McGuireWood has released its July 2018 Fiduciary Advisory Services summary of fiduciary cases. This summary, summarizes the following cases:
• In re Matter of the Estate of Anne S. Vose v. Lee, 390 P.3d 238 (Okla. Jan. 17, 2017) Decedent’s executor had a fiduciary obligation to the surviving spouse to file an estate tax return to elect portability of the deceased spousal unused exclusion amount even though under a premarital agreement the surviving spouse was not an heir or distributee of the decedent’s estate.
• Du Pont v. Wilmington Trust Company, C.A. No. 12839-VCS (Del. Ch. Oct. 6, 2017) Delaware Chancery Court refuses to grant trust beneficiary’s petition to remove the trustee of five directed trusts when the grounds for removal did not relate directly to matters of trust administration.
• Saccani v. Saccani, No. C078958, 2016 WL 6068962 (Cal. Ct. App. Oct. 17, 2016) California court interprets a shareholder agreement to permit a shareholder’s pre-death transfer of shares to a revocable trust after that shareholder gave another shareholder the option to purchase the shares after the transferring shareholder’s death, even though the shareholder agreement itself only authorized share transfers to trusts for the benefit of a shareholder’s descendants.
• Gray v. Binder, 805 S.E.2d 768 (2017) The Commissioner of Accounts had the authority to hear a petition filed by the administrator of an estate for advice and guidance regarding the interpretation of the will and the determination of the proper heirs of the decedent.
• Lawson v. Collins, No. 03-17-00003-CV, 2017 WL 4228728 (Tex. App. Sept. 20, 2017) An arbitration award is final and binding on all participating parties and has the effect of a court order, regardless of whether all parties agree to the terms of the arbitration award. Absent evidence of statutory grounds for overturning such award, or evidence that such award is the result of fraud, misconduct or gross mistake, an arbitration award will be affirmed and confirmed.
• Ajemian v. Yahoo! Inc., 84 N.E. 3d 766 (Mass. 2017), petition for cert. docketed sub nom. Oath Holdings, Inc. v. Ajemian (U.S. Jan. 19, 2018) (No. 17-1005) The Stored Communications Act (SCA) does not preventYahoo! from voluntarily disclosing emails from a decedent’s account to the decedent’s personal representatives at the request of the personal representatives; it remains to be settled whether the SCA compels Yahoo to do the same.
• Higgerson v. Farthing, 2017 WL 4224476 (Va. Cir. Ct. 2017) A trustee was held liable for breach of fiduciary duty and for excessive fees where the trustee was unnecessarily engaged in aggressive day trading and margin trading and his fees were not reasonable in relation to the work actually required to fulfill his fiduciary duties.
• Bradley v. Shaffer, 535 S.W.3d 242 (Tex. App. 2017) The transfer of a beneficial interest in trust property by a beneficiary was void because the trust contained a valid spendthrift provision, and the doctrine of after-acquired title is not applicable to a void transfer.
• Hodges v. Johnson, 2017 WL 6347941 (N.H. 2017) The Supreme Court of New Hampshire affirmed an order declaring a trust decanting void ab initio and removed the trustees for breach of duty of impartiality.
• Matter of Sinzheimer, 2017 N.Y. Slip Op. 31379(U) (Surr. Ct. New York Cnty.) Corporate trustee removed under the terms of the trust was not required to deliver the trust assets to individual co-trustee when a successor corporate trustee had not been appointed.
• IMO Ronald J. Mount, 2012 Irrevocable Dynasty Trust U/A/D December 5, 2012, No. CV 12892-VCS, 2017 WL 4082886 (Del. Ch. Sept. 7, 2017) Delaware Chancery Court holds that a trust instrument may allow a trust protector to act in a non-fiduciary capacity. Therefore, it dismissed a claim against a trust protector for breach of fiduciary duties.
• Laborers’ Pension Fund v. Miscevic, No. 17-2022 (7th Cir. Jan. 29, 2018) ERISA does not preempt the Illinois slayer statute, and the Illinois slayer statute applies where the deceased was killed by an individual found not guilty by reason of insanity.
• Metropolitan Life Ins., Co. v. Teixeira, Civ. No. 16.07486 (D.N.J. 2017) Interpleader protection does not extend to counterclaims that are not claims to the interpleaded funds.
• Harvey ex rel. Gladden v. Cumberland Tr. & Inv. Co., 532 S.W.3d 243 (Tenn. 2017) Trustee had authority to enter into predispute arbitration agreement with financial advisor, and outcome of arbitration bound beneficiaries.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.