Posts tagged with "trust"

What Happens if I Die Without a Will in Connecticut?

Leave a reply

After someone dies, attention naturally shifts to the decedent’s survivors, property and wishes. A probate court (also called a surrogate court) is a specialized court that handles distribution of the decedent’s property and ensures that any debts, funeral expenses and taxes are paid prior to distributing the remaining assets. If there is a will, the decedent’s wishes are carried out and the process is typically straight forward. However, if there is no will, distribution of property is awarded to survivors in accordance with the state’s laws of “intestacy.”

Asset Distribution

In Connecticut, if you are survived by a spouse and children, your spouse takes the first $100,000 plus half of the remainder and your children take the other half of the remainder. If you are survived by a spouse and children who are not your spouse’s children, your spouse takes half and the children share the other half equally. If you are survived by a spouse and parent(s) but no children, your spouse takes the first $100,000 plus three quarters of the remainder and the parent(s) takes the other one quarter.

If you are survived by a spouse only, your spouse takes it all. If you are survived by children only, your children take it all. If you are survived by parent(s) only, your parent(s) take it all. If you are survived by brother(s) and sister(s) only, your brother(s) and sister(s) take it all. If you are survived by next of kin only, your next of kin takes it all. If there is no next of kin but there is a step-child, your step-child takes it all. If there is no step-child, it all goes to the State of Connecticut.

The Benefits of Having a Will

Regardless of the value of your property, it is always in your best interest to have a will. If you have a will, it may be possible to reduce the amount of tax payable on the inheritance. If you die without a will, your money and property may not be distributed as you had wished. If you are unmarried but have a partner, he or she cannot inherit your property without a will.

If you have children who are minors, you will need a will so that living and financial arrangements are as you had wished in the event of your death. If your former partner’s circumstances have changed and there is a new partner in the picture, you may want to have a will to ensure your property is distributed as you’d wished.

Maya Murphy Attorneys at Law can provide you with estate planning with artfully crafted trusts and tax avoidance. We know that clients want peace of mind for the future. Our experienced attorneys will help you map out a plan so that your family is properly cared for in the event of your death. Please do not hesitate to contact Joseph Maya and the other experienced attorneys at 203-221-3100, or at Ask@Mayalaw.com to schedule a free consultation.

DSUE: The Deceased Spouse’s Unused Exclusion

Leave a reply
What is DSUE?

Many individuals have no idea what the DSUE is. Well, it is a fairly simple term when you break it down. Every individual gets an exclusion amount for estate and gift taxes that is adjusted for inflation, last year it was $5,250,000. That means that on death, or during life, an individual can devise, bequeath, or gift up to that amount without generating any tax liability. (Gifts must be under the annual exclusion amount of $14,000 in order to not be subjected to a 40% tax).

If you are married, you and your spouse can combine your exclusion amounts or, when one spouse passes away with some of their exclusion left, the other spouse may use that. This is called portability and the unused amount is called the deceased spouse’s unused exclusion (DSUE for short).

An Example of DSUE

For example, imagine you and your spouse have used none of your exclusion amounts. Now, one spouse passes away and their estate is $2,250,000. The deceased spouse’s estate will not be subject to estate tax because they had an exclusion amount of $5,250,000 in 2013. Therefore, the spouse had $3,000,000 left after their estate was settled. If the surviving spouse or their executor makes the election, they may use the remaining $3,000,000 from their deceased spouse’s estate in addition to their $5,250,000. This means they can exclude up to $8,250,000 from estate, gift, and generation skipping transfer tax. The DSUE is thus “portable.”

While no estate planner relies on portability (because the government can change the law at any time), it is definitely a useful tool for those with large enough estates to utilize it. In 2013, the government set forth legislation to make portability “permanent” for the foreseeable future.

For more on the DSUE and portability see this article: Lewis Saret, Estate Tax Portability – Date DSUE Amount May Be Taken Into Account, Forbes, Jan. 14, 2014.

–

If you have any questions related to DSUE or other matters of estates and trusts, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a free initial consultation.

2014 Estate & Gift Tax Limits Adjusted For Inflation

Leave a reply

Starting in 2014, people who have done some estate planning and made the maximum tax-free transfers to their families (and those thinking about doing it) can take another crack at it. Beginning January 1st 2014, the amount folks can pass on during life (and at their death) completely free from federal estate tax will increase by an additional $90,000.

Using the Consumer Price Index data for the most recent month and the preceding 11 months, the tax experts at Research Institute of America calculated and reported increases for 2014 to a number of tax limits including the income where the various marginal tax brackets apply, the standard deduction amounts, the personal exemption amount, and a number of other items. They also calculated adjusted amounts for the various estate tax and gift tax limits that will apply in 2014.

  • Gift tax limits rise in 2013
  • 2013 tax rules that can save you money
  • Reducing taxes on IRA payouts
Limits Affecting Tax Free Gifts

Here are a few of the new limits that affect tax free gifts made in 2014:

Unified estate and gift tax exclusion amount. For gifts made and estates of decedents dying in 2014, the exclusion amount will be $5,340,000 (up from $5,250,000 for gifts made and estates of decedents dying in 2013).

This means that in 2014, each person has a credit that can be used to offset the estate tax on a taxable estate of up to $5.34 million of assets. The practical application of this is that individuals can make gifts during life or transfers at death of up to this new higher limit and pay no federal estate tax. Also, new last year is that spouses may combine their unused individual credit amounts and pass on assets free of estate tax on a taxable estate of up to $10.68 million at the death of the second spouse, assuming none of these credits were used during their lifetimes.

Estate Limit Changes

Other estate limits that change in 2014 include:

Generation-skipping transfer (GST) tax exemption. The exemption from GST tax will be $5,340,000 for transfers in 2014 (up from $5,250,000 for transfers in 2013).

Increased annual exclusion for gifts to non-citizen spouses. For gifts made in 2014, the annual exclusion for gifts to non-citizen spouses will be $145,000 (up from $143,000 for 2013).

Foreign earned income exclusion. The foreign earned income exclusion amount increases to $99,200 in 2014 (up from $97,600 in 2013).

Gift tax annual exclusion. For gifts made in 2014, the gift tax annual exclusion will be $14,000 (same as for gifts made in 2013). Generally the amount that can be given to any individual each year that is excluded from the gift tax is $14,000 per person per year. In 2014, this amount is projected to remain at $14,000 per person as the amount that may be gifted annually free from the gift tax. Parents may also use the technique of “gift splitting” or combining gifts to a child, whereby they can each make a gift of $14,000, for a total amount of tax free gifts made of $28,000 to a single person or child each year.

Credit: Ray Martin

–

If you have any questions related to estates and trusts, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a free initial consultation.

LegalZoom Will Held Invalid Due to Lack of Compliance with Statute of Wills

Leave a reply

In a Superior Court case, Litevich v. Probate Court, a LegalZoom was held invalid for failing to comply with the requirements of the Statute of Wills C.G.S.A section 45a-251. The plaintiff in the case, a proposed beneficiary under the LegalZoom attempted to have the will probated although it was not witnessed nor signed. The court held that the lack of those requirements was not simply a “harmless error” and therefore the will was invalid. Instead, the court held valid a will some 20 years older which gave nothing to the plaintiff.

Case Details

The facts of this case were simple. The decedent had no children, was not married, and met the plaintiff in 2000 while working at Yale. Around 2011, the decedent fell ill due to her habit of being a heavy smoker. When there were little signs of her health improving she sought to update her will but decided to use LegalZoom instead of contacting an attorney. Plaintiff maintained decedent chose this method to save money.

After completing the will online the decedent had to provide personal information, give numerous confirmations to LegalZoom, and electronically sign that the wishes stated were indeed hers. Once completed, decedent paid LegalZoom and they mailed her the documents. Unfortunately, decedent was in the hospital when the documents arrived and plaintiff received them for her. Instead of getting the will signed, they attempted to have a notary present because they believed one was needed in order for the will to be valid. A notary is not required by statute in Connecticut.

A notary was not available until decedent fell into such a state of health that she did not have the legal capacity necessary to sign a legally binding document. The will was left with plaintiff unsigned upon decedent’s death. Plaintiff contends that the LegalZoom will is binding and that her electronic signature and confirmation online should satisfy the Statute of Wills.

The Court’s Analysis

The court began its analysis by laying out Connecticut law which states as follows: § 45a–251, provides: “A will or codicil shall not be valid to pass any property unless it is in writing, subscribed by the decedent and attested by two witnesses, each of them subscribing in the testator’s presence; but any will executed according to the laws of the state or country where it was executed may be admitted to probate in this state and shall be effectual to pass any property of the decedent situated in this state.”

“[O]ur [S]tatute [of Wills] amounts to a positive rule for the transmission of property, which must be complied with, as a complete act at the time of execution, or never, so far as the act of the testator is concerned.” (Emphasis added; internal quotation marks omitted.) Hatheway v. Smith, 79 Conn. 506, 511, 65A, 1058 (1907).

The statute has, from its inception, been treated as an act that “permits a disposition of property by will upon compliance with the prescribed conditions.” (Emphasis added.) Id. Thus, to be valid, a will must strictly comply with the requirements of the statute. See Gardner v. Balboni, 218 Conn. 220, 225, 588 A.2d 634 (1991); see also Hatheway v. Smith, supra, 79 Conn. 511 (Statute of Wills “prohibitory and exhaustive”). The statute is designed to “effectuate the policies of safeguarding titles and frustrating fraudulent claims.” Starcez v. Kida, 183 Conn. 41, 45 n. 2, 438 A.2d 1157 (1981).

The Court’s Decision

The court followed the law strictly and succinctly stated, “the language of § 45a–251 plainly provides that for any testamentary instrument to be valid it must be subscribed by the decedent and attested by two witnesses in the decedent’s presence. Gardner v. Balboni, supra, 218 Conn. 225. In the present case, the will is not subscribed by the decedent or two witnesses. Accordingly, the court concludes that the Legalzoom will fail to satisfy the statute.”

Although the court made this finding, the plaintiff still attempted to have the will probated by means of the harmless error doctrine. This doctrine “provides that a testamentary instrument is not invalid for failure to satisfy the execution formalities of a given jurisdiction if the proponent of the will can establish by clear and convincing evidence that the testator intended the document to be his or her will.

See Uniform Probate Code, § 2–503, p. 141 (“Although a document … was not executed in compliance with [the formalities for execution of a will], the document or writing is treated as if it had been executed in compliance … if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute … the decedent’s will …”); 1 Restatement (Third), supra, § 3.03, p. 217 (“A harmless error in executing a will may be excused if the proponent establishes by clear and convincing evidence that the decedent adopted the document as his or her will”).”

The Harmless Error Rule

No court in Connecticut has decided to adopt the harmless error rule and neither has the Connecticut Legislature in C.G.S.A. 45a-251. When speaking on the doctrine the court said even if it was to apply, “[i]n applying [the harmless error doctrine] to particular cases, a hierarchy of sorts has been found to emerge among the formalities.”

For example, “[t]he requirement of a writing is so fundamental to the purpose of the execution formalities that it cannot be excused as harmless under the principle of [the] Restatement. Only a harmless error in executing a document can be excused …” (Emphasis in original.) Even then, “[a]mong those defects in execution that can be excused, the lack of a signature is the hardest to excuse. An unsigned will raises a serious but not insurmountable doubt about whether the testator adopted the document as his or her will.”

Following the Harmless Error Doctrine

Instead of clearing, adopting or rejecting the doctrine, the court concluded the following: “were the court to agree with the plaintiff that Connecticut law allows for the harmless error doctrine, it would not apply to the facts of this case. As the defendant observes, and as confirmed by the commentary to 1 Restatement (Third), supra, § 3 .03, within the harmless error doctrine exists a “hierarchy” of defects. Failure to sign a will at all, as with the case presently before the court, is considered by those states that have used the doctrine to be one of the most difficult defects to overcome. Id.

Therefore, even if Connecticut were to follow the doctrine, it would still be a stretch to apply it to facts such as those presently before the court, where the will was signed by neither the decedent nor any witnesses. The “electronic signature” claimed by the plaintiff is not sufficient because, even if electronic signing were allowed by § 45a–251, a question the court does not now decide, the signature does not appear on the face of the will. Accordingly, the court rejects the plaintiff’s arguments relating to the harmless error doctrine.”

Conclusion

As you can see, sometimes LegalZoom is not all it’s cracked up to be. Truly nothing can beat the experience and know-how of a lawyer who has dealt with Connecticut wills, trusts, and estates. Although at times expensive, the cost can be balanced against the goals it achieves. For example, this case. The sad story of the decedent who should have had her current last wishes carried out, not the wishes she made some two decades prior. Although LegalZoom may be a helpful resource in some instances, it does not in any way provide a substitute for an attorney. But don’t take our word for it, here is LegalZoom’s disclaimer from their own website in full:

Disclaimers

LegalZoom is not a law firm, and the employees of LegalZoom are not acting as your attorney. LegalZoom’s legal document service is not a substitute for the advice of an attorney.

LegalZoom.com, Inc. (“LegalZoom”) is a registered and bonded legal document assistant, #0104, Los Angeles County (exp. 12/13) and is located at 101 N. Brand Blvd., 11th Floor, Glendale, CA 91203. LegalZoom cannot provide legal advice and can only provide self-help services at your specific direction.

LegalZoom is not permitted to engage in the practice of law. LegalZoom is prohibited from providing any kind of advice, explanation, opinion, or recommendation to a consumer about possible legal rights, remedies, defenses, options, selection of forms or strategies

–

This site is not intended to create an attorney-client relationship, and by using LegalZoom, no attorney-client relationship will be created with LegalZoom. Instead, you are representing yourself in any legal matter you undertake through LegalZoom’s legal document service. Accordingly, while communications between you and LegalZoom are protected by our Privacy Policy, they are not protected by the attorney-client privilege or work product doctrine.

LegalZoom provides an online legal portal to give visitors a general understanding of the law, as well as to provide an automated software solution to individuals who choose to prepare their own legal documents. To that extent, the site publishes general information on legal issues commonly encountered.

LegalZoom’s document service also includes a review of your answers for completeness, spelling and grammar, as well as internal consistency of names, addresses and the like. At no time do we review your answers for legal sufficiency, draw legal conclusions, provide legal advice or apply the law to the facts of your particular situation. LegalZoom and its services are not a substitute for the advice of an attorney.

–

Although LegalZoom takes every reasonable effort to ensure that the information on our website and documents are up-to-date and legally sufficient, the legal information on this site is not legal advice and is not guaranteed to be correct, complete or up-to-date. Because the law changes rapidly, is different from jurisdiction to jurisdiction, and is also subject to varying interpretations by different courts and certain government and administrative bodies, LegalZoom cannot guarantee that all the information on the site is completely current. The law is a personal matter, and no general information or legal tool like the kind LegalZoom provides can fit every circumstance.

Therefore, if you need legal advice for your specific problem, or if your specific problem is too complex to be addressed by our tools, you should consult a licensed attorney in your area. Visitors to our site may obtain information regarding free or low cost representation through your state bar association or local legal aid office.

–

This site and some of the articles on this site contain links to other resources and businesses on the Internet. Those links are provided as citations and aids to help you identify and locate other Internet resources that may be of interest, and are not intended to state or imply that LegalZoom sponsors, is affiliated or associated with, guarantees, or is legally authorized to use any trade name, registered trademark, logo, legal or official seal, or copyrighted symbol that may be reflected in the links.

LegalZoom is not responsible for any loss, injury, claim, liability, or damage related to your use of this site or any site linked to this site, whether from errors or omissions in the content of our site or any other linked sites, from the site being down or from any other use of the site. In short, your use of the site is at your own risk.”

Our estate planning firm in Westport Connecticut serves clients with will, trust, and estate law issues from all over the state including the towns of: Bethel, Bridgeport, Brookfield, Danbury, Darien, Easton, Fairfield, Greenwich, Monroe, New Canaan, New Fairfield, Newton, Norwalk, Redding, Ridgefield, Shelton, Sherman, Stamford, Stratford, Trumbull, Weston, Westport, and Wilton. We have the best probate attorneys in CT on staff that can help with your Connecticut or New York estate today.

If you have any questions or would like to speak to a probate law attorney about a will, trust, or estate matter, please don’t hesitate to call our office at (203) 221-3100. We offer free consultation on all matters. Call today.

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

Leave a reply
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.

Spouse’s Testamentary Trust is Included When Determining Medicaid Eligibility for Long Term Care

Leave a reply
Palomba-Bourke v. Dep’t of Soc. Services, CV116010448S, 2012 WL 2044788 (Conn. Super. Ct. May 10, 2012)

In a case before the Superior Court of Connecticut, a wife appealed the final decision of the Department of Social Services determining that her husband did not qualify for Title XIX (Medicaid) benefits to cover his long term care because the wife’s testamentary trust was considered an available asset.  The Superior Court determined that the wife’s testamentary trust was appropriately classified and dismissed the appeal.

The Case

In 1976, the wife’s first husband died and made her the beneficiary of a testamentary trust.  The provisions of the testamentary trust provide that the trustees will pay the wife during her lifetime “so much of the annual net income from the Residuary Trust and so much of the principal thereof as the Trustees in their sole discretion shall deem advisable for [her] more comfortable care, maintenance and support.”  The wife later remarried.

In 2009, her second husband entered a long term care facility and applied for Medicaid.  In June 2010, the Department of Social Services determined that the Community Spouse Protected Amount (CPSA) was $109,540. The CPSA included the principal value of the testamentary trust in its calculations because the trust was deemed by the Department of Social Service’s legal counsel to be a resource that was available to the wife.  Because the husband’s assets exceeded the allowable limit, the Department of Social Services denied his request for Medicaid.

Conclusions Made by the Department of Social Services

At the November 2010 administrative hearing on the denial of the husband’s Medicaid application, the Department of Social Services hearing officer made several conclusions of law.

First, he found that the wife and her husband were considered to be spouses as defined by the Medicare Catastrophic Coverage Act (MCCA) of 1998.  Second, this act provides that all the resources held by either spouse, or by both spouses, are considered available to the institutionalized spouse.  Third, effective June 2010, the wife’s assets were $514,977, which was the value of her testamentary trust.  Fourth, the Department of Social Services correctly determined the CPSA to be $109,560.  Fifth, the uniform policy manual (UPM) of the Department of Social Services provides that the assets of the spouse still living in the community in excess of the CPSA to be available to the institutional spouse.

Therefore, after allowing the wife her CPSA of $109,560, the Department of Social Services determined that $405,417 of her assets were available to her husband.  Sixth, the asset limit for Medicaid was $1,600.  Therefore, because the husband’s available assets of $407,417 were in excess of the $1,600 limit, the Department of Social Services was correct in denying the husband’s request for Medicaid.

The Appeal

On appeal to the Superior Court, the wife contended that the Department of Social Services illegally determined that the corpus of her testamentary trust was available to her husband because the trust was created before the effective date of the MCCA.  However, the court determined that the precedent cited by the wife in support of this argument was narrowly applicable a special type of self-created inter vivos trust that was affected by U.S. Congressional legislation purporting to close loopholes.  This precedent did not propose a general role that would restrict the applicability of the MCCA to the husband’s Medicaid eligibility determination.

The Superior Court re-iterated the general rule that a Medicaid applicant is subject to the federal and state statutes regarding assets that are in effect at the time of the institutionalization or application.  The MCCA rules for treatment of resources, 42 U.S.C. § 1396r-5(c)(2)(A), and the Connecticut implementation of federal law, UPM § 4025.67(A), both support this interpretation.  Both statutes require assets held either by the spouse living in the community or by the institutionalized spouse to be considered available to the institutionalized spouse for the purposes of Medicaid eligibility.

Furthermore, the legislative history of the MCCA regarding the attribution of resources requires “Any countable resources belonging to either or both spouses would be included in this determination, including resources from inheritance or previous marriages.” H.R. Rep. 100-05(II), at 70 (1998), reprinted in 1998 U.S.S.C.A.N. 893.

The Decision

Therefore, the Superior Court determined that the Department of Social Services appropriately deemed the wife’s testamentary trust to be an asset available to her institutionalized husband when determining his eligibility for Medicaid, and that the denial of the husband’s request for Medicaid was correct.  The wife’s appeal of the Department of Social Services determination was denied.

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

Leave a reply
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

Leave a reply
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

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

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.

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.

Determining the Rights of the Parties

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.

The Court’s Findings

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.

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

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

In a 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.

Case Background

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.

Legal Representatives of a 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.

The Language of a Trust Instrument

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)

The Court’s Decision

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.