Archive for category: Will & Trust Construction

Pitfalls of Naming Minors as Beneficiaries

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by Jody H. Hall

It is natural for clients to want to name their children or grandchildren to receive their assets after their death  However, the naming of a beneficiary directly on an account, especially if they are a minor, can derail an otherwise well-thought out estate plan.

Often clients assume that their estate planning is complete once they have signed their Will and Trust.  Then either immediately or through various changes in their assets, they name the same persons listed in their estate planning documents as the direct beneficiaries on their accounts.  If the designated beneficiary is a minor at the time of the account owner’s death, significant and unintended consequences can, and often do, occur. Read more

Utah Uniform Electronic Wills Act Set for Approval

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by Peter K. Smyth

Although the COVID-19 pandemic has changed many aspects of our lives, one thing that has not changed is the importance of estate planning. Creative, in-person signing ceremonies have emerged to ensure that plans are validly executed, including witnessing from opposite ends of a large conference table, witnessing signings through windows, and signing from six feet away, stepping back six feet while witnesses sign with their own pens, and retrieving documents only after witnesses have, in turn, stepped back six feet.

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Best Practice Tip: TPP Memos

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by Brooke Simons

When viewing an estate as a whole, Tangible Personal Property (“TPP”) is not usually the most financially significant component.  However, it is often the single most bitterly disputed area in an estate. 

Often times, when TPP is being administered under an estate, there are specific provisions in the will as to how the estate should be distributed, but nothing directly addressing specific items of TPP, such as the china collection or Mom’s recipe box.  If one spouse dies first, then under C.R.S. § 15-11-805, there is a general presumption that all TPP in the joint possession or control of spouses is held in a joint tenancy with right of survivorship.  (“[T]angible personal property in the joint possession or control of the decedent and his or her surviving spouse at the time of the decedent’s death is presumed to be owned by the decedent and the decedent’s spouse in joint tenancy with right of survivorship if ownership is not otherwise evidenced by a certificate of title, bill of sale, or other writing.”).  This means that if you are married when you die, then your TPP will go to your spouse, who will then own the TPP outright and be able to dispose of it as they see fit.

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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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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

No Contest Clauses – Not Just for Wills

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by Matthew Skotak

Fiduciary litigation continues to grow and often times outpaces the development of case law regarding the myriad of issues that arise in estate and trust disputes.  Historically fiduciary litigation involved disputing family members or changes in family circumstances.  However, another frequent source of litigation is the estate planning documents themselves.  For this reason, estate planners often include a no contest clause, or in terrorem clause, in a will or trust as a means of deterring feuding beneficiaries from challenging the validity of the instrument; yet, enforcement of these no contest clauses carries its own burden.

A no contest clause is more frequently contained in a will, although it can also be prudent to include these provisions in trusts – especially when the underlying concern is to discourage litigation over the decedent’s estate plan by disinheriting a person who unsuccessfully contests the will and/or trust.  The enforceability of these provisions varies from state to state; however, Colorado has determined that a no contest clause is valid when the contesting party lacks probable cause to bring their challenge.  See Colo. Rev. Stat. §§ 15-11-517, 15-12-905.  Read more

When Beneficiaries are Not Heirs

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by Jody H. Hall, Paralegal

The terms Beneficiary and Heir both refer to someone who receives an inheritance after someone passes away.  However, while the terms are often used interchangeably, they do not always refer to the same individual or set of individuals.  Heirs can be beneficiaries but beneficiaries are not always heirs.

In our practice, we often see issues arising when these 2 sets are not identical or are different than the expectations of the parties. Read more