Posts tagged with "Estate"

Connecticut Appellate Court finds that Fiduciary should not have been removed as Executrix for Estate

Saccu’s Appeal from Probate, 97 Conn. App. 710, 905 A.2d 1285 (2006)  

The plaintiff and executrix, Jane Saccu, originally filed accountings with the Probate Court confirming that she utilized estate funds to make repairs to and pay property taxes for real property left to her by the decedent, her father, as a life estate.  The defendant and decedent’s son, Richard Barreta, objected to the accountings and sought to remove the executrix as a fiduciary for the Estate of Gicomo Barretta (the “Estate”).

The plaintiff was removed from her duties as executrix and compelled to reimburse the Estate pursuant to a Probate Court order.  The Probate Court found that the plaintiff had breached her fiduciary obligation when she utilized the estate funds for repairs and taxes. The plaintiff appealed the Probate Court order but the Superior Court entered judgment in favor of the defendant and dismissed the appeal.

On appeal to the Appellate Court, the plaintiff claimed that her removal as executrix was an abuse of discretion because there was no finding that she posed a continuing risk to the Estate if she continued in her duties as fiduciary.  The Appellate Court agreed and found, pursuant to Conn. Gen. Stat. § 45a-242, that the Plaintiff should not have been removed as the executrix because the specific finding had not been made.  The case was remanded with instructions to have the executrix reinstated and the judgment was reversed in part.

Accepting Funds from a Charitable Trust may Create a Contract that Cannot be Unilaterally Modified

Blumenthal v. Getraer, CV106007120S, 2011 WL 4953727 (Conn. Super. Ct. Oct. 4, 2011)

In a case before the Superior Court of Connecticut which found that a contract cannot be unilaterally modified, the Attorney General of the State of Connecticut brought a declaratory judgment action to represent the public interest in protecting gifts intended for charitable purposes, pursuant to Connecticut General Statute § 3-125.   The action posed four specific questions to the court regarding a charitable trust that was intended to honor a respected synagogue member and provide funds for capital improvements to the synagogue to which he belonged.

Case Background

In 2002, a respected member of the synagogue passed away, and was survived by his wife and son.  The following year, a charitable foundation in New York City gave the synagogue he attended a gift of $40,000, which was contingent upon the synagogue’s agreement to name its sanctuary after the deceased.  The gift and additional donations of over $100,000 were placed in a memorial fund, which was controlled by the widow and her son.

After receiving the gift, the synagogue erected a plaque over the entrance to the sanctuary declaring that it was named in honor of the deceased.  At the synagogue’s next board of directors meeting, the widow offered, on behalf of the memorial fund, to give the money in the fund to the synagogue with the restriction that it be used only for capital improvements and not ordinary expenses.  The widow and the son would act as the trustees of the fund and disburse monies for capital improvements at their absolute discretion.  The board of directors approved the arrangement.

The Dispute

A dispute later arose between the widow and her son, and the board of directors.  The widow and her son were dissatisfied because the memorial plaque was covered on several occasions so that it was not visible to people in the synagogue.  For example, during the 110th anniversary celebration of the synagogue, a sign announcing the name of the synagogue was placed over the memorial plaque.  During one Chanukah celebration, decorations were placed over the plaque and left there until July of the following year.

The board of directors was dissatisfied because the widow and her son stopped paying for capital improvements.  The board of directors that approved the arrangement with the widow and her son was dismissed and replaced with a new board.  This new board of directors voted to request the widow and her son to turn control of the fund over to the synagogue.

Court Finds Existence of a Contract

In an action seeking declaratory judgment, the sole function of the trial court is to ascertain the rights of the parties under existing law.  Ginsberg v. Post, 177 Conn. 610, 616 (1979).  Four specific questions were posed to the court to determine the rights of the trustees and the rights of the synagogue.

Prior to addressing these questions, the court found that a contract had been formed between the fund and the synagogue based on the synagogue’s acceptance of monies from the fund and other actions taken by the synagogue board of directors.  Therefore, the court found that the vote by the new board of directors had no legal significance because they could not unilaterally change the terms of the previous contract with the widow and her son.

Trial Outcome

Based on finding the existence of a contract, the court determined that the widow and her son were entitled to continue to control the fund and act as its trustees.  However, the court also found that equity required them, in their capacity as trustees, to reimburse the synagogue for the capital expenditures made in reasonable reliance on the agreement that the fund would pay for capital improvements.  The trustees had discretion to determine what constituted a capital improvement.

The fund was also required to continue to pay for capital improvements, on the condition that the memorial plaque was visible to all who would be able to see it.  The court ordered that the memorial plaque not be covered and, if it was, that would constitute a breach of contract on the part of the synagogue.  In that event, the widow and son would be free to terminate the trust and the fund, and either return the money to the donors or use it for other charitable purposes at their discretion.

Finally, the court suggested that the fund cease soliciting further donations and allow the remaining monies to be depleted to that the relationship between the parties could be terminated.

Should you have any questions relating to charitable trusts or other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Connecticut Superior Court denies Prejudgment Remedy and declines to impose a Constructive Trust

Connecticut Superior Court denies Prejudgment Remedy and declines to impose a Constructive Trust
Marinelli v. Estate of Marinelli, 2011 Conn. Super. LEXIS 1857 (2011)

The plaintiff, Michael Marinelli, brought an action against Joanne Marinelli, the executrix of the Estate of Anthony V. Marinelli, Jr. (the “Estate”) and the trustee of the Anthony V. Marinelli, Jr. Revocable Trust (the “Trust”).  The decedent, Anthony V. Marineeli, Jr., fraudulently induced the plaintiff, his brother, to believe that he would receive a 50% ownership interest in real property according to the plaintiff.  A family car repair business was operated on the real property in question and the plaintiff sought to impose a constructive trust.  The plaintiff filed an application for a prejudgment remedy against the Estate and the Trust pursuant to Conn. Gen. Stat. § 52-278d.

The Court held a hearing on the application and found there was an absence of probable cause to believe the plaintiff would prevail.   The plaintiff’s father clearly transferred title of the real property to the decedent who maintained the car repair business and assumed liability for all of its debts.  The evidence presented indicated that the plaintiff voluntarily relinquished his interest in the car repair business.  The apparent representations by his father and brother indicating that the plaintiff would be “taken care of” were imprecise assurances that did not persuade the Court.   There was no evidence of wrongdoing engaged in by the decedent. As a result, the plaintiff’s application for a prejudgment remedy was denied.

Should you have any questions relating to wills, trusts, estates or probate issues generally, please feel free to contact Joseph C. Maya, a lawyer in the firm’s Westport, Connecticut office in Fairfield County by telephone at (203) 221-3100 or by e-mail at jmaya@mayalaw.com.

Accepting Funds from a Charitable Trust may Create a Contract that Cannot be Unilaterally Modified

In a case before the Superior Court of Connecticut, the Attorney General of the State of Connecticut brought a declaratory judgment action to represent the public interest in protecting gifts intended for charitable purposes, pursuant to Connecticut General Statute § 3-125.   The action posed four specific questions to the court regarding a charitable trust that was intended to honor a respected synagogue member and provide funds for capital improvements to the synagogue to which he belonged.

In 2002, a respected member of the synagogue passed away, and was survived by his wife and son.  The following year, a charitable foundation in New York City gave the synagogue he attended a gift of $40,000 which was contingent upon the synagogue’s agreement to name its sanctuary after the deceased.  The gift and additional donations of over $100,000 were placed in a memorial fund, which was controlled by the widow and her son.  After receiving the gift, the synagogue erected a plaque over the entrance to the sanctuary declaring that it was named in honor of the deceased.  At the synagogue’s next board of directors meeting, the widow offered, on behalf of the memorial fund, to give the money in the fund to the synagogue with the restriction that it be used only for capital improvements and not ordinary expenses.  The widow and the son would act as the trustees of the fund and disburse monies for capital improvements at their absolute discretion.  The board of directors approved the arrangement.

A dispute later arose between the widow and her son, and the board of directors.  The widow and her son were dissatisfied because the memorial plaque was covered on several occasions so that it was not visible to people in the synagogue.  For example, during the 110th anniversary celebration of the synagogue, a sign announcing the name of the synagogue was placed over the memorial plaque.  During one Chanukah celebration, decorations were placed over the plaque and left there until July of the following year. The board of directors was dissatisfied because the widow and her son stopped paying for capital improvements.  The board of directors that approved the arrangement with the widow and her son was dismissed and replaced with a new board.  This new board of directors voted to request the widow and her son to turn control of the fund over to the synagogue.

In an action seeking declaratory judgment, the sole function of the trial court is to ascertain the rights of the parties under existing law.  Ginsberg v. Post, 177 Conn. 610, 616 (1979).  Four specific questions were posed to the court to determine the rights of the trustees and the rights of the synagogue.  Prior to addressing these questions, the court found that a contract had been formed between the fund and the synagogue based on the synagogue’s acceptance of monies from the fund and other actions taken by the synagogue board of directors.  Therefore, the court found that the vote by the new board of directors had no legal significance because they could not unilaterally change the terms of the previous contract with the widow and her son.

Based on finding the existence of a contract, the court determined that the widow and her son were entitled to continue to control the fund and act as its trustees.  However, the court also found that equity required them, in their capacity as trustees, to reimburse the synagogue for the capital expenditures made in reasonable reliance on the agreement that the fund would pay for capital improvements.  The trustees had discretion to determine what constituted a capital improvement.  The fund was also required to continue to pay for capital improvements, on the condition that the memorial plaque was visible to all who would be able to see it.  The court ordered that the memorial plaque not be covered and, if it was, that would constitute a breach of contract on the part of the synagogue.  In that event, the widow and son would be free to terminate the trust and the fund, and either return the money to the donors or use it for other charitable purposes at their discretion.  Finally, the court suggested that the fund cease soliciting further donations and allow the remaining monies to be depleted to that the relationship between the parties could be terminated.

Should you have any questions relating to charitable trusts or other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Blumenthal v. Getraer, CV106007120S, 2011 WL 4953727 (Conn. Super. Ct. Oct. 4, 2011)

Trustee Interpretation of Ambiguous Trust Provisions will not be Changed by a Court Without Evidence of a Clear Abuse of Trustee Discretion

In a recent case before the Superior Court, four trust beneficiaries filed a three-part complaint against the trustees of a trust created by their mother.  The complaint alleged breach of fiduciary duty, unjust enrichment, and other charges. The trial court ruled that the trustees had properly distributed the trust interests and entered judgment in their favor.

In 1953, a trust indenture known as the Hembdt Trust was drafted with assets consisting of royalty interests in oil, gas and mineral rights.  During her lifetime, the settlor and beneficiary of this trust (“the decedent”) married and had ten children.  Upon her death, the terms of the trust provided that the royalty interests would pass to “his or her legal representatives, heirs at law or next of kin in accordance with the provisions of law applicable to the domicile of the deceased beneficiary.”  In 1967, the decedent died. Pursuant to her will, several testamentary trusts were created, including a testamentary trust for the benefit of her husband (“marital trust”) and a trust for her children (“children’s trust”).  The trustees and executors of the decedent’s will determined that the provision in the Hembdt Trust required the trust’s royalty interests to pass into her estate which, in accordance with her will, resulted in these interests being distributed in a 54/46 ratio between the marital trust and the children’s trust.

The beneficiaries of the children’s trust argued that the entirety of the royalty interest should have been distributed to them as the decedent’s heirs at law because the term “legal representatives” in the Hembdt Trust provision, used under the circumstances provided, could only be interpreted to mean the children of the decedent.  The decedent’s husband, in his capacity as a fiduciary of the trusts, argued that the beneficiaries’ interpretation was inconsistent with the language of the trust instrument and the law.  He argued that the term “legal representatives” was used in conjunction with “heirs at law” and “next of kin;” therefore, the clear intent of the Hembdt Trust provision was that upon the death of the individual beneficiary, his or her interest would pass to: (1) the beneficiary’s legal representatives, which would be the beneficiary’s executors, if the person died testate, to be administered according to the beneficiary’s will, or the beneficiary’s administrators, if the person died intestate and a probate estate was opened; (2) the beneficiary’ heirs at law if the person died intestate and no probate estate was opened; and (3) the beneficiary’s next of kin if there were no heirs at law. The decedent’s husband further argued that if all three conditions existed, then the distributions would have to be in accordance with Connecticut law, which requires that, when a decedent leaves both a spouse and children, they both inherit.  Finally, the decedent’s husband argued that Connecticut law requires that if a decedent leaves a will, a distribution is made according to the will.   Conn. Gen. Stat. § 45a-431.  The remaining trustees adopted the arguments of the decedent’s husband.

According to Connecticut case law, a court’s role in the construction of a trust instrument is to determine the meaning of what the grantor stated in the trust instrument and not to speculate upon what the grantor intended to state in the instrument. Connecticut Bank & Trust Co. v. Lyman, 148 Conn. 273, 278-79, 170 A.2d 130 (1961).  Language in the trust instrument is to be accorded its common, natural and ordinary meaning and usage.  WE 470 Murdock, LLC v. Cosmos Real Estate, LLC, 109 Conn.App. 605, 609, 952 A.2d 106, cert. denied, 289 Conn. 938, 958 A.2d 1248 (2008) (internal quotation marks omitted). Furthermore, no language will be construed as to remove a trustee from equitable control; courts may intervene only to protect and preserve the trust in circumstances where the trustees have abused their discretion.  Gimbel v. Bernard F. & Alva B. Gimbel Foundation, Inc., 166 Conn. 21, 34, 347 A.2d 81 (1974)

Connecticut case law has established that the phrase “legal representatives” in a testamentary instrument is an ambiguous or equivocal term. Smith v. Groton, 147 Conn. 272, 274–75, 160 A.2d 262 (1960).   In interpreting the trust provisions, the court determined that the language did not permit the decedent’s beneficial interest to pass to each of the three categories (“legal representatives, heirs at law and next of kin”) or to pass to different recipients depending on an exercise of discretion (“legal representatives, or heirs at law, or next of kin”).  For that reason, the court found that the terms “legal representatives,” “heirs at law,” and “next of kin” did not conflict and that the provision required that the decedent’s beneficial interest pass to the recipients in the order clearly listed the trust instrument.  Therefore, the trustees did not abuse their discretion in determining that the royalty interests passed to the executors, as the decedent’s legal representatives, to be distributed to the marital trust and children’s trust in accordance with the decedent’s will.

Because the trial court did not find that the trustees of the decedent’s trusts abused their discretion, the court refused to upset their determination of how the decedent’s interests should be distributed.

Should you have any questions relating to wills, trusts, estates and other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Heath v. Heath, CV094044709S, 2012 WL 2477953 (Conn. Super. Ct. June 5, 2012)

Assets Protected From Creditors in Connecticut

In today’s economy more and more people find themselves having a hard time paying the bills and avoiding late payments.  Still others have a problem with creditors chasing them for unpaid debts.  Now more than ever it is important for you to know what assets are protected from creditors and what are not.

Connecticut law provides some protection from creditors in a situation where your income or assets are subject to a court judgment or lien.  You can protect yourself in a variety of ways by planning ahead and consulting with a professional financial planner and an attorney.   Taking out liability insurance or setting up a corporate entity or trust for your property are examples of how you can shield your assets from future creditors.  However, there are some individual assets that are automatically protected from creditors.  Here is brief summary of the law in Connecticut:

A.            Wages

Once a creditor obtains a judgment against you, it can apply for an execution against your wages.  See Connecticut General Statutes, Section 52-361a.  Connecticut law does provide for some protection in this situation.   No more than twenty-five percent of an individual’s weekly disposable earnings may be subject to a wage execution.  The portion of disposable earnings subject to the wage execution is withheld and applied to the amount of the judgment.    In some cases, the maximum amount that can be withheld may be less depending upon the ratio between the individual’s disposable earnings and the hourly minimum wage in effect at the time of the execution.

B.             Retirement Plans

Generally, retirement plans are exempt from claims by creditors.  Both IRAs and 401ks are protected assets pursuant to Connecticut General Statues, Section 52-321a.

C.             Personal Property

Connecticut law provides a list of exempt personal property that creditors cannot claim an interest in pursuant to Connecticut General Statutes, Section 52-352b.  The list of property includes basics necessities such as apparel, bedding, foodstuffs, household furniture and appliances.  Items necessary for a person’s occupation or profession such as tools, books, instruments, farm animals and livestock feed are also considered exempt property.  Wedding and engagement rings are not subject to creditor claims as well.

D.             Insurance and Government Assistance Payments

Some insurance and government assistance payments are exempt from creditors under Connecticut General Statutes, Section 52-352b.   Health and disability insurance payments are exempt as are Workers’ compensation, Social Security, veterans and unemployment benefits.  In addition, under Connecticut General Statutes, Section 38a-453, creditors of an insured cannot seek payment from a life insurance policy beneficiary under most circumstances.

E.             Child Support and Alimony Payments

Any court approved child support payments received by a debtor are exempt and protected from creditors.  Alimony payments, to the extent that wages are exempt from creditor claims, are also protected.  See Connecticut General Statutes, Sections 52-352b & 52-361a.

F.             Real Estate

Your homestead or personal residence is exempt from creditor claims up to the value of seventy-five thousand dollars.  If a creditor has a money judgment arising out of hospital services, then the value of the exemption increases to one hundred twenty-five thousand dollars.  The exemption is calculated based upon the fair market value of the equity in the property taking into account any statutory or consensual liens on the property.  See Connecticut General Statutes, Section 52-352b.

There is no such exemption in place for commercial real estate or rental properties.

G.             Motor Vehicles

Only one motor vehicle is exempt from creditor claims up to the value of one thousand five hundred dollars.  The exemption is calculated by estimating the fair market value of the motor vehicle and taking into account any relevant liens or security interests.  See Connecticut General Statutes, Section 52-352b.

H.              Bank Accounts

         A creditor can enforce a judgment by way of a bank execution.  However, the same exemptions apply to bank accounts as they do to government assistance, insurance, alimony and child support payments as outlined above.  Therefore, you have the opportunity to challenge a bank execution based on these exemptions and prevent a creditor from taking money out of your account.   In addition, you can claim a general exemption not to exceed one thousand dollars.

In conclusion, Connecticut law prevents creditors from seizing all of your income, property, possessions and savings pursuant to a judgment or lien.  However, the law does not prevent a debt collector from jeopardizing your livelihood and financial wellbeing.  You best bet is to limit individual liability and plan ahead to avoid a creditor claim in the first place.  Consulting with a professional financial planner and an attorney is recommended.

What is a Pre-Need Funeral Services Contract?

A pre-need funeral services contract allows an individual to set aside funds, before his or her death, to be used specifically to pay for funeral expenses. Under the terms of such a contract, a “purchaser” signs the contract and advances funds, which are held in an escrow account for the purpose of paying for future funeral services for the “beneficiary” upon his or her demise. See C.G.S. §42-202. A pre-need funeral services contract may only be sold by a funeral director licensed by the public health commissioner. See C.G.S. §42-201.

There are strict requirements for such contracts under Connecticut law. For example, funeral services contracts must be in writing, and must contain the following:

(1) The name, address, telephone number and Social Security number of the beneficiary and the purchaser;

(2) The name, address, telephone number and license number of the funeral director for the funeral service establishment providing the goods or services;

(3) A list of the selected goods or services, if any;

(4) The amount of funds paid or to be paid by the purchaser for such contract, the method of payment and a description of how such funds will be invested and how such investments are limited to those authorized pursuant to subsection (c) of section 42-202;

(5) A description of any price guarantees by the funeral service establishment or, if there are no such guarantees, a specific statement that the contract contains no guarantees on the price of the goods or services contained in the contract;

(6) The name and address of the escrow agent designated to hold the prepaid funeral services funds;

(7) A written representation, in clear and conspicuous type, that the purchaser should receive a notice from the escrow agent acknowledging receipt of the initial deposit not later than twenty-five days after receipt of such deposit by a licensed funeral director;

(8) A description of any fees to be paid from the escrow account to the escrow agent or any third party provider;

(9) A description of the ability of the purchaser or the beneficiary to cancel a revocable funeral service contract and the effect of cancelling such contract;

(10) For irrevocable contracts, a description of the ability of the beneficiary to transfer such contract to another funeral home; and

(11) The signature of the purchaser or authorized representative and the licensed funeral director of the funeral service establishment.

See C.G.S. §42-200(b). A funeral services contract must also contain a statement that if the particular merchandise provided for in the contract is not available at the time of death, the funeral service establishment will furnish merchandise similar in style and at least equal in quality of material and workmanship to the merchandise provided for in the contract.  See C.G.S. §42-202(g). Funeral services contracts should not be confused with burial insurance policies, which are separately codified in the Connecticut General Statutes, under Section 38a-464.

For further information on pre-need funeral services contracts in Connecticut, see Chapter 743C of the Connecticut General Statutes. The General Statutes can be found online at: http://www.cga.ct.gov/. Additional information is available in the State of Connecticut’s Office of Legal Research Report on pre-need funeral services contracts online at: http://www.cga.ct.gov/2007/rpt/2007-R-0578.htm.

Probate Courts Hearing a Conservator’s Application to Transfer Income from a Conserved Person’s Estate Must Provide Notice to All Parties Who May Have an Interest in the Estate

In a recent case before the Superior Court of Connecticut, a named beneficiary of a will filed an appeal to reverse a probate court order that authorized the conservator of his benefactor to transfer all her assets into trusts.  The conservator brought a motion to dismiss the appeal based on  lack of standing.  The court held that the named beneficiary had standing to file his appeal and denied the motion to dismiss.

In January 2008, the probate court appointed John Nugent (“Nugent”) as the conservator of the person and the estate of Josephine Smoron.  In April 2009, the Nugent applied to the probate court to approve the creation and funding of a revocable trust and an irrevocable trust for Ms. Smoron.  At the time of the May 2009 probate court hearing, Samuel Manzo (“Manzo”) was a named beneficiary under Ms. Smoron’s will. The probate court approved Nugent’s application and authorized the creation and funding of the two trusts; however, the hearing was held without providing notice to Manzo or other named beneficiaries of Ms. Smoron’s will.  Nugent, in his capacity as conservator, established and funded the trusts by quitclaiming real property owned by Ms. Smoron to the irrevocable trust and by depositing over $218,000 of her assets to the revocable trust.  Pursuant to the terms of the trusts, upon Ms. Smoron’s death, the proceeds were to be distributed to three churches, with no provisions for the beneficiaries named under will.  In June 2009, Ms. Smoron died.

Nugent argued that Manzo’s appeal of the probate orders authorizing the creation and funding of Ms. Smoron’s trusts must be dismissed because Manzo was a “mere prospective heir” under Ms. Smoron’s will and, therefore, lacked a sufficient legal interest to challenge the rulings of the probate court.  However, in the instant case, the Superior Court found it to be a provable fact that Manzo was a beneficiary of Ms. Smoron’s will rather than a prospective heir.

Connecticut law specifically requires the probate court to hold a hearing and provide notice to “all parties who may have an interest” in the estate before authorizing a conservator to transfer his conserved person’s property.  Conn. Gen. Stat. § 45a-655(e).  The same law further provides that the probate court should also consider the provisions of an existing estate plan before authorizing the conservator to make transfers of income or principal from the estate of the conserved person.  The Superior Court found that, as a named beneficiary under Ms. Smoron’s will at the time of the May 2009 order, Manzo had both an interest in the estate and an interest in ensuring that the probate court considered Ms. Smoron’s will as part of the existing estate plan.  Therefore, Manzo should have received notice of the probate court hearing.

Therefore, the Superior Court held that, as a named beneficiary under the will, Manzo was aggrieved by the May 2009 probate court order, should it be permitted to stand. Pursuant to that order, Nugent not only placed Ms. Smoron’s assets in the trusts, but he also designated three churches as beneficiaries of the trusts upon Ms. Smoron’s death. The court characterized these actions as effectively disinheriting Manzo and nullifying any provisions that had been made for him under Ms. Smoron’s will.  Based these facts, the trial court determined that Manzo was a proper party to invoke the jurisdiction of the court.

The Superior Court denied Nugent’s motion to dismiss and permitted Manzo to go forward in the Superior Court of Connecticut with his appeal of the probate court orders authorizing the creation and funding of trusts for Ms. Smoron’s estate.

Should you have any questions relating to wills, trusts, estate planning or other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Manzo v. Nugent, X04HHDCV105035142S, 2012 WL 1959076 (Conn. Super. Ct. May 8, 2012)

Beneficial Interest in a Trust Does Not Equate to Beneficial Ownership of Real Property Held in Trust

In a case before the Superior Court of Connecticut, a beneficiary of a revocable family trust filed a motion to dismiss the summary process action brought by the trustee to regain possession of premises held in trust and occupied by the beneficiary.  The trial court denied the motion to dismiss.

In 2003, the trustee and her husband created a revocable family trust, consisting of three sub-trusts.  The trust named six beneficiaries, including the current trustee. The contested premises were allocated to “Sub Trust A” and occupied by one of the beneficiaries. The current trustee became the sole trustee upon her husband’s death in 2004.  In June 2009, the trustee served notice to the beneficiary to quit the contested premises within three weeks, citing nonpayment of rent, lapse of time, and that the beneficiary never had a right or privilege to occupy the premises.  The beneficiary moved to dismiss the summary process action.

According to Connecticut law, a summary process action requires the individual bringing the action to be the owner of the property. Conn. Gen. Stat. § 47a-23(a)(3).  In a trust, the trustee holds legal title to the assets of the trust. See B.A. Ballou & Co. v. Citytrust, 218 Conn. 749, 753, 591 A.2d 126 n .2, 218 Conn. 749, 591 A.2d 126 (1991). A trust beneficiary has no legal title or ownership interest in the individual assets of the trust.  The Connecticut Supreme Court has held that a beneficiary of a revocable trust does not have a vested property interest, but only an expectancy until the death of the settlor renders the trust irrevocable. See Bartlett v. Bartlett, 220 Conn. 372, 376–77, 599 A.2d 14 (1991).

Although the beneficiary did not dispute that the trustee held legal title to the contested premises, he argued that the trustee could not bring a summary process action against him because he was a co-owner of the contested premises.  He contended that he was entitled to beneficial ownership of the premises and, therefore, fell within the definition of “owner” provided by Connecticut law, Conn. Gen. Stat. § 47a-1(e).

Connecticut law defines property ownership in terms of both legal title and beneficial ownership.  Conn. Gen. Stat. § 47a-1(e).  An “owner” includes one in whom is “vested…all or part of the beneficial ownership and a right to present use and enjoyment of the premises.” Conn. Gen. Stat. § 47a-1(e)(2).  Beneficial ownership is the right to enjoy the premises where legal title is in one person, the right to beneficial use or interest is in another person, and the courts recognize and can enforce the right to beneficial use or interest. Bender v. Nuzzo, Superior Court, Judicial District of New Haven, Housing Session, Docket No. SPNH 9607 47892 (July 10, 1997, Levin, J.).  Beneficial use is distinguished from the right of occupancy or possession because the right to beneficial use encompasses the right to use and enjoy property to one’s liking.

In hearing the motion to dismiss, the court refused to determine whether the beneficiary had a vested or contingent beneficial interest in the family trust, which would not become irrevocable until the trustee’s death.  However, the court found that the beneficiary only demonstrated that he occupied the premises.  He did not show that he had any right to the present use and enjoyment of the premises, under the terms of the trust or otherwise, as required to establish beneficial ownership.  Absent legal title to the premises or vested beneficial ownership, the court found that beneficiary was not an owner of the property and that the trustee had proper standing to bring the summary process action against him.

Therefore, the court denied the beneficiary’s motion to dismiss the trustee’s summary process action to evict him from the contested premises.

Should you have any questions relating to real estate, trust or personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Connecticut Appellate Court finds that a Creditor is allowed to conduct Discovery pursuant to a Probate Court Order

The executors of the Estate of F. Francis D’Addario (the “Estate”) filed an interim accounting with the Probate Court for the District of Trumbull.  The Probate Court then allowed the Cadle Company (“Cadle”), an unsecured creditor of the Estate, to conduct discovery in reference to the management of the Estate’s assets and the concerns it had regarding the accuracy of the accounting.  Both the executors and Cadle appealed the discovery order and the Superior Court affirmed the order permitting discovery but remanding to the Probate Court.  The Superior Court found that the scope of discover ordered by the Probate Court was beyond its jurisdiction.  Cadle appealed the Superior Court ruling.

On appeal, the Appellate Court decided the issue of whether the Probate Court had jurisdiction to allow a creditor to conduct discovery into the business judgment and operations engaged in by executors in managing estate assets.   The Appellate Court found that the Probate Court had the power, under Conn. Gen. Stat. §45a-175(g), to order broad discovery in an accounting proceeding.  This power coincided with the same power that the Superior Court would have in a case involving a challenge to such accounting.  Therefore, the Appellate Court reversed and remanded to the Superior Court to reinstate the original Probate Court discovery order.

Should you have any questions relating to wills, trusts, estates or probate issues generally, please feel free to contact Attorney Russell J. Sweeting, a lawyer in the firm’s Westport, Connecticut office in Fairfield County by telephone at (203) 221-3100 or by e-mail at rsweeting@mayalaw.com.

In re Probate Appeal of Cadle Co., 129 Conn. App. 814; 21 A.3d 572 (2011)