficiary Not Changed By Terms
of Will
Briefed Case | Wife, who relinquished rights to
husband's estate at time of divorce, is still entitled to life insurance
proceeds as she was listed as beneficiary in an old policy that was never
changed. General terms in a will designating other parties as beneficiaries
of an estate, including its insurance, ordinarily do not overcome terms
of a policy. (Updated March 1, 1999) |
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Will Properly Revoked; Testator Died Intestate
Briefed Case | Testator revoked a 1985 will when
she drew up a new will in 1990. The 1990 will was ineffective due to lack
of witnesses. The 1985 will was held to be revoked because of her clear
intent to do so and because the later attempted will had a very different
distribution scheme. (Updated May 29, 1998) |
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"Shoeless Joe" Jackson's Signature on
His Will Is Government Property
Briefed Case | The original will of a famous baseball
player contained one of the few known copies of his signature. The beneficiary
of his estate claimed the will document as an asset of the estate. State
supreme court held that wills are part of the public record in Probate Court
and, therefore, not property of the estate. (Updated November 14, 1997) |
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