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Probate & Property

Mar/Apr 2023

Keeping Current—Probate

Gerry W Beyer


  • In cases, executor, court lacks authority to refuse letters to nominated personal representative who is qualified.
  • In tax cases, rulings and regulations, trust must return refund proceeds to IRS.
  • In legislation, California establishes procedures for the replacement of an incapacitated or deceased professional fiduciary. 2022 Cal. Legis. Serv. Ch. 612.
Keeping Current—Probate
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Keeping Current—Probate offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.



Revocation on divorce statute applies when insured dies after effective date. South Carolina’s revocation on divorce statute, S.C. Code Ann. § 62-2-207, was amended in 2013 to apply to life insurance beneficiary designations, among other non-probate property designations. In Meier v. Burnsed, No. 2019-000518, 2022 WL 4488505 (S.C. Ct. App. Sept. 28, 2022), the South Carolina intermediate appellate court for the first time dealt with an appeal of a trial court decision holding that the amended statute did not apply to a life insurance beneficiary designation where the policy was purchased and the divorce occurred before the effective date of the amendment even though the insured ex-spouse died after the effective date. In an opinion examining cases from several other jurisdictions, the court reversed, holding that the statute does apply, based on the statute itself, the law of other states dealing with similar statutes, and the surviving ex-spouse’s lack of any vested right in the policy.


Profit-sharing plan is unassignable and therefore exempt from levy. A creditor garnished a debtor’s interest in a profit-sharing plan and an IRA. The party holding the plan and the IRA moved to intervene to ask the court to formulate an order on the disposition of both assets. The trial court denied the motion, ordered the liquidation of both assets and delivery of the proceeds to the creditor, then reconsidered concerning the profit-sharing plan, holding that it was exempt because ERISA preempted California law. On appeal, the intermediate appellate court in Coastline JX Holdings LLC v. Bennett, 296 Cal. Rptr. 3d. 437 (Cal. Ct. App. 2022), affirmed, using a different rationale. The profit-sharing plan is subject to ERISA under which it is not assignable. Under California Law, Calif. Enf’t Judgments L. §§ 695.030 & 704.210, property that is not assignable is exempt from levy. ERISA preemption is not involved. The order with respect to the IRA stood because the debtor did not file a timely appeal.


Separation agreement is sufficient waiver and enforceable without regard to ERISA. Spouses entered into a separation agreement in anticipation of divorce. The agreement specifically stated that it would be enforceable against each party’s estate. The agreement also stated that each spouse was entitled to one-half of the total retirement assets acquired during the marriage. One spouse died before the entry of a final decree of dissolution, and the personal representative of the estate sought a judgment declaring that the surviving spouse was entitled to one-half of the decedent’s retirement accounts. The Superior Court found that the agreement was a valid waiver and not preempted by ERISA. On appeal by the surviving spouse, the Washington intermediate appellate court affirmed in Matter of Estate of Petelle, 515 P.3d 548 (Wash. Ct. App. 2022), holding that the language regarding retirement accounts was sufficiently specific to constitute a valid waiver and was not preempted because the agreement applies only to the surviving spouse’s actions with regard to the accounts following distribution by the plan administrator.


Court lacks authority to refuse letters to nominated personal representative who is qualified. In its opinion in Araguel v. Bryan, 343 So. 3d 1236 (Fla. Dist. Ct. App. 2022), an intermediate Florida appellate court held that the trial court lacks the authority to refuse to appoint as the executor of a testator’s estate the person named in the decedent’s will who satisfies the statutory requirements—that is, is a resident of Florida at the time of the decedent’s death, is sui juris, and has not been convicted of a felony—even though the trial court determines that the nominee may have a conflict of interest with the estate.

Harmless Error

Harmless error rule authorizes probate of lost will. The testator’s original will had been in the testator’s possession and could not be found after the testator’s death. The testator’s child, who was the nominated executor, offered a copy for probate, and the decedent’s other children denied any knowledge of a will and asked the court to open an intestate administration. Both parties moved for summary judgment, and the trial court ordered probate of the will, finding that the will had not been in the testator’s “exclusive possession” because all of the children had access to the place where it was kept in the testator’s residence and that the will did express the testator’s testamentary intent. The New Jersey intermediate appellate court in Matter of Estate of Iapalucci, No. A-3670-20, 2022 WL 5054416 (N.J. Super. Ct. App. Div. Oct. 5, 2022), affirmed, holding that although the law does not require that the will be in the testator’s “exclusive possession” for the presumption of destruction with intent to revoke to have effect, clear and convincing evidence showed that the will expressed the testator’s testamentary intent and was entitled to probate under the harmless error rule codified in N.J. Stat. Ann. § 3B:3-3.

No-Contest Clauses

Untimely challenge to trust violates no-contest clause. California law, Cal. Prob. Code § 16061.7, requires the trustee of a revocable trust to give notice to the beneficiaries of certain events in the life of the trust to permit them to bring an action to contest the validity of the trust within given time limits. In its opinion in Meiri v. Shamtoubi, 297 Cal. Rptr. 3d 397 (Cal. Ct. App. 2022), a California intermediate appellate court held that a contest can be subject to an enforceable no-contest clause even though it is brought after the expiration of the time limit triggered by proper notice of the trust becoming irrevocable. The untimely nature of the contest also means that there is no “reasonable likelihood” that relief can be granted, and therefore it was brought without probable cause.

Spendthrift Trusts

Funds set aside for debtor-beneficiary are not subject to levy. A creditor garnished the debtor’s interest in two discretionary trusts whose terms included valid spendthrift provisions. The trial court denied the beneficiary’s motion to quash, and, on appeal, the Iowa intermediate court in A.Y. McDonald Industries v. McDonald, No. 21-1365, 2022 WL 3905059 (Iowa Ct. App. Aug. 31, 2022), affirmed as to one trust because the decision was res judicata but reversed as to the other where the trustee continued to hold dividends on closely-held stock in what appears to be a sub-trust. The court concluded that because the trustee continued to hold the funds in trust, they had not been distributed and therefore were not subject to the creditor’s claim because the trust was discretionary and the creditor could not compel the trustee to make a distribution.

Will Execution

Signatures of witnesses on self-proving affidavit but not will is sufficient execution. Evidence showed that the testator signed the testator’s will in the presence of two witnesses and a notary. Although the testator signed the will, the witnesses signed only the self-proving affidavit attached to the will and their signatures were notarized. The will was admitted to probate, and a disinherited child of the testator appealed on the grounds that the will had not been duly executed because the witnesses had not signed the will. The intermediate Connecticut appellate court in In re Harris, 282 A.3d 467 (Conn. App. Ct. 2022), affirmed the decree, holding that, based on prior judicial decisions, the testator’s signature was properly attested by two witnesses.

Tax Cases, Rulings, and Regulations

Charitable Remainder Annuity Trust

Taxpayers cannot deduct value of crops transferred to trust as a charitable deduction. The taxpayers transferred in kind agricultural crops to the CRATs. The trusts used the proceeds from the sale of the crops to purchase annuity plans. The plans made cash distributions to the taxpayers. The Tax Court in Furrer v. Comm’r, T.C. Memo 2022-100 (2022), determined that the taxpayers were not entitled to charitable contribution deductions for the portions of the crops transferred to the trusts. The court reasoned that taxpayers did not provide any substantiation for the value of the crops transferred. Also, any charitable deduction would be limited to their cost or adjusted basis in the crops, but their basis was zero as taxpayers had fully expensed all costs of growing the crops. Additionally, the annuity distributions were taxable to the taxpayers as ordinary income because the sale of the crops from which the annuities were purchased was ordinary income to the CRATS. The distributions are ordinary income to the extent that the trusts received ordinary income from the crops.

Tax Deficiency

The trustee could not substitute for the decedent when filing a petition to redetermine tax deficiencies. At the decedent’s death, her daughter became the sole trustee of a trust the decedent had established during her life. Her heirs did not open a probate estate, and thus there was no court-appointed personal representative. The daughter as trustee filed a petition for redetermination of deficiencies after the IRS issued a notice of deficiency to the decedent. The Tax Court in Sander v. Comm’r, T.C. Memo 2022-103 (2022), determined that the daughter as trustee could not be substituted for the decedent as a party in the determination case. Florida law did not authorize the trustee to bring the action, as no trust property was directly involved. The Tax Court reserved ruling on the motion to dismiss for lack of jurisdiction to allow probate to be opened for the estate and a personal representative to be appointed.

Tax Refund

Trust must return refund proceeds to IRS. The decedent’s trust became irrevocable at death. The trust assets included an ownership interest in a limited liability company. The company reported capital gains in 2009 and 2010, which resulted in flowthrough income to the trust. After the decedent’s death, his estate borrowed money from the company. The interest paid by the estate to the company resulted in flowthrough income for the trust. The flowthrough income was reported. Separately, the estate filed a petition in tax court objecting to proposed adjustments to its Form 706. The parties’ settlement limited, among other things, the estate to a deduction of 6 percent interest on the note. As a result, the trust accrued less interest as income for 2010. The trust filed a tentative claim for refund on Form 1045 to recover an overpayment of income tax paid by the trust for 2009 and 2010. The company did not file an amended partnership income tax return. The Tax Court in Richard J. O’Neil Trust v. Comm’r, T.C. Memo. 2022-109 (2022), determined that the trust was not the appropriate taxpayer to file a claim for a refund. It also held there was no claim of right because the company had an unrestricted right in the sales proceeds. No portion of the item was repaid as a result of the legal disputes involving the company. The trust’s right to the income was always unrestricted, and Section 1341 claim of right did not apply. The trust’s mitigation theory failed as the trust should have filed a refund claim for the years it claims it overpaid—2009 and 2010 —but instead, it filed for 2014. The trust’s equitable recoupment theory failed because the trust is not the appropriate party to seek a refund. The deficiency upon which the argument is based arises from deficiencies directly related to the estate’s taxes, not the trust’s.


East Asian Law

In Cross-Border Trust Disputes and Choice of Law in East Asia, 31 Wash. Int’l L.J. 117 (2021), Ying Khai Liew analyzes the choice of law rules in the Hague Convention on the Law Applicable to Trusts and on Their Recognition, ultimately suggesting that the four East Asian jurisdictions (Japan, Korea, Taiwan, and China) should develop comprehensive choice of law rules based on the Convention.

Guardianship and Special Needs Trusts

In Guardianships vs. Special Needs Trusts, and Other Protective Arrangements: Ensuring Judicial Accountability and Beneficiary Autonomy, 72 Syracuse L. Rev. 423 (2022), A. Frank Johns, Robert D. Dinerstein, and Patricia E. Kefalas Dudek focus on rising tensions and conflicts (perceived and actual) occurring among guardianships, special needs trusts, and other protective arrangements. They present policy recommendations and practice pointers for working groups and National Guardianship Summit delegates to consider in their deliberations.

Inherited Citizenship

In Inheriting Citizenship, 58 Stan. J. Int’l L. 1 (2022), Scott Titshaw analyzes the history, current rules, global trends, politics, and particularly the purposes of formal inherited citizenship laws around the world, exploring the relevance of whether the rules play a primary or supplemental role in defining a nation’s citizenry.

Nonmarital Property Rights

Gary E. Spitko’s article, Integrated Nonmarital Property Rights, 75 SMU L. Rev. 151 (2022), argues that, despite the increasing prevalence of nonmarital cohabitants, American family property law generally fails to support unlicensed nonmarital couples and proposes an “integrated” approach to nonmarital property rights.

Repairing the Racial Wealth Gap

Sarah Moore Johnson and Raymond C. Odom propose to use tax policy to repair the racial wealth gap. In The Forgotten 40 Acres: How Real Property, Probate & Tax Laws Contributed to the Racial Wealth Gap and How Tax Policy Could Repair It, 57 Real Prop. Tr. & Est. L.J. 1 (2022), the authors posit that these reparations can be achieved by using the estate tax and new charitable contribution rules to create a public and private partnership that makes both direct payments and community-based payments with a focus on the cornerstone of all American rights, that is, property.

Sperm Donor Privacy

In her Note, Privacy vs. Identity Rights: A Call for the United States to Adopt the United Kingdom’s “Open ID” System for Artificial Reproductive Technology, 54 Case W. Rsrv. J. Int’l L. 419 (2022), Rachel L. Emerson argues that, as a social policy issue, the United States must learn from other countries to provide a unified and sustainable solution that balances the identity rights of a donor-conceived child and the protection of the privacy rights of gamete and embryo donors.

Supportive Decision-Making

Rebekah Diller explores the potential of SDM for older adults, identifies some of the obstacles that have prevented SDM from being used more broadly by this population, discusses ways of surmounting those obstacles, and makes recommendations for how we can move forward to ensure that older adults’ human and decision-making rights are respected on an equal basis to others in the United States in Supported Decision-Making Potential and Challenges for Older Persons, 72 Syracuse L. Rev. 165 (2022).


California enhances its provisions governing guardians ad litem. 2022 Cal. Legis. Serv. Ch. 843.

California establishes procedures for the replacement of an incapacitated or deceased professional fiduciary. 2022 Cal. Legis. Serv. Ch. 612.

California updates the law regarding accounts complying with the federal Achieving a Better Life Experience Act of 2014. 2022 Cal. Legis. Serv. Ch. 896.

Delaware enacts the Revised Uniform Law on Notarial Acts. 2022 Del. Laws Ch. 425.