From the category archives:

Case Lessons

Case lessons: Using 524 to define 501B

by Boyd Johnson on August 11, 2009

From time to time, I provide a brief summary of recent, interesting Minnesota cases relevant to estate law and lessons for estate law attorneys. This post is part of the Case Lessons series.

In re The Colene P. McDonough Living Trust
MN Court of Appeals, A08-2176, unpublished
August 11, 2009

Facts

  • “McD” created a trust distributing her estate to 10 beneficiaries upon her death, including “TW”.
  • Trust provided that, “if [TW] should predecease me or die before complete distribution of the trust share, the trust share set aside for him shall terminate…”
  • McD died in 2001. Prior to the complete distribution of the trust, TW died in 2007.
  • The personal representative for TW’s estate sued for an accounting of the trust under Minn. Stat. 501B.16.

Held

  • By the terms of the trust, TW’s interest in the trust terminated.
  • Because of this, TW’s personal representative had no standing to sue for an accounting.

Lessons for Attorneys

1. The most interesting thing about this case is that the Court used defined terms under the Probate Code (Section 524) to define terms in Section 501B (trust law statutes).

The Court found that TW’s estate lacked standing to sue for an accounting because it wasn’t an “interested person” under 501B.16. The Court noted that “interested person” isn’t defined in 501B and therefore used the definition under 524.1-201.

I have no doubt the Court reached the correct result. However, it is not readily apparent from the statutes that 524 terms can be used to define undefined 501B terms. The Court justifies this usage only by calling the Probate Code “related” to 501B.

Though this is an unpublished opinion, remember this case the next time you run into 501B issues. Since 501B is a skeleton statute compared to the full-bodied Probate Code, grey areas in trust law are frequent. You may be able to look to the Probate Code to argue for similar treatment in trust law grey areas.

2. TW’s estate was effectively disinherited because it took over 5-1/2 years to distribute the trust. I wonder if that is what McD really wanted? The opinion offers no clues.

Again, the Court correctly interpreted the terms of the trust, which wasn’t an issue in the appeal. Because it wasn’t an issue in this appeal, perhaps there was a good reason for including the above language. But what if it was a drafting mistake?

Be careful in drafting your distribution provisions in your wills and trusts. Think through all the possibilities and run your proposed language by a colleague. Perhaps the attorney for McD drafted the language thinking it would clean up and speed up the administration of the trust if someone died in the middle of it. But if it wasn’t contemplated that the administration could go on for years, then McD’s intentions may not have been honored.

Rule of thumb: whenever you draft language terminating someone’s interest in a trust or will, make sure you’ve covered all the contingencies.

Categorized in Case Lessons

{ 0 comments }

Case lessons: Objectors entitled to discovery

by Boyd Johnson on June 17, 2009

I’m launching a new feature on the blog with this post. From time to time, I’ll provide a brief summary of recent, interesting Minnesota cases relevant to estate law and lessons for estate law attorneys. If you just want the lessons without the case summary, jump down to the bottom.

In re the Estate of Erna M. Wingren
MN Court of Appeals, A08-0944, unpublished
June 9, 2009

Facts of the Case

  • Mom died testate, leaving 4 adult children.
  • Two children were expressly disinherited and the other two were left most of the estate, one of whom was nominated as the personal representative under the Will.
  • A formal probate hearing was scheduled to probate the Will and appoint the personal representative.
  • The two disinherited children (the “Objectors”) filed an objection to the Will alleging it was executed because of undue influence.
  • The Objectors also brought a motion for an order permitting subpoenas to be served on third parties in order to obtain medical and financial records of the decedent.
  • At the hearing, the judge denied the motion and ruled that, since there were no formal pleadings presenting the objections in detail, granting the discovery request would be something like a fishing expedition.
  • The judge also said that the Objectors would need to file a separate action in district court (not within the probate case), if they wanted to proceed with discovery.
  • The Objectors appealed.

The Court of Appeals Decision

  • The Objectors are entitled to discovery and don’t need to commence a separate action.
  • Probate cases are governed by the Rules of Civil Procedure, unless there in inconsistency. The Rules permit parties to obtain discovery “as long as the information sought appears reasonably calculated to lead to the discovery of admissible evidence.” Rule 26.02(a).
  • Previous decisions of the Court have ruled that “a party objection to the probate of a Will may conduct discovery within a probate proceeding.”
  • Though some district courts in Minnesota, as a matter of practice, have required that litigants determine the outcome of a Will contest in a separate action, there is no basis for that in the probate code or case law.
  • Reversed and remanded.

Lessons for Attorneys

  • Objectors of a Will are entitled to discovery and need not commence a separate action in order to litigate the matter.
  • Unless there is an inconsistency, the Rules of Civil Procedure apply to probate cases.
  • Certain district court judges may need to be “educated” about the rights of objectors by the attorney for the objectors.

Categorized in Case Lessons and tagged as , , , ,

{ 0 comments }