by Kelly Dickson Cooper
In my practice, I regularly answer questions regarding the permissibility and advisability of modifying irrevocable trusts. With the enactment of a decanting statute in Colorado in 2016, these types of requests will only increase. One of the major hurdles in modifying irrevocable trusts (and a trap for the unwary) is the potential tax consequences of a modification. We often have to consider estate tax inclusion issues, the possibility of the imposition of gift taxes due to the modification, and the potential loss of generation-skipping transfer tax exemption for a trust. Read more
by Matthew Skotak
The Oklahoma Supreme Court recently upheld a ruling that has required the Personal Representative of an Estate to take the necessary steps to transfer the deceased spousal unused election (DSUE) to the surviving spouse. The case stems from the rights created by the federal gift and estate tax laws regarding portability. More specifically, beginning in 2010 one spouse was allowed to transfer, at death, his or her unused gift and estate tax exemption to the surviving spouse. Prior to 2010, each spouse had his or her own gift and estate tax exemption, but any portion of that exemption which remained unused by the spouse at death could not be transferred to the surviving spouse.
In In re Estate of Vose, 390 P.3d 238 (Okla. 2017), the Personal Representative of the Estate, one of the children of the decedent by a prior marriage, had refused to make the required election for transfer even though the surviving spouse agreed to pay the cost required to prepare the necessary Federal Estate tax return to do so. Read more
by Kelly Dickson Cooper
The rules and regulations surrounding the operation of family foundations contain traps for the unwary and prohibit self-dealing transactions. We regularly help families navigate the complex rules regarding self-dealing transactions for private foundations.
These self-dealing rules tripped up the Donald J. Trump Foundation, which has admitted that it has engaged in self-dealing. How do we know? A private foundation is required to file a Form 990-PF each year and that return requires a foundation to answer questions regarding its activities and transactions. The following question caused issues for the Trump Foundation: “During the year did the foundation (either directly or indirectly): Transfer any income or assets to a disqualified person (or make any of either available for the benefit or use of a disqualified person)? By answering “Yes,” the Trump Foundation has admitted that a self-dealing transaction occurred. The Trump Foundation’s Form 990-PF (and many other foundations’ returns) are available through www.guidestar.com.
by Kelly Dickson Cooper
Picture this: you are representing a beneficiary of a trust in heated litigation. The client is committed to the cause, but as time passes, the client stops returning your calls. Despite your best efforts, the client seems to have fallen off the radar screen completely. Late last year, the Colorado Ethics Committee provided guidance to attorneys who find themselves in this difficult situation.
Formal Opinion 128 states that if a client has gone missing since the representation began, the lawyer must take reasonable steps to locate the client, and, whenever possible, seek continuances of court deadlines, but still continue their efforts to contact the client. “Reasonable steps” may include hiring a professional investigator, searching public records, and/or contacting family or friends of the client. Read more
by Jody H. Hall, Paralegal
As of Monday, August 7, 2016, practitioners can now search for probate and trust cases in the Integrated Colorado Courts E-Filing System (“ICCES”). In the past, Colorado probate estate and trust cases were only available for viewing by attorneys of record. If someone needed to determine if a case had been opened, he or she would need to contact the court clerk’s office and often pay a search fee. In the most recent release of ICCES, registered users can search to determine if a probate estate or trust matter has been opened; however, the documents themselves will only be available for online viewing to parties of record and to the Court.
Protective proceedings will remain a protected filing class and only attorneys of record will have access to those cases. An entry of appearance will need to be filed, and accepted by the court, in these matters to gain access.
All Public documents submitted in trust and estate cases prior to August 6, 2016, will be set to a document security type of Protected and not available for viewing unless counsel is of record in the case.
Click here to view the Probate Enhancements section of the Colorado Judicial Branch E-Filing News Newsletter, August 2016.
by Andy Lemieux, Elizabeth Meck, and Jessica Schmidt
As any practitioner who has dealt with the distribution of mineral interests from a decedent’s estate knows, dealing with these interests can be tricky and the process is not always clear. This is particularly true when old interests have not been distributed properly at the time of death. Thankfully, recent decisions in Colorado, as well as updates to certain provisions of the Colorado Probate Code, provide some clarity to this process. A recent decision in Utah also provides clarity about who is entitled to the proceeds of production from oil and gas operations when life tenants and remaindermen are involved.
Specifically, Colorado just updated its statutes governing the process for the determination of heirship, found in the Colorado Probate Code at Colo. Rev. Stat. § 15-12-1301, et. seq. A sub-committee of the Trust and Estate section of the Colorado Bar Association carefully reviewed the existing statutes, coordinated efforts with other sections of the bar, and with the approval of the Trust and Estate section, presented revisions to these statute sections as part of the omnibus bill, SB 16-133, in February 2016. The committee’s goal was to address the issues Colorado practitioners have experienced in trying to distribute these interests from dormant or previously-unopened probate estates and to make the process to distribute previously undistributed property, including mineral interests, more clear. SB 16-133 was signed by Governor Hickenlooper on May 4, 2016, thereby adopting the revisions recommended by the committee. A copy of the Bill as enacted can be found here.
by C. Jean Stewart
Twice a year probate judges from around the country gather to address current issues in probate, protective proceedings and mental health as part of the work of the National College of Probate Judges (“NCPJ”). Last week we met at the Grand Hotel Resort in Point Clear, Alabama.
Julia Meister, a prominent attorney from Cincinnati, Ohio, discussed the increasing frequency with which probate courts are handling competency disputes in the last chapter of life as opposed to traditional will contests occurring after death. She mentioned the recent, much-publicized probate court decision involving Sumner Redstone. After viewing the video-taped deposition of Mr. Redstone, the probate judge found the media mogul was sufficiently competent to identify who he wanted to be his health care provider.
by Jody H. Hall, Paralegal
The entire world entered mourning when music legend Prince died unexpectedly on April 21, 2016 at the age of 57. There is certainly no shortage of stories and speculation in the news and social media regarding the circumstances surrounding his death, and the handling of his legal, personal and business affairs.
However, as trust and estates professionals, we are drawn to the estate planning, or lack thereof, of the cultural icon. The story that will undoubtedly change and evolve as the estate is administered can be an entertaining and valuable source of lessons learned to share with clients, family members, and dare I say, ourselves.
No one has been able to find a Will. The initial reports stated that no one was able to find a will, and no one had reason to believe that a Last Will and Testament had been created. This underscores not only the importance of having a Will, but also of making sure your nominated personal representative knows where to find it. Most jurisdictions still require the original will to be lodged or filed with the Court, so your loved ones will need to be able to easily access the original signed document. Copies are generally not acceptable without additional court action. The best place to store those documents may also not be in a bank safe deposit box, unless that person has access to the box already. Otherwise, it may require Court intervention to access the box to determine if a Will is inside. Communication before your death with those that you trust to handle your affairs after your death will alleviate much stress and confusion. Read more
by Matthew Skotak
Casey Kasem (famed American Top 40 DJ), Tom Benson (owner of the NBA’s Pelicans and NFL’s Saints), and Sumner Redstone (controlling shareholder of Viacom and CBS) have much in common: wealth, prestige, and status. Though many may envy their fortune and fame, they may not envy their other common thread; competency disputes.
When Casey Kasem’s health deteriorated from Parkinson’s disease, an ugly court battle ensued between his children and his wife, which did not end until he died. A challenge to Tom Benson’s competency arose after he decided to vest controlling interest in the Saints and Pelicans with his wife, and lock-out his other heirs from those teams. Similarly, Sumner Redstone’s competency was challenged by his longtime companion, Manuela Herzer, after she was removed as his health care agent and was kicked out of his California mansion. These conflicts are public and recognizable, however, thousands of similar anonymous disputes occur every day across the country involving ordinary families.
by Carol Warnick
I recently read an article in the Utah Bar Journal1 that provides thoughtful insights into the area of trust and estate litigation in Utah based upon a recent survey to current and past Utah district court judges. As a trust and estate litigator who actively practices in Utah, Colorado, and Wyoming, I was most interested in what the district court judges had to say about the trust and estate cases they had either tried or dealt with on summary judgment motions. Some of their observations are particularly important to any lawyer practicing in this space either as an estate planner or a trust and estate litigator. Planners most certainly benefit from understanding these controversies from the judge’s perspectives, since it is the planner’s documents that will be front and center in the litigation of any contested case.
One of the most important points set forth by Mr. Adams is to remind the parties that the assets everyone is fighting about actually belong to someone else. The person who sets up the will or the trust gets to decide who gets the assets, and that decision doesn’t have to be logical or even what others might consider “fair.” It may also contravene what the decedent has previously stated orally to a family member or members. But the court is placed in the position of doing its very best to see that the decedent’s estate plan, whatever it may be, is carried out.