KEEPING CURRENT P R O B AT E CASES BENEFICIARY LIABILITY: Estate of deceased beneficiary not vicariously liable for the trustee’s malfeasance. The decedent’s lifetime trust was divided into “family” and “marital” shares on the decedent’s death, and eventually the decedent’s stepchild became the trustee. The remainder beneficiaries were the decedent’s children. After the death of the decedent’s spouse, the parent of the trustee petitioned for an accounting. The trial court found that the trustee had violated fiduciary duties by making unauthorized distributions from the trust mainly to the surviving spouse and that the surviving spouse’s estate was jointly and severally liable for the trustee’s actions. On appeal by the trustee and the surviving spouse’s estate, the Utah intermediate appellate court in Matter of A. Dean Harding Marital and Family Trust, 536 P.3d 38 (Utah Ct. App. 2023), affirmed all the findings with respect to the trustee except concerning one portion of the damage award, which was remanded for recalculation and reversed with regard to the liability of the estate because it was procedurally improper and also substantively incorrect. The trustee made improper distributions to the surviving spouse, but the authority to make distributions came from the trust terms, not from the surviving spouse, and there appeared to be no law making those who benefit from unlawful acts liable for those acts. Nor did the trustee act as the beneficiary’s agent. The court noted that recovery might be had from the estate on a constructive trust theory, which should be considered on remand if the trial court Keeping Current—Probate Editor: Prof. Gerry W. Beyer, Texas Tech University School of Law, Lubbock, TX 79409, gwb@ ProfessorBeyer.com. Contributing Authors: Julia Koert, Paula Moore, Prof. William P. LaPiana, and Jake W. Villanueva.
Keeping Current—Probate offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
concluded it was properly pleaded or tried by consent. CHARITABLE GIFTS: Estate of donor and contingent beneficiary lack standing to object to modification of terms of gift. The decedent’s will gave one-half the residuary estate to Dartmouth College for the “upgrading and maintaining” of a golf course belonging to the donee with any excess funds given to the decedent’s foundation. In 2005, three years after the decedent’s death, the executor and the donee entered into a “Statement of Understanding” under which the donee agreed to use the gift to establish a quasi-endowment fund devoted to the upkeep and maintenance of the golf course. In 2020, the donee decided to permanently close the golf course and applied under the New Hampshire enactment of UPMIFA (N.H. Rev. Stat. § 292-B:6) to allow the fund to be used to support the donee’s varsity golf programs and related physical facilities. The estate was re-opened, and the appointed fiduciary and the foundation moved to intervene in the application. The motion was denied, the application was granted, and on appeal the New Hampshire Supreme Court affirmed in In re Keeler Maintenance Fund, No. 20220145, 2023 WL 4497988 (N.H. July 13, 2023), declining to extend the law of special interest standing as it applies to claims against trustees of charitable trusts to disputes over outright
charitable gifts and holding that the common law of cy pres has been superseded by the provisions of UPMIFA. The court expressly declined to state whether a breach of contract claim against the donee would be viable. DIVORCE: Ex-spouse’s heirs cannot take because of ex-spouse’s deemed death before the decedent. The Minnesota revocation on divorce statute, Minn. Stat. § 524.2-804, revokes all devises to the ex-spouse and deems the ex-spouse to have died immediately before the dissolution of the marriage but does not address devises to relatives of the exspouse. In Matter of Estate of Tomczik, 992 N.W.2d 691 (Minn. 2023), the Minnesota Supreme Court held that a devise of one-half of the residue to “my wife’s heirs-at-law” does not pass to the parents of the testator’s living ex-spouse. The court first held the testator intended to make a class gift based on a family relationship that does not exist at death and, second, that a statute revoking a devise to a former spouse indicates that the legislature also intended that dissolution of the marriage revoke devises to relatives of the former spouse. ELECTIVE SHARE: Transfer of property is fraud on the surviving spouse’s elective share. Tenn. Code § 31-1-105 provides that for purposes of calculating a surviving spouse’s elective share, the “net estate” of the deceased spouse includes property transferred with the intent to defeat the surviving spouse’s elective share rights. In In re Estate of Quinn, No. M2022-00532-COA-R3-CV, 2023 WL 5013257 (Tenn. Ct. App. Aug. 7, 2023), the Tennessee intermediate appellate court held that the following circumstances taken together indicate that transfers of real property the decedent made three days before death fall under the statute: the decedent had filed for divorce at the time of the transfers; one of the transfers creating a life estate
Published in Probate & Property, Volume 38, No 1 © 2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
24
January/February 2024
