In the most recent installment of the McGuireWoods Fiduciary Advisory Services annual multipart series on recent fiduciary cases, developments in the law concerning various topics are examined through the following:
In the Matter of the William J. Raggio Family Trust, 460 P.3d 969 (Nev. April 9, 2020). Nevada Supreme Court found that the settlor’s surviving spouse, as trustee, did not have a duty to consider her other assets, including assets in a sub-trust, prior to making distributions to herself from a second sub-trust under the specific terms of the trust and Nevada law.
Canarelli v. Eighth Judicial Dist. Court in & for Cty. of Clark, 464 P.3d 114 (Nev. May 28, 2020). Nevada Supreme Court finds there is no fiduciary exception to attorney-client privilege.
In re Matter of Curtiss A. Hogen Trust B, 940 N.W.2d 635 (N.D. March 19, 2020). The North Dakota Supreme Court held that an order of the district court awarding attorneys’ fees, terminating a trust and affirmed on appeal continued to be subject to clarification by the district court so long as the clarification did not modify the district court’s original order.
Demircan v. Mikhaylov, 2020 WL 2550067 (Tex. May 20, 2020). A Florida District Court of Appeals held that a lower court did not err in permitting the modification of a trust pursuant to common law upon agreement of the settlor and beneficiaries, and that the enactment of a statute permitting judicial modification only upon the finding of certain circumstances did not abrogate or control the common law.
United States v. Argyris, 2020 WL 1957549 (U.S. Dist. Nev. April 22, 2020). A spendthrift trust does not protect assets from a writ of garnishment when a federal court orders restitution in a criminal case.
Ex Parte Huntingdon College, 2020 WL 1482371 (Alabama March 27, 2020). The probate court had no jurisdiction to approve trustees’ new funding plan because the Mobile Circuit Court approved a prior agreement governing the funding issue brought before the probate court and thus only the circuit court had jurisdiction over the action.
In re Estate of Little, 2019 Tex. App. LEXIS 7355, 2019 WL 3928755. A settlor who had the power to revoke the trust and was the sole beneficiary of the trust while alive was free to fund the trust and dispose of its property as the settlor saw fit.
Roth v. Jelley, 45 Cal. App. 5th 655, 259 Cal. Rptr. 3d 9 (1st Dist. 2020). Under California law, contingent remainder beneficiaries are entitled to notice in actions that eliminate their interest, even if such an interest is subject to divestment.
Ron v. Ron, 2020 WL 1426392 (S.D. Tex. Feb. 4, 2020). Under Texas law, a trust protector did not owe fiduciary duties to the grantor of the trust.
Hunter v. Hunter, 838 S.E.2d 721 (Va. 2020). A trust beneficiary may condition his request for relief on the court’s determination that the request would not trigger the trust agreement’s no-contest clause, and the beneficiary’s request to construe a purported waiver of the trustee’s duty to provide trust financial information does not trigger the no-contest clause.
Berry v. Berry, 2020 Tex. App. LEXIS 1884, 2020 WL 1060576 (March 5, 2020). Under Texas law, a co-trustee of a trust that owns an interest in a limited partnership cannot sue third parties through a derivative claim brought on behalf of the partnership.
Miller v. Bruenger, 949 F.3d 986 (6th Cir. 2020). The 6th U.S. Circuit Court of Appeals held that the Federal Employee’s Group Life Insurance Act does not give rise to federal-question subject-matter jurisdiction.
Gowdy v. Cook, 455 P.3d 1201 (Wyo. 2020). The Wyoming Supreme Court held that a trust beneficiary’s attempt to modify the terms of a trust agreement triggered the no-contest provision and the beneficiary thereby forfeited his interest in the trust.
In re Thomson, No. 1075 EDA 2019, 2020 WL 3440529 (Penn. Sup. Ct. June 23, 2020). Pennsylvania Superior Court analyzed the discretionary distribution standard where the terms of the trust required the beneficiary, prior to being eligible to receive any trust distributions, to demonstrate to the trustee that the beneficiary remains sober and capable of holding employment and making responsible financial decisions.
In the Matter of Joanne Black, etc. v. Bernard Steven Black, etc., – P.3d –, 2020 WL 1814272 (Colo. Ct. App. Apr. 9, 2020). The Colorado Court of Appeals holds in a matter of first impression that a Colorado probate court can exercise jurisdiction over the trustees and assets of foreign trusts when those trusts were funded with assets misappropriated from a Colorado conservatorship.
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Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.