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James Brown trustee in contempt battle

01/30/2012

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Brown
The estate of Georgia singer James Brown, who died in 2006, has been plagued by trouble almost even before the testator's death. 

Recently, reported Forbes magazine, owing to court disputes and problems getting income streams from estate assets, the estate faced some $20 million in debt as against $14,000 in cash and other holdings. 

The Augusta Chronicle reported, furthermore, in January that an irrevocable trust established by Brown to benefit children's charities has been fleeced at least to the tune of $373,000 by  its former trustee, David Cannon. 

Presently, Cannon is battling a contempt charge in the South Carolina Supreme Court for failure to pay restitution of this amount, plus attorney fees and penalties. 

Working against Cannon in his efforts to argue the fees and fine are excessive is the fact that he owns a $1 million home in Honduras purchased, in large part it would seem, with funds from the Brown trust.  

Tanner Pittman, LLC is an estate planning and probate law firm that assists clients in pursuing cases of breach of fiduciary duty against executors and trustees in estates.  

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"Tithe" claim against Kathryn Johnson estate

01/17/2012

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92-year-old Kathryn Johnson
Most wills contain standard language requiring executors to pay charitable pledges "whether enforceable or not" out of the estate before any amounts are paid to heirs. 

In August of last year, the Rev. Markel Hutchins strained the "enforceable or not" language farther than it was ever intended to go by suing the estate of Kathryn Johnson, the 92-year-old notoriously shot to death by police return-fire in a mistaken drug raid. 

Johnson's estate famously won a settlement against the City of Atlanta in the amount of $4.9 million for, among other things, her wrongful death in the raid.

Hutchins is suing for $490,000, which represents a "tithe" from the $4.9 million estate, reports AtLaw. The tithe is owed him, Hutchins has said in pleadings because of his role as "principal strategist and issue manager; public relations expert; crisis intervention and crisis management expert; investigator; project manager; government relations expert; and other duties as requested by the Defendants and those acting in concert with them."

The case is presently before the Georgia Court of Appeals on interlocutory appeal from an early trial court ruling.  

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In re Estate of Tarpley: Executor fraud, part 2

01/10/2012

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The most common issue brought up in probate litigation is that of executor fraud and breach of fiduciary duty. Though difficult to prove, it is nevertheless alarmingly common. Executors of an estate sometimes deal with estate property as though it belonged to them, can "compensate" themselves handsomely for executor's services, and with surprising frequency favor one heir over others. 

In re Estate of Tarpley was previously up before our Court of Appeals and was blogged about by this firm here. 

The case involved an executor that treated the decedent's truck as though it were her own and wound up liable for high compensatory damages, punitive damages, and attorney fees. 

The recent opinion, reprinted in whole after the "read more" break below, deals primarily with procedural issues surrounding the award of damages, but the underlying message is clear: executors can be taken to task for their misappropriation of estate property. 

Tanner Pittman, LLC is an estate planning and probate law firm that assists clients in pursuing cases of breach of fiduciary duty against executors and trustees in estates. 

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The cutting edge of probate litigation: Bystander Struck By Flying Body May Sue Dead Man’s Estate, Appeals Court Says

01/06/2012

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This firm is clearly not tackling avant guarde issues in probate litigation, as demonstrated by this article in the Chicago Tribune. According to the story, a man died when struck by an express Amtrak train in 2008. Unfortunately a piece of his body also struck another woman during the accident. 

The woman hit by his flying body parts is now suing the dead man's estate. 

And apparently, she has a case. The Illinois Court of Appeals recently overturned the trial court opinion dismissing the suit. The injuries the plaintiff suffered were, according to the appellate court, a reasonably foreseeable result of the dead defendant's actions. 

The ABA has published a quick write-up of the story here.
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The anti-Laffer curve: Less estate taxation leads to "recession" among estate planning attorneys

12/30/2011

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From legalnews.com, we have the story that perhaps only two tenths of one percent of the population is subject to estate taxes. This, compared to "eight to ten percent of the population" in the 1970's. 

The reason is that the standard exemption from estate taxation rose to $5 million when President Obama signed a compromise budget bill into law in the last days of 2010. The compromise is, however, set to expire beginning in 2013, resetting the exemption level to $1 million if Congress fails to act. 

No tears should be shed, though, for estate and probate practitioners, we are later told in the same article. As the baby boom generation retires and (alas) begins to pass away, probate litigation is increasing at a brisk pace. 

Finally, opines the author of the article, "the recession has created more probate litigation since family members are disappointed with their inheritance."
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On not "splitting the baby" - how best to divvy up personal property

12/08/2011

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In divorce actions, the family dog often keeps couples in court longer than the bank accounts. 

In estates, it's the heirloom quilt, the favorite sweater, or the bird-hunting gun that causes the most acrimony among heirs. 

If drafters of wills and trusts want to avoid squabbling among their heirs, they would do well to give some thought to how their huge inventory of personal property should be divided . 

A frequently used method among estate attorneys is the  family "auction." An executor dividing up an estate may allow heirs to "bid" for items, using not cash but an "account" consisting of the total amount to which they would have been entitled pursuant to the will. 

As an example, suppose an estate has three heirs and (for simplicity's sake) fifteen items of personal property. The executor gives each heir five credits and tells them to select five pieces of property from the fifteen. Naturally, at some point, two heirs will want the same one piece of property - say an heirloom broach. The executor then allows these heirs to "bid" on the broach with their five credits. The highest bidder allocates four credits and is given the broach. The credits are then divvied up among the other two heirs , who use them to bid on the remaining property. 

This scheme can be used a myriad of different ways as long as the goal of the "auction" is an equal distribution of the property according to its subjective value. 

One more note: at least one website, E-divvy-up (edivvyup.com) allows heirs to do exactly this via an online auction. For $49 per auction, many estate executors may find its services well worth the price and a solid way to avoid family acrimony or possible litigation. 

Tanner Pittman, LLC advises clients on probate and estate settlements and is experienced in litigation involving probate matters. 

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In re Estate of Willis - creditors and estates

11/10/2011

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Last term of the the Georgia Court of Appeals brought us a case that makes clear a procedural point, albeit an important one for creditors of an estate. 

When suing a represented estate on a debt, one may require the filing of an inventory or accounting  if one can show that a waiver of that requirement works an injury to the creditor. 

It is not enough, though, to show only the potential for injury. If you have only that, you're left with ordinary discovery rules in probate litigation. 

Full text of the case follows the "read more" below. 

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In re Estate of Tarpley - the high price of executor misdeeds

10/28/2011

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Not infrequent is the case in which an executor of an estate or relative of a decedent begins to parcel out estate property before granted authority by the court. 

In a recent case handled by this firm, the son of the decedent began giving furniture and heirlooms to grandchildren long before the will was found and probated. Fortunately for that son, the matter was settled before the son was could be sued for his misdeeds. 

Explaining why family members of a deceased do this is not hard: they "know the deceased wishes" or are "just doing what's fair." 

In the case of In re Estate of Tarpley, just handed down by the Court of Appeals, the high price of doing this is made manifest. In it, an executrix and sole heir of an estate sold an automobile belonging to the deceased for $12,000 before probate was complete. Later, and after the will was overturned for lack of testamentary capacity, the executrix found herself trying to cover up what was an improper disposition of estate property. 

Before the appeal was finished in Tarpley, the executor (since removed from office) owed the estate $96,433.73 in compensatory and punitive damages. 

About half of this damages award was overturned on appeal; nevertheless because of the Georgia law regarding executors de son tort, damages in the case of bad actors in estates can be quite harsh. 

The full text of the case follows below. Click on the "read more" link.

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Case report: Royal v. Blackwell & breach of fiduciary duty

10/21/2011

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In Royal v. Blackwell, handed down by the Georgia Supreme Court on July 5, 2011, the court held that a lawsuit for an executor's breach of fiduciary duty was not moot, even though all parties except the executor had settled the case and the money that had been improperly distributed by the executor was returned to the proper party.

Executors of wills owe a strict duty to the estate, and the very fact that the executor had breached that duty, the Court explained, gave rise to damages, even if the breach had been corrected.

The judge of the trial court in the case had awarded attorney fees against the executor. The Supreme Court overruled this part of the lower court's decision, stating that it was for a jury to decide whether a party to a case has committed one of the acts that give rise to ground for awarding attorney fees.

Click "read more" below and to the right for the full text of the case.

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Disinheriting and leaving unequal shares

09/14/2011

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The Wall Street Journal posted this about leaving unequal shares of your estate to your heirs.

Among the advice given by the columnist is a recommendation to write one's reasoning for unequal estate shares in a will. Similarly, one could write a letter of intent.

Experience in a litigation setting shows that such clauses and documents rarely carry much weight in court. The reason is that they are typically drafted by the law office preparing the will. If the testator lacked the capacity to make a will, the court will often think, then yet another piece of paper the lawyer drew up does little to add to that capacity.

Practical experience shows that the single best way to leave unequal shares in your will is to tell your children (or other heirs) you're doing it and why. Nothing leads to estate fights quicker than surprises in a will. Similarly, a child that has had months or years to digest the fact that he is receiveing a lesser share (and who has heard "why" straight from the testator) is much less likely to file a suit.

Second to this is some recording or document that demonstrates capacity. A handwritten note or letter; a video tape; a recording of the conversation with the lawyer; or (in extreme circumstances) examination by a physician competent to evaluate mental health are all ways to head off an estate fight before it begins.


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    Tanner Pittman, LLC is a West Georgia law firm that specializes in estate services, civil litigation, and legal transactions.

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