Category Archives: Probate Litigation

Josh Powell Life Insurance Update

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At last.  New York Life has filed a motion to dismiss itself from the case, leaving the Coxes and Powell to duke it out in federal court.

Without taking a position either way, New York Life’s motion surveys the facts – who claimed what and when – and asks the court for permission to give the money to the court and let it decide who gets the money, and asks for an order releasing it from liability for paying the money to the wrong person.  In support of the motion, New York Life refers to the policy, and Josh Powell’s numerous beneficiary designations.  Part I of the insurance documents are here; Part II is here.

Caselaw Update: Court Addresses Undue Influence in Estate of Melter

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Estate of Melter, 167 Wn. App. 285, 273 P.3d 991 (2012) is an interesting case, well authored by both the majority, and the separate concurrence.  It’s a must read for Washington trust and estate lawyers.  We think it is important because it addresses one beneficiary’s confidential relationship with the decedent and how that can affect his (or his opponent’s) burden of production and proof in a will contest where undue influence is alleged.

The case is also important in that it emphasizes testamentary capacity as an important factor in distinguishing mere influence, which is nugatory, from undue influence, which is consequential.  Here are the basic facts: Continue reading →

Inheritance Disclaimer Conundrum

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This question was presented on Oregon Bar Association’s probate/estate listserv.  We thought it deserved some attention.  Here’s the question:

Listmates:

I represent wife of deceased husband. Wife and husband had numerous joint accounts. The accounts were all joint accounts (right of survivorship). The total assets are in the approximate amount of two million dollars. Wife wants to disclaim the sum of one million dollars in order to use deceased husband’s one million dollar Oregon exemption. I recently learned that wife placed the joint accounts solely in her name shortly after husbands death. Other than placing the accounts solely in her name I do not believe that she has taken any other activity as to the accounts. We are still well within nine months from date of death.

Here are the thoughtful (unattributed) responses :

1. Too late. She accepted the survivorship interest by exercising dominion and control over the accounts when she transferred the funds.  Great example of why disclaimer trust planning is very risky and should be avoided whenever feasible.

2. Right on, …. Does Oregon have a counterpart to the Washington Trust and Estate Dispute Resolution Act (TEDRA) RCW 11.96A? We use this to create a court order to overcome many errors, like make irrevocable trusts revocable, defog ambiguities, etc….quite remarkable, in fact….both a judicial and non-judicial (stipulation) methods….please advise, not that I would use one in Oregon due to the garlic wreath I have around my neck when it comes to court… Continue reading →

Were the Powells’ Life Insurance Policies Community Property?

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So we’ve received questions on this, so how about some answers.

First, in Washington, a policy purchased wholly with community property funds is community property.  Occidental Life Ins. Co. v. Powers, 192 Wash. 475, 74 P.2d 27 (1937).

Second, the time of acquisition of the policies matters in determining whether it is community property.  In Washington State, courts apply an apportionment theory in determining the time of acquisition.  Other community property law jurisdictions hold that the ownership of a life insurance policy is determined by reference to the time when the policy was purchased.  So the Powells and Coxes will be looking to when the policies were purchased, and where the Powells lived at that time.

Without knowing the facts (which is what a trial is for), we think it likely these policies were purchased during the Powells’ marriage, and are thus community property under both Utah and Washington law.

One interesting question will be how Josh’s continued payment of premiums after Susan went missing will be treated.  If she is presumed deceased at the time she went missing, then it is arguable that a portion of the proceeds are Josh’s separate property.  See e.g., W. DeFuniak & M. Vaughn, PRINCIPLES OF COMMUNITY PROPERTY 64, 79 (2d ed. 1971).

King County Probate Gone Wild!

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When a court opinion begins, “…. what should have been a simple estate and trust matter became protracted and contentious,” you know you’re in touble.

The Court of Appeals recently published Estates of Foster, 165 Wn. App. 33 (2011).  In this case the Executor and his brother teamed up to distribute from their parents’ estates disproportionately to themselves rather than to the parents’ grandchildren trust beneficiaries as set forth in the parents’ trust documents.

The case is significant for a couple reasons.  First, the court confirms that the Executor was not entitled to a jury trial because, while his fiduciary breach was the gravamen of the case, it was still a probate/trust matter, and restoration of the stolen funds, as opposed to general damages were sought.  The former types of cases don’t get juries; the latter do.

The case is also significant becuase of how the court treats the statute of limitations.  The grandchildren brought their claim more than three-years after the alleged breach.  The statute of limitations for fiduciary breach claims is three-years.  The court allowed the claim, applying the “discovery rule” without much analysis other than finding that the breach could not have been discovered earlier because of the Executor’s failure to cooperate when the grandchildrens’ early information requests.

Did Ryan O’Neal Steal Painting From Farrah Fawcett’s Estate?

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This is the question that is a subject of a Los Angeles County Superior Court lawsuit between the University of Texas and Fawcett’s former boyfriend, Ryan O’Neal.  Fawcett left her art collection to the University of Texas when she died.  Warhol Painting of Farrah FawcettThe Universtity of Texas contends there were two Andy Warhol paintings in Fawcett’s collection.  When she died, the University received one painting, but not the other.  The other painting, pictured left, is in Ryan O’Neal’s living room.  The University of Texas is now suing O’Neal over the painting.  O’Neal defends that Warhol gave the painting to him, not Fawcett.  The lawsuit started out in federal court (here is the complaint), was dismissed, and is now in Los Angeles County Superior Court.

Proving that Fawcett (or her trust) owned the painting at the time of her death could be tricky.  First, unlike financial accounts, cars and real property, personal property is usually not “titled” with a deed or certificate of title or registration.  Second, the Deadman’s Statute (in Washington, RCW 5.60.030) precludes people from testifying about what the decedent told them when they stand to gain from it.  The University of Texas’s lawyers will need to resort to insurance records (likely the paiting was insured), photographs and witness recollections to prove their case.

This type of conflict is not uncommon in estates (In Washington, the dispute is sometimes whether the property was “community property” giving the spouse an undivided 1/2 interest, or “separate property” where the spouse has no interest, other than perhaps a small amount allowed by statute).  The best way to avoid these disputes is to keep an updated inventory of personal property assets (really, all assets should be inventoried), and if/when items are given away, indicate so and to whom it was given.  And remember, personal property includes intangible items, such as digital photographs, royalty rights, domain name registrations, etc.  And while you’re at it, keep an inventory of email accounts and passwords.  (see recent Seattle Times article on this, quoting our former colleague, Wendy Goffe, from Graham & Dunn).