Pennsylvania Fiduciary Litigation : Pennsylvania Trusts and Estates Lawyer & Expert Witness : Patti Spencer Law Firm : Fiduciary Litigation, Planning : Lancaster, Harrisburg, Philadelphia, Pennsylvania

Jury selection begins Monday March 30, 2009 for the trial of Anthony Marshall, Mrs. Astor's son.  The trial is expected to last two months.

As reported in the New York Times, "Prosecutors will argue that Mr. Marshall and Mr. Morrissey knew that Mrs. Astor, suffering from Alzheimer’s disease, had deteriorated mentally, but that they exploited her ailments to trick her into directing millions of dollars their way, according to the indictment and lawyers briefed on the case. A second change to Mrs. Astor’s will, executed in January 2004, which gave Mr. Marshall her estate outright, will be under the most scrutiny."

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We wrote earlier about the first Supreme Court ruling on Anna Nicole's estate here  regarding the so-called "probate exception" to federal jurisdiction.

Here we go again.

A writ has been filed before SCOTUS asking that " lawyers for the late Anna Nicole Smith be allowed to start collecting on $88 million awarded her by a Santa Ana judge from her husband’s estate."

See Gerry Beyer's post at Wills, Trusts & Estates Prof Blog discussing the writ.  Here is an excerpt:

"The writ, filed with the court [on March 9, 2009], asks in the alternative that the heirs of Smith's husband, Texas oil tycoon J. Howard Marshall, post a bond in that amount to assure that the money is there when when the legal battle concludes. * * *

However, David Margulies, who represents the heirs of J. Howard Marshall and his son, E. Pierce Marshall * * * denied the award by U.S. District Judge David Carter in 2002 is still valid.

Margulies said the 9th U.S. Circuit Court of Appeals threw out Carter's award, finding that he overstepped the jurisdiction of the Probate Court.

Even though the U.S. Supreme Court in 2006 found that Smith had the right to pursue a claim on her husband's estate, it did not uphold the $88 million award, Margulies said."

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Please read this excellent post by Juan Antunez at Florida Probate & Trust Litigation Blog:

Persuading a Cold Judge

Here is an excerpt:

"A defining characteristic of probate litigation is that your cases are decided by judges, no jury trials here. If your judge is prepared and understands the facts and law of your case, all is well. But when your judge is not prepared, or simply doesn't "get" it, he's what Denver, Colorado litigator Peter Bornstein refers to as a "cold" judge in Persuading a Cold Judge, an excellent article just published in the ABA's Litigation magazine. Here's how Bornstein frames the issue:"

And this is MOST interesting:

"So what's to be done? One option is to "privatize" contested probate proceedings to the extent possible by tapping into one of the many alternative-dispute-resolution tools available under Florida law [click here]."

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In September 2008 we wrote about John P. Karoly, Jr. the Allentown attorney who allegedly faked his brother's will.

Turns out there's more.   Read what the Taxgirl, Kelly Erb, has to say at Lawyer Fakes Will (Allegedly), Now Faces Tax Charges.

Here is an excerpt::

While Karoly fights the fake will charges, he has other charges brewing. He has also been accused of one count of mail fraud, three counts of failing to report taxable income on his federal income tax returns, one count of conspiracy to commit wire fraud, two counts of wire fraud, and six counts of money laundering charitable proceeds through a church.

Karoly allegedly failed to report more than $5 million in income for the years 2002, 2004 and 2005.

Karoly is also accused of claiming a charitable donation for a noncharitable contribution. In 2005, Karoly donated $500,000 to the nonprofit Lehigh Valley Community Foundation and took the deduction on his tax returns. He later asked that the money be transferred to the Urban Wilderness Foundation, which does not have tax-exempt status. The Urban Wilderness Foundation shared an address with Karoly’s law office, and Karoly had sole signature authority on the Urban Wilderness Foundation bank account.

No wonder they say that 99% of lawyers give the rest of us a bad name.

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In Brodsky Estate. (O.C. Div. Montg), 29 Fiduc. Rep. 2d 57, December 11, 2008, objections were made to an account of the agent, Brent Brodsky,after the principal's, Cecilia Brodsky's, death.  The agent was surcharged $210,000 for transferring funds to himself from an account in joint names between agent and principal.  The funds had been contributed solely by the principal.

This is an excerpt from the opinion written by Judge Ott:

"The accountant does not deny that the account from which he paid himself the $210,000 contained funds contributed only by his mother. That account was titled jointly between him and his mother. From this, he argues, because the money would have become his at her death by operation of law, his having taken the money during her lifetime is not a problem. He is wrong. Cecelia Brodsky was never adjudicated an incapacitated person. In the eyes of the law, she retained authority and control over her assets even after she gave her son a general durable power of attorney. Until the day she died, she could have emptied out the joint account and used the money for any purposes she wished. Her agent breached his fiduciary duty when he made the improper gifts to himself. Had he not exceeded his authority under the gift provisions of the power of attorney, he would, indeed, have been entitled to any balance that remained at his mother's death pursuant to 20 Pa. C.S.A. §6304(a). However, when he removed the $210,000 from the joint account during her lifetime, he severed the joint tenancy and thereby lost any right he would have had to the money as the surviving party on a multiple-party account. Accordingly, the accountant is hereby surcharged for this entire amount he paid himself plus interest at the rate of 6% per annum from December 15, 2000."

This agent did everything wrong. 

• Judge Ott also, in a separate proceeding, found that the accountant exercised undue influence over his mother, the principal, and this resulted in her executing a will leaving everything to him.   That will was invalidated and the principal's earlier will where the accountant would share equally in the estate with the children of his sister who predeceased their mother was valid.  One of these grandchildren, Steven Lichtenstein, is the administrator of the estate of the deceased principal and the objectant to the agents' accounting.

• At the hearing on the objections to the agent's account, the agent testified that he made gifts of $200,000 to himself, and four gifts of $10,000 each to himself, his wife, and his two sons. He made it clear that the purpose of these transfers was to spend down his mother's money so the government could "pick up the tab" for his mother's care.

• Judge Ott said "The accountant and his counsel seem to view this litigation as much ado about nothing. " 

• The final paragraph:  "Throughout the proceedings involving the instant account and the prior will contest, the accountant and his counsel have exhibited a pattern of obstreperous and dilatory behavior. As just the most recent examples of this conduct, we point to the filing of frivolous preliminary objections to the instant objections and a refusal to cooperate with discovery, including the failure to produce certain requested documents until the very day of the hearing. In light of such tactics, we find it necessary to take the unusual step of assessing counsel fees, under 42 Pa. C.S.A. §2503(7), against the accountant and/or his counsel, Philip J. Berg, Esquire. We will therefore schedule a hearing forthwith, limited to the reasonable fees incurred"

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Thank you to Grant Griffiths for his suggestion for this post.

We appreciate your visits to Pennsylvania Fiduciary Litigation.  While many of you are stopping by to read the new post we have published, you may be missing out on what else we have to offer.

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