Walk on the Wild Side – Pet Trusts

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by Brooke Simons

Anyone who has a pet knows that they are more than just companions, they are members of your family. Often, when people make decisions about their estate plans, they want to take these furry members of their family into consideration – you may remember that Leona Helmsley famously left $12 million to her dog, Trouble. Amount aside, the general concept of pet trusts might be something to consider.

Creating a trust for your pet is not only prudent from a planning perspective, as it provides the person who will be taking care of your furry friend in the future the assets they need to do so, but also comforting to the owner in that they have taken all their loved ones into account in their plan.

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Safeguarding Estate Planning Documents

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by Carol Warnick

In light of the recent dramatic weather events, including hurricanes and tornadoes, it is a good time to discuss preservation of estate planning documents.  In many instances, people escape from their homes with only the clothes on their back, or even if they do have a bit of time to gather items to take, they may not think about their estate planning documents.

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New IRS Addresses for Filing Estate Tax Returns

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by Jody H. Hall, Paralegal

The Instructions for Form 706 released in November 2018 included new addresses; however, we felt a reminder could be useful since the filing address changed mid-year.  Effective for United States Estate (and Generation-Skipping Transfer) Tax Returns (Form 706) filed after June 30, 2019, Form 706’s should no longer be sent to the Cincinnati campus for filing, but should instead be sent to:

Department of the Treasury
Internal Revenue Service
Kansas City, MO  64999

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Reminder – Mandatory Notice Provisions in CUTC

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by Brooke Simons

As we have just passed the one-year anniversary of the CUTC being signed into law, now seems like an appropriate time to go over a few reminders with regards to its mandatory provisions – in particular the Notice provisions. 

The CUTC is generally considered to be a default statute – that is, a statute that can be overridden by the settlor’s intent as reflected in deliberate drafting of the trust instrument.  However, there are thirteen (13) mandatory provisions in the CUTC that cannot be drafted around, regardless of the settlor’s intent.  Section 15-5-105 lists the thirteen (13) mandatory provisions under the CUTC.  Amongst these thirteen provisions are two “notice” requirements that must be satisfied. 

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Wyoming Creates a New Chancery Court Which Will Hear Trust Cases

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by Carol Warnick

Wyoming has created a chancery court which will be authorized to hear cases in fifteen (15) specific areas, including cases alleging breach of fiduciary duty and transactions governed by the Wyoming Uniform Trust Code, in addition to hearing business disputes.  This represents a significant change in the way many trust disputes, as well as business disputes, will be handled in Wyoming. 

Effective March 15, 2019, the special court of limited jurisdiction, called the Chancery Court of the State of Wyoming, was authorized to assist in the expeditious resolution of disputes involving commercial, business, trust and similar matters.  It is directed “to employ nonjury trials, alternative dispute resolution methods and limited motions practice and shall have broad authority to shape and expedite discovery as provided in the rules adopted by the supreme court to govern chancery courts.”  WYO. STAT § 5-13-115 (a). 

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Be Wary of Colorado Entity Renewal Notices from Unofficial Sources

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by Jody H. Hall, Paralegal

In the past week, our firm has had several clients receive in the mail, and fortunately ask us about, a form titled “2019 – Period Report Instruction Form (Colorado LLCs)”.  This form purports to advise the client that the annual report or renewal for their entity is now due; however, the form is not from the Colorado Secretary of State but is instead from a non-related company.  The form does list the specific entity name and address information and looks deceptively official; however, it also specifically states “… is not a government agency and does not have a contract with any governmental agency to provide this service.”

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No-Contest Clause Upheld by the Wyoming Supreme Court With No Probable Cause Exception

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by Carol Warnick

No-contest clauses (sometimes called in terrorem clauses) are extremely common in today’s litigious society. A no-contest clause essentially makes all gifts under the will or trust conditional upon not challenging the document. Many clients are concerned about a beneficiary (or a disinherited heir) contesting their estate planning documents, especially if the client wants to hold a beneficiary’s assets in trust or restrict or cut off a potential beneficiary’s idea of what they might inherit.  In my practice, clients are asking for them much more frequently than when I first began doing estate planning in 1990.  This is particularly true with blended families where there may be a greater potential for disagreement among the various beneficiaries or between those who are favored by the plan and those who feel they were wronged by the dispositive terms.  Trust and estate litigation is frequently driven by emotion, and many times the beneficiary’s complaints are not rational, thereby leading to protracted litigation and waste of the trust or estate’s assets.  This is what the settlor is typically trying to avoid by the use of a co-contest clause. Read more

Litigation Victory

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by Carol Warnick

The Holland & Hart Trust and Estate Litigation Group announces a big litigation victory.  After a three-day trial, ruling from the bench, the court upheld our trustee client’s interpretation of a trust in defeating a claim that there was a contract to make a trust.  In addition, we were able to enforce a no contest clause against the beneficiary bringing the claim and prevailed in enforcing a fee-shifting provision contained in the document.  Congratulations to our team of litigators and our Persuasion Strategies consultant who combined to bring home this victory!

Your Secret’s Safe with Your Estate Planning Attorney, Or Is It?

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by Lauren A. Morris

A mother visits her attorney to discuss her estate plan. She expects that the conversations she has with her attorney will be forever confidential and privileged, particularly when she wishes to guard uncomfortable realities from her family members, such as her desire to disinherit her son. Upon the mother’s death, her disinherited son figures out that he is in fact removed from her estate plan. Here we have the classic scenario in which a snubbed child wants to challenge the provisions in the estate plan to prove that the decedent did not intentionally fail to provide for him. But with the mother now deceased, how do we determine her actual intent?

The mother’s estate planning attorney is in the next best position to ascertain her intent, but doesn’t the attorney’s duty of confidentiality to the mother prevent him from disclosing any information he may have regarding her intent, specifically when the mother thought she was speaking in confidence? Read more

Avoiding Fiduciary Conflicts of Interest

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by Carol Warnick

It is very difficult for a trustee to have conflicts of interest without breaching the duty of loyalty.  We typically think of trustee conflicts as they relate to self-dealing by the trustee, which is almost always a problem and for which the beneficiaries can obtain redress.  But I have seen more conflicts lately in my practice where a trustee is trustee of different trusts that have conflicting interests, or the trustee is serving as trustee of a trust and also as personal representative of an estate whose interests are in direct conflict with each other.

When faced with a conflict situation, a trustee needs to take action before he or she breaches the duty of loyalty, which is a bedrock duty owed by all fiduciaries.  Restatement of Trusts § 78 (1) states that a “trustee has a duty to administer the trust solely in the interest of the beneficiaries . . . .”  That is not possible when the two trusts (or the trust and the estate) have conflicting interests and what the fiduciary does as trustee of one trust would be detrimental to the other.  One example would be engaging in a specific transaction that is beneficial to the beneficiaries of one trust but harmful to the beneficiaries of the other trust or of the estate.  Read more