Inspection by the trial court of premises in encroachment proceedings

In this decision, the Oklahoma Court of Civil Appeals weighs in on whether a trial court can examine the premises as part of events trial on encroachment issues. The trial court's conduct was challenged on the basis that the court relied too much on its own observations. This objection was overcome by the court's reliance upon witness testimony, squaring that testimony with the court's own observation, and the parties' knowledge of and consent to the inspection.

https://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=487316

Lawyer as trustee

Lawyers should use caution if asked to serve as trustee of a client's trust.  Listen to this podcast, or call me for more information.

https://youtu.be/PKwVyBj1lwY

Marrying into Elder Abuse

Understanding IRAs and IRA Beneficiaries | The American College of Trust...

Understanding IRAs and IRA Beneficiaries | The American College of Trust...

Oklahoma legislative developments, 2018

Here is a report on trust & estate related legislation introduced in the current session. 

            1.         SB1018 would enact the Oklahoma Decanting Act.  Drafted by a group of Oklahoma attorneys who practice in the area of trust law, this act is modeled on a similar statute in Texas, but modified to fit the particulars of Oklahoma laws and jurisprudence regarding trusts – such as being protective of beneficiaries.  I participated in its drafting.  Sen. Julie Daniels is the bill’s author.  The bill has been referred to the Senate Judiciary Committee.

            2.         SB1064 is part of the efforts of the same group of Oklahoma attorneys.  This bill would require that the meaning and effect of the terms of a trust be determined by the law of the jurisdiction designated in the terms of the trust or by the law of the jurisdiction where the trust is administered in the absence of a controlling designation in the terms of the trust.  Sen. Daniels is the bill’s author.  The bill is referred to the Senate Judiciary Committee.

            3.         SB1505 is part of the efforts of the same group of Oklahoma attorneys.  This bill would enact the Oklahoma Non-Judicial Transfer of Trust Act, allowing for transfers of trusts to other jurisdictions under certain conditions and with certain types of notice.  Sen. Daniels is the bill’s author.  The bill is assigned to the Senate Judiciary Committee.

            4.         SB1003 would enact the Uniform Fiduciary Access to Digital Access Act.  I have not yet reviewed to determine (i) whether it incorporates the revisions adopted by the Uniform Laws Commission when it approved the Revised Uniform Fiduciary Access to Digital Access Act and (ii) whether it properly integrates with Oklahoma laws regarding fiduciaries.  When this proposal was last introduced, it had some errors, including reference to the wrong Oklahoma statutes governing guardians, because of other states’ use of the term conservator to refer to a guardian of the property.  This bill is assigned to the Senate Judiciary Committee.  Based on past experience, I do not anticipate that this bill will survive the committee.

            5.         HB3534 would create a status-based presumption of undue influence in cases of transfers to a caregiver with values exceeding $20,000.  Rep. Chad Caldwell is the bill’s author.  The bill is assigned to the House Judiciary Committee.

            6.         SB1046, SB1135, and SB1322 would each require background checks for guardians of minors, amending 30 O.S. 2-101.  I have not reviewed them to determine how they overlap.  I suspect that one of these bills will be passed and become law, given that whoever is pushing it has reached out to three separate senators for sponsorship.

The latest news in trust and estate law...

New decision from the Oklahoma Supreme Court: Felony DUI is an infamous crime that disqualifies a person from serving as Executor of an Estate. 

http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=481750

Legislative update coming soon.  Watch this blog.

Thanks.

Jim

Varying standards for undue influence

Enjoying some academic pursuits during a weekend sandwiched between court appearances ....  From the summary of substantive committee meetings for the upcoming ACTEC Fall 2017 conference:

States’ Varied Approaches to the Presumption of Undue Influence: With regard to undue influence, Oklahoma generally follows the approach now outlined in 2 Restatement (Third) of Property – Wills and Other Donative Transfers § 8.3 cmts. e-h (2003). This approach includes the presumption of undue influence upon a finding of (i) active assistance in securing the testamentary instrument by (ii) a per-son in a close and confidential relationship with the testator. Id. cmt. f. See also Blair v. Richardson, 2016 OK 96, 381 P.3d 717 (setting forth the Oklahoma Supreme Court’s most recent reiteration of the elements needed for the presumption of undue influence). In 2015, Oklahoma trust and estate litigators collectively held their breath after introduction of House Bill 1149, which would have (i) eliminated burden-shifting on issues of the validity of testamentary instruments and (ii) mandated strict en-forcement of in-terrorem clauses. The proposal was largely gutted by amendment as it made its way through the legislature, and was eventually vetoed by the governor. This turn of events gives rise the question that James C. Milton will address in this presentation: Whether and to what extent other states depart from the presumption of undue influence through legislation or common law.

Former trustee of charitable trust has standing to bring trust action challenging his removal

"As a former trustee whose trustee status was revoked by Respondents, Zink was certainly affected by the administration of the Trust estate. Further, according to Zink, the land owned and managed by the Trust contains Zink's grandfather's grave site and residence, as well as other improvements. We fail to see how the trial court could conclude that Zink is not a person affected by the administration of the Trust. Zink has standing to bring his claims."

http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=481609

Milton and Kelley publish follow-up article on summary judgment standards in Oklahoma ....

... addressing the right to trial and summary judgment in probate proceedings.

"In the October 2013 issue of this journal, James C. Milton and Travis G. Cushman wrote that, 'without much fanfare,' in Shamblin v. Beasley, the Oklahoma Supreme Court 'identified a state constitutional right to trial in equitable actions.' This was an important pronouncement for attorneys handling matters in probate and other equitable proceedings."

Read more at:

http://www.okbar.org/members/BarJournal/archive2017/SeptemberArchive2017/OBJ8824MiltonKelley.aspx

New decision on standing in trust litigation actions

"As a former trustee whose trustee status was revoked by Respondents, Zink was certainly affected by the administration of the Trust estate. Further, according to Zink, the land owned and managed by the Trust contains Zink's grandfather's grave site and residence, as well as other improvements. We fail to see how the trial court could conclude that Zink is not a person affected by the administration of the Trust. Zink has standing to bring his claims."

http://www.oscn.net/applications/oscn/deliverdocument.asp?citeid=481609

Investing guardianship assets

HB1243, signed by the governor in May, will amend Section 4-709 of the Oklahoma Guardianship and Conservatorship Act, which governs the investment of guardianship assets.

When originally enacted in 1923, Section 4-709’s precursor placed draconian limitations on types of investments. The ward’s assets could be invested in well-secured real estate mortgages, bonds, or the stock issued by building and loan associations.

In 1968, the statute was amended to allow banks and trust companies to invest guardianship assets under the prudent-man rule. Based on common law, this rule had its limitations. A fiduciary governed by the prudent-man rule could be held liable for losses in a single investment, even if the overall portfolio did well.

In 1995, the Legislature adopted the Uniform Prudent Investor Act, or UPIA, to replace the prudent-man rule. The UPIA uses a portfolio approach and favors diversification of investments. Section 4-709 was amended in 1995 to refer to the UPIA as the new standard for banks and trust companies investing guardianship assets.

Unless they retain a bank or trust company as agent, individual guardians are still governed by the 1923 investment rules – with only a few modest updates. That changes with HB 1243.

But rather than extending the UPIA to individual guardians, HB 1243 allows individual guardians to avoid the old 1923 investment rules by employing both a registered investment adviser representative and a certified financial planner. Under the rules governing their professions, both registered investment adviser representatives and certified financial planners owe their clients fiduciary duties. When investing guardianship assets, they will be required to ensure that the investments are in their clients’ best interests.

The new law will create some uncertainty for guardians. The ultimate investment decision appears to remain with the guardian. The new provision does not expressly require the guardian to follow the advice of investment professionals. In making investment decisions, it is unclear whether the guardian will be held to a standard of “prudent man” or “prudent investor.”

The new law is also silent on whether guardians may enter into investment agreements containing arbitration provisions. In Freeman v. Prudential Securities, decided in 1993, the Oklahoma Supreme Court affirmed an order denying a motion to compel arbitration in a dispute between a conservator and an investment company, but left open the issue of whether a guardian or conservator can enter contracts containing arbitration provisions that might limit the District Court’s jurisdiction.

http://journalrecord.com/2017/05/03/gavel-to-gavel-investing-guardianship-assets/

New decision on 20 OS 95.10

The Oklahoma Supreme Court holds that 20 OS 95.10 does not require judicial disqualification upon appellate reversal and remand.  The statute is not allowed to usurp the courts' superintending control of judicial assignments.

"Mere reversal of a lower court's dispositive rulings will not, standing alone, provide a sufficient basis to warrant disqualification."

http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=479768

Homestead held in deceased spouse's pre-marriage revocable living trust remains protected from the other spouse's forced share

The Oklahoma Court of Civil Appeals recently held that a residence held by the deceased spouse's pre-marriage revocable living trust could become the surviving spouse's homestead, subject to her homestead rights under 84 O.S. 44.  An attempted transfer of the homestead to a third party without the surviving spouse's consent or waiver would be invalid.  But even if the surviving spouse held a homestead interest in the property, the deceased spouse's pre-marriage revocable living trust would not be treated as joint industry property and, therefore, would not be subject to the surviving spouse's forced share under 84 O.S. 44(B)(1), as it was amended in 1985.  Estate of Eagleton, 2017 OK CIV APP 2, ___ P.3d ___ (mandate issued).

Termination of adult adoptions is allowed in Oklahoma

http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=479753

New decision on probate court jurisdiction

The Oklahoma Supreme Court has ruled that an Oklahoma probate court holds jurisdiction to require a probate estate's personal representative to make certain elections on an estate tax return.

http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=479749