Recent Cases of Interest to Fiduciaries: January 2018

January 2, 2018

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:

Maxey v. Sapp, 796 S.E.2d 740, 034 Ga. App. 116 (2017) Conflicting evidence regarding oral instructions given at the time of a conveyance created uncertainty as to whether the conveyance resulted in a constructive trust.

Roberts v. Smith, 801 S.E.2d 915, 341 Ga. App. 823 (2017) Georgia law presumes that when family members hold property as joint tenants with rights of survivorship, a family member who furnishes consideration or makes mortgage payments without seeking contribution makes a gift to the other family members.

Ferri v. Powell-Ferri, ___ A.3d ___, 326 Conn. 438 (2017) A beneficiary’s right to withdraw trust assets upon reaching a certain age did not prohibit the trustee from decanting the trust to remove the beneficiary’s withdrawal right, or to make the beneficiary the settlor of the decanted trust, but it did not give rise to a claim for breach of fiduciary duty against the trustee, or transform the trust assets into marital property subject to equitable division in a divorce proceeding.

Ahern v. Montoya (In re Connell Trust), 393 P.3d 1090 (Nev. May 4, 2017) Court upholds summary judgement against trustee for breach of fiduciary duty with respect to improper trust funding.

In re Landon, 2017 Del. Ch. LEXIS 99 (Del. Ch. June 8, 2017) Settlement agreement among Executors and surviving spouse enforced because the parties reached agreement on all essential terms.

In re Trust under Agreement of Taylor, No. 15 EAP 2016, 2017 WL 3044242 (Pa. July 19, 2017). Judicial modification of trust is not permitted to amend a trust to allow beneficiaries to remove and replace a trustee.  Under Pennsylvania law, absent specific language in the trust agreement, the provision allowing judicial removal of trustees is the exclusive judicial means of removing a trustee.

In re: the Elizabeth A. Briggs Revocable Living Trust 898 N.W. 2d 465 (S.D. 2017) South Dakota statutory time limitation to contest validity of trust functions as statute of limitations/statute of repose and applies to claims of undue influence and lack of capacity.

Matter of Kent and Jane Whipple Trust, No. 69945 , 2017 WL 2813974 (Nev. June 28, 2017) Broad arbitration provision contained in trust agreement governed request for judicial declaration regarding consequences of property transfers.

In re: Estate of Grahek, No. 554 MDA 2016, 2017 WL 19011284 (Pa. Super. Apr. 27, 2017) Corporate trustee did not breach fiduciary duty where, upon sale of real property that was Trust’s sole asset, the trustee kept a portion of the proceeds in cash and invested the remainder in a stock portfolio, even where the financial crisis caused that stock portfolio to lose value.

Fielding v. Commissioner of Revenue, 8911-R, 8912-R, 8913-R, 8914-R (Minnesota Tax Court May 31, 2017) Minnesota statutory definition of ‘resident trust’ based on the domicile of the grantor when a trust becomes irrevocable was unconstitutional where the state lacked subject matter jurisdiction over the intangible assets of the trust outside of Minnesota and where the definition relied on connections to the grantor rather than the trust.

Jordan v. Hubbard, No. 1 CA-CV 16-0060, 2017 WL 1740206, at *1 (Ariz. Ct. App. May 4, 2017) Where all parties to a trust dispute agreed to arbitration, the arbitrator’s award was final and binding; the arbitrator’s analysis of the Trust Protector’s powers and rejection of a trust modification after initiation of arbitration proceedings did not amount to “evident partiality” or constitute an award in excess of his power.

Diversified Funding Grp., LLC v. Hendon, No. CV1700189VAPAFMX, 2017 WL 3014492, at *3 (C.D. Cal. June 12, 2017) Beneficiary’s interest in a trust bank account administered  in Arizona was not subject to an attempted execution on a judgment in California where California law does not permit execution against the interest of a trust beneficiary and because California courts lack jurisdiction to levy on a trust administered in Arizona.

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