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Trusts & Estates Opinions | Kearney v. Unsecured Creditors Committee | Court: US Court of Appeals for the Tenth Circuit Docket: 19-2209 Opinion Date: February 24, 2021 Judge: Stephanie Kulp Seymour Areas of Law: Bankruptcy, Constitutional Law, Trusts & Estates | Appellant Victor Kearney was the lifetime income beneficiary of two spendthrift trusts when he filed for bankruptcy in 2017. The United States Trustee’s office appointed an unsecured creditors committee (“UCC”) which proposed a reorganization plan contemplating a one-time trust distribution to pay off appellant's debts. After a New Mexico state court modified the trusts to authorize the distribution, the bankruptcy court approved the plan. Appellant appealed. The Bankruptcy Appellate Panel (“BAP”) of the Tenth Circuit concluded that the bankruptcy court did not deny appellant due process, made no errors in its findings of fact, and did not abuse its discretion in settling appellant's claims. On appeal of that decision, appellant argued that using spendthrift trust assets to fund the reorganization plan violated the trusts’ spendthrift provision and the law, and that approving the settlement of his claims amounted to an abuse of the bankruptcy court’s discretion. Finding no reversible error, the Tenth Circuit affirmed the BAP. | | In re Guardianship & Conservatorship of Radda | Court: Iowa Supreme Court Docket: 19-2088 Opinion Date: February 19, 2021 Judge: Thomas D. Waterman Areas of Law: Trusts & Estates | The Supreme Court affirmed the ruling of the district court on declaratory judgment declining to adjudicate the validity of two wills the ward, who was still alive, executed while he was in a voluntary conservatorship, holding that neither Iowa Code 633.637 nor other provisions of the Probate Code permit a challenge to the validity of a will executed by a testator who is still living. The ward's sister and her husband (together, Petitioners) brought this action to determine the validity of the ward's two wills. The conservator bank moved to dismiss the action, arguing that Petitioners lacked standing to challenge the wills while the testator was still alive. The district court denied the motion to dismiss but limited the scope of the action to a determination of the ward's present testamentary capacity. The Supreme Court affirmed, holding (1) will contests must await the testator's death, and the Probate Code does not allow this declaratory judgment action to proceed; and (2) the district court erred by ordering Petitioners to pay the conservator's attorney fees without an applicable fee-shifting statute. | | St. John v. Thompson | Court: Supreme Court of Virginia Docket: 200068 Opinion Date: February 25, 2021 Judge: McCullough Areas of Law: Personal Injury, Trusts & Estates | The Supreme Court affirmed the determination of the trial court that James Charles St. John must pay attorney fees to the person he defrauded, holding that the circuit court did not err. St. John befriended his neighbor, Ernest Stuart Elsea, II. St. John subsequently persuaded Elsea to transfer his extensive firearm collection to a firearm trust that St. John established and controlled and had Elsea sign a durable power of attorney. St. John then induced Elsea to sign a codicil to his will naming St. John and St. John's partner as beneficiaries. Elsea filed a complaint seeking an accounting and a recovery of the firearms, alleging breach of fiduciary duty, and alleging fraud an undue influence. The circuit court rejected counts one and two but ordered St. John to either return the firearms to Elsea or pay Elsea the value of the firearms. The circuit court then ordered St. John to pay attorney's fees. The Supreme Court affirmed, holding that the circuit court properly awarded fees under Prospect Development Co. v. Bershader, 258 Va. 75 (1999). | |
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