Probate & Trust Law Section Conference Manual ... - Minnesota CLE

3. Estate of Nuo Djeljaj, 954 N.Y.S.2d 853 (N.Y. Surr. Ct. 2012). De facto
fiduciary has duty to account to beneficiaries. After decedent’s death,
attorney provided beneficiaries with an informal accounting reporting
transactions involving decedent’s funds. Attorney later argued that he
never acted as attorney-in-fact and is not a fiduciary, and he does not have
a duty to account. An agent who receives funds on behalf of a principal
has a duty to keep and render an accounting. Additionally, a court has the
equitable power to compel an accounting. In this case, attorney acted as a
de facto fiduciary and was required to furnish an accounting.
4. Kesling v. Kesling, 967 N.E.2d 66 (Ind. Ct. App. 2012). Shareholder’s
transfer of shares of stock into a revocable trust did not extinguish
shareholder’s ownership of the stock. Shareholders entered into a
shareholder’s agreement, which limited the rights of the shareholders to
transfer the stock. Settlor transferred his shares to a revocable trust, and
other shareholders argued that they had the right to purchase such shares
pursuant to the shareholder agreement. The Court held that because the
trust was revocable by the settlor, was included in his estate for federal
estate tax purposes, and that his creditors could attach the trust assets, the
settlor remained the shareholder of the stock.
5. Rose v. Waldrop, 730 S.E.2d 529 (Ga. Ct. App. 2012). After acquired
property clauses are insufficient in and of themselves and a court
must review the circumstances surrounding the transfer of the
property to a trust. The trust agreement indicated that the decedent was
transferring assets “presently owned or hereafter acquired…” to the trust.
The issue before the court was whether the after acquired assets were
properly transferred to the trust. The Court held that a formal transfer of
property to a trust is not required but that a clause transferring after
acquired property does not automatically result in the property being
transferred. A court must explore the circumstances surrounding each
property to determine whether the settlor intended to transfer it to the trust.
6. In re HSBC Bank USA and Ely, 952 N.Y.S.2d 740 (N.Y. Surr. Ct.
2012). When determining whether trustee held a concentration of
assets, all assets were to be considered. Trust was established for
decedent and upon decedent’s death, the remaining trust funds were paid
to a new trust for the benefit of his surviving spouse. The corporate
trustee sought to have its accountings approved and the surviving spouse
objected as a beneficiary and as executor of decedent’s estate alleging that
the trustee violated the prudent investor rule. In particular, the acquisition
and retention of various stock holdings was objected to as it comprised
more than five percent of the trust’s assets if the closely-held assets held in
the trust were excluded. The Court held that standard of conduct
contained in the prudent investor rule does not focus on the outcome;
rather, compliance is determined in light of facts and circumstances
prevailing at the time of the decision. It was proper to consider the
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