Sapp v. Rogers
Cite as E068030
Filed June 11, 2019
California Court of Appeal, Fourth District
Case Overview: Court removes trust administrator for delay and breach of duties.
After the passing of Roscoe Sapp, Sr. in 1994, Edith Rogers and Roscoe Sapp, Jr., his granddaughter and son, were appointed co-administrators of his estate. The Estate included 11 parcels of land worth approximately $6-9 million. On June 22, 2001, Rogers and Sapp, Jr. petitioned the probate court of California for instructions on how to administer the estate because each had a different opinion as to what the Decedent had intended. One believed the Decedent intended for all but one of the real property parcels to be liquidated and that proceeds of the same would be distributed to heirs capable of caring for themselves with the remaining assets to be used to establish a care facility for heirs who were incapable of caring for themselves; whereas, the other believed said real property parcels should be sold and net proceeds distributed to the heirs outright. The living heirs executed documents indicating they agreed with the latter and wished for the net proceeds to be distributed equally to them, outright and free of any restriction. On August 30, 2001, the petition for instructions was granted and the Judge directed the co-administrators to “sell the [estate’s] property.”
Before the properties were sold pursuant to the 2001 Order, however, Sapp, Jr. died (in 2003), leaving Rogers as the sole administrator. By 2016, the real property parcels still had not been sold. In light of the delay,two of the decedent’s grandsons, Brian Lincoln and Armuress Sapp, each filed petitions to remove Rogers as administrator of the Estate, claiming Rogers never showed real intent to distribute the estate to Roscoe Sapp Sr.’s heirs.
The probate court filed a tentative decision granting the petitions to remove Rogers as administrator and appoint Armuress as successor administrator. According to the testimony, Rogers “tried to buy out various beneficiaries for $10,000 per person,” although the properties were worth millions. Based on this, the probate court concluded Rogers had acted in bad faith toward the heirs of the Estate and was “not capable of acting as an impartial fiduciary.” Rogers appealed (in 2017). The Appellate Court concluded that Rogers resisted implementing the 2001 instructions and acted in bad faith toward the heirs, which was deemed by the Court as “mismanagement”, necessitating the removal of Rogers and the appointment of a new administrator in order for the estate to be resolved.
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North Carolina Dep. of Revenue v. Kaestner
Cite as 588 U. S. ____ (2019)
Opinion Decided June 21,2019
Supreme Court of the United States
Case Overview: Court rules that Department of Revenue cannot tax a trust created and maintained in another state.
Joseph Lee Rice, a New York resident, formed a trust which was passed on to his daughter, Kimberley Rice Kaestner, who, at the time, was also a New York resident. After moving to North Carolina, the trustee, Kaestner, divided the trust into three separate sub-trusts for her and her children’s lawful benefit. During the tax years of 2005 through 2008, North Carolina imposed a tax of more than $1.3 million even though the Trust did not have a physically presence in the State of North Carolina, did not make direct investments in the State of North Carolina, or posses any property in the State of North Carolina. Kaestner paid the tax under protest and, then, sued the North Carolina Department of Revenue for violating the Fourteenth Amendment’s Due Process Clause. The Supreme Court of North Carolina ruled in Kaestner’s favor, holding that in-state residence was not enough grounds to tax the Trust.
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Gonzales v. City National Bank
Cite as B284521
Filed June 24, 2019
California Court of Appeal, Second District
Case Overview: Department of Health Care Services Entitled to reimbursement for Medi-Cal expenses.
Having suffered complications at birth, leaving her severely disabled, Brenda Gonzales received a $2.4 million settlement from a malpractice lawsuit instituted thereafter. Her settlement was irrevocably assigned to a special needs trust (“SNT”). The SNT was established by court order, pursuant to Probate Code Sections 3604 and 3605 (permitting the court to approve payment of settlements or judgments to special needs trusts established for minors or disabled persons). The SNT would terminate upon Brenda’s death. The SNT stated that its “intent and purpose…is to provide a discretionary, spendthrift trust, to supplement public resources and benefits when such resources and benefits are unavailable or insufficient to provide for the Special Needs of the Beneficiary [Brenda]…This is not a trust for the support of the Beneficiary [Brenda].” Furthermore, “no part of the principal or income of the trust shall be construed to be part of the Beneficiary’s estate.’”
After Brenda’s death, her parents, Josue Gonzales and Juanita Gonzales Garcia (Plaintiffs), requested that the remainder of her SNT be distributed to them, rather than to the Department of Health Care Services (Department) as reimbursement for Medi-Cal payments for their daughter’s medical care. The probate court denied their request and they appealed. The Appellate Court affirmed, stating that the probate court properly found the Department was entitled to reimbursement for these Medi-Cal expenses.
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Does Your Estate Plan Include Your Pets?
Have you considered your pet or pets when planning your estate? If not, you should, according to The Humane Society of the United States, the nation’s largest animal protection organization.
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Trusts, Estates & Probate Services Now Available in Indian Wells Office
With the expansion of SBEMP, Ms. Powers Smith will now provide Trusts, Estates & Probate services in the new Indian Wells office. The Indian Wells office is the newest addition to the firm, which has locations in Costa Mesa, Palm Springs, San Diego, and New York and New Jersey.
When is the Right Time to Get Your Estate Planning Affairs in Order?
The answer is, now. Whether it is because you have yet to do your estate plan or that your plan is needing updating due to the passage of time, change in laws, or life events such as marriage, divorce, incapacity, death, or the birth or adoption of a child.
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Estate Planning and Special Needs Speaking Engagements and On-Site Training.
SBEMP offers free speaking engagements and on-site check-ups on the topics of estate planning, special needs trusts, guardianships/ conservatorships, and special education. Contact SBEMP
to schedule a special engagement or on-site check-up for your group.
With locations in Palm Springs and Indian Wells, CA, New Jersey, NJ, and Manhattan, NY, SBEMP’S Trusts, Estates & Probate Department is comprised of attorneys with decades of experience in a broad range of issues from planning to administration to when incapacity or death occurs – all while using a mindful approach to identify a client’s special, business or litigation needs. SBEMP’S Special Needs & Elder Law Department has over twenty years of experience including the following highly specialized practice areas: health care insurance, short-term and long-term disability insurance, Medicaid, Medicare, special needs trusts, trust administration, estate planning & administration, guardianships and conservatorships, and accessing disability-based benefits.
DISCLAIMER: This newsletter does not constitute legal advice, and no attorney-client relationship is formed by reading it. This newsletter may be considered ATTORNEY ADVERTISING in some states. Prior results do not guarantee a similar outcome. Additional facts or future developments may affect subjects contained within this newsletter. Before acting or relying upon any information within this newsletter, seek the advice of an attorney.