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Updates
for August, 2005
Bernard v. Foley 130 Cal App 4th 1109
This is a California case having to do with the Caretaker presumption.
The
issue is whether the services provided by long-term friends provided for the
last 8 weeks of the Decedent’s life arise to the level of a caretaker.
Decedent was a widow with no children. The case is being brought by her Niece,
Bernard, who claims that the 7th amendment to the Trust, was invalid as being
made by undue influence.
Foley is the successor trustee along with his girlfriend, Erman. They had known
the Decedent for many years. Two months prior to her death, the Decedent resided
at the home shared by Foley and girlfriend. The two provided care including
making meals, helping on bathroom duty, cleaned her room, wound care and
administering morphine.
Three days before death, the Decedent executed the 7th amendment to the trust
which split the trust evenly between Foley and Erman.
Foley and Erman argue that they were long-term friends of the Decedent and thus,
were natural beneficiaries. Further, that their services were provided just
prior to death but that their friendship was a lifetime.
The court looked to the duties provided by Foley and Erman. Specifically, they
found that wound care and administering drugs were akin to a care custodian.
Thus, they are subject to the rebuttable presumption.
Thus the decision revolved around the definition of what the distinction was
between a friend, nurse, and caretaker.
Private Letter Ruling 200530002
This ruling has to do with Disclaimers made before January 1, 1977.
The trust was formed and funded and provided that income will be provided to
his only son, for life, and then and was split into 5 pieces of income for the
grandchildren. The last living grandchild gets the corpus.
One grandson learned of his interest in the trust upon his father’s death. He
thereafter received income. The grandson wants to renounce his potential
interest in the corpus, but keep his right to income.
The Service’s Ruling was that (1) because the transferor kept the interest for a
reasonable time after he learned of the receipt, and then transferred it, he had
possession and this resulted in a gift, (2) the disclaimer was not valid because
he took actual receipt, and (3) generation skipping tax did not apply since it
went from parent to child.
In Re Turner Lewis Trust v Hunt &
USA 03-2118M USDC
This is a Federal Case determined under Louisana law.
The Decedent, Lewis was comatose. He had no children.
During that time, his nephews petitioned the court to establish a
conservatorship which was granted. The conservators created a trust and put all
of his assets into it. The court approved the Trust. Six days later, Decedent
dies.
The Trust called for an uneven division of assets between the nieces and
nephews. If the Decedent had died intestate, each child would have received
equal shares. Several of the neices and nephews are suing for their intestate
share and to set aside the Trust.
Specifically, one of the nieces was disinherited because she had an IRS lien
against her.
The IRS is seeking to attack the trust on behalf of the disinherited niece
because, if the trust was invalidated, this niece (Mrs. Hunt) would have
received a larger share and she had a tax lien against her. The niece stated
though that she did not mind being disinherited and does not want her share.
The court ruled that the IRS lacked standing and could not invalidate the trust.
The nieces and nephews did have standing and thus the case was remanded for
further review.
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