Antenuptial Agreements, the Common Law and M.S. 519.11 is Examined

Minn. Stat. § 519.11 subd. 1 safe-harbor applies to nonmarital property in antenuptial agreements while the common law applies to marital property in antenuptial agreements. Kremer v. Kremer, __ N.W.2d __ (Minn. 2018), A15-2006, Filed May 30, 2018. Minn. Stat. § 519.11 subd. 1 provides that if there is (1) full and fair disclosure of the earnings and property of each party, and (2) the parties have had an opportunity to consult with legal counsel of their own choice, then the agreement satisfies the due process safe harbor as it applies to nonmarital property in the antenuptial agreement. If the safe harbor is not satisfied, the agreement as it applies to nonmarital property might still be valid under a common law analysis. But with regard to marital property, only the common law applies. The case of McKee-Johnson v. Johnson, 444 N.W.2d 259 (Minn. 1989) requires procedural fairness (equitably and fairly made which is the same as Minn. Stat. § 519.11 subd. 1 requirements) and substantive fairness (whether the agreement is unconscionable or oppressive). Also see In re Estate of Kinney, 733 N.W.2d 118 (Minn. 2007) which modified McKee-Johnson procedural fairness by applying the following 4 factor test: (1) whether there was fair and full disclosure of the parties’ assets; (2) whether the agreement was supported by adequate consideration; (3) whether both parties had knowledge of the material particulars of the agreement and how those provisions impacted the parties’ rights in the absence of the agreement; and (4) whether the agreement was procured by an abuse of fiduciary relations, undue influence, or duress. The ability to consult with independent counsel remains a relevant factor but is not determinative of fairness. The court specifically found that this common law test is NOT substantially similar to the Minn. Stat. § 519.11 subd. 1 procedural tests. With regard to establishing adequate consideration in factor (2), that is determined by examining the circumstances surrounding execution and enforcement of the antenuptial agreement to determine whether they were fair and equitable. The court has found in prior precedent that the agreement must provide for the financially disadvantaged spouse. Estate of Serbus, 324 N.W.2d 381 (Minn. 1982). The agreement must also be free from duress. The facts in this case show that the agreement did not satisfy the common law tests.

Posted in Ante Nuptial, Antenuptial, Uncategorized

2017-2018 Minnesota Case Law Update

The annual 2017 – 2018 Minnesota Case law update is located here at 2018 Minnesota Case Law Update.

Posted in Ante Nuptial, appeals, Attorney fees, attorney-client, Augmented Estate, Bond, case law, Case Law Update, Challenging Parentage, Children, Claims, Conservatorship, Election Against The Will, Elective Share, Equitable, Exempt Property, Financial Exploitation, Formal Probate, Good Faith Purchaser for value, Guardianship, Homestead Exemption, Informal Probate, Malpractice, Notice, Parentage, Personal Representative, Power of Attorney, Prince Estate, probate, Removal, Some Damage, Spousal Rights, Standing, Statute of Limitations, Strict Compliance, surcharge, trust, Uncategorized, Undue Influence, Vulnerable Adult

New Statute for Brokers to Fight Financial Exploitation Effective August 1, 2018

Minnesota has enacted a new statute Minn. Stat. chapter 45A to help fight financial exploitation of persons 65 or older and persons considered vulnerable under the vulnerable adult act (M.S. 626.5572, subd. 21).

An important feature of this statute is that it allows the broker-dealer or investment adviser to take action under the statute without liability. The broker-dealer or adviser may notify third parties of the suspected financial abuse. The notice can be made to persons associated with the account holder and to elder abuse authorities and the commissioner of commerce, but they do not need to give notice to the person suspected of the abuse.

The broker-dealer and adviser may also delay the completion of the financial transaction requested. If the transaction is delayed, then within two days the broker-dealer or investment adviser must give written notice to all person associated with the account (except the alleged wrong-doer) of the hold on the account and the reason for the hold, notify the commissioner of commerce of the delay, and give notice to the common entry point for vulnerable adult financial exploitation (626.5572 subd. 5) and provide documentation and updates of any internal review.

The delayed transaction terminates 15 days after the transaction was first delayed but may be extended another 10 days to a total of 25 days in some cases.

Posted in Financial Exploitation, Uncategorized, Vulnerable Adult

The attorney-client relationship dies with the client (attorneys can’t appeal for a dead client but the personal representative may be able to appeal).

Billy Richard Glaze v. State of Minnesota, ___ N.W.2d ___, (Minn. 2018); A16-2028, filed March 21, 2018. The client was convicted of first degree murder and second degree intentional murder during sexual assaults in 1989. In 2007 the client petitioned to get DNA testing that was not available back in 2009. When DNA testing was done he sought post-conviction motions based upon the results. The client died before evidentiary hearings and other proceedings could be heard. His attorneys tried to pursue the matter to clear the client’s name. The court found the attorneys had no standing as they were not the parties to the case, their client was the party. The personal representative of client’s estate also tried to substitute in but was not officially substituted in on time for this particular appeal. It seems this court would allow the personal representative to appeal but the personal representative was not the actual appellant. It should be noted that the Guardianship of Tschumy, 853 N.W.2d 728 (Minn. 2014) allowed an appeal for a deceased ward but the issue revolved around the guardian’s rights and duties and not the deceased ward’s rights and duties per se. A narrow distinction but significant to this court. The attorneys were the appellants and lacked standing because they were not harmed and had nothing to appeal.

Posted in appeals, attorney-client, case law, probate, trust

The court can enforce an equitable bond in a conservatorship surcharge matter.

In re the Guardianship and Conservatorship of Helen Vikla, Conservatee, A17-0449, Filed March 12, 2018 (MN.App. 2018). Estate Resources, Inc. (ERI) is a now defunct professional conservator that (to put it charitably) breached its fiduciary duty to many of its clients. ERI was first made emergency guardian and conservator of the ward/protected person. ERI filed a bond for the emergency guardianship and conservatorship. ERI was later made general guardian and conservator but never actually filed a new bond in the matter. Although ERI never filed a new bond, the bonding company continued to receive payments on the bond while the ward was alive and after she died while matters were contested. So it sure seemed like a bond was present. During the course of litigation the court eventually ordered ERI and the bonding company to pay $44,143.75 in damages. The bonding company paid the damages and the accounts were finally allowed and discharges were issued. The bonding company appealed arguing that the court was without authority to create an equitable bond. While the court agreed that as a technical legal point, there was no bond in the general conservatorship, the bonding company could not point to any law to prohibit imposition of the bond in equity. Conservatorship courts apply both law and equity. See Minn. Stat. § 524.5-103. The court followed the precedent of Alwes v. Hartford Life and Acc. Ins. Co., 372 N.W.2d 376 379-80 (Minn.App. 1985) for the equitable authority to impose the equitable bond The Alwes court applies a six factor test to apply in equity and the factors all applied in the case. The equitable bond was upheld. The objectors in this matter raised several other issues primarily arguing that they had more objections and that the accounts should stay open. But the court of appeals found that the district court carefully reviewed the objections, that they were all heard, that the objectors had actual or constructive notice of all proceedings and that keeping the matters open is not necessary and the district court properly closed the matter.

Posted in Bond, Conservatorship, Equitable, Guardianship, surcharge, Uncategorized

Minn. Stat. 524.3-804/806 Petition to Allow Disallowed Claim Must be Filed in Two Months

In the Matter of the Estate of: Prince Rogers Nelson, Decedent, A17-0927 filed March 5, 2017 (Minn.App. 2018). Prince died on April 21, 2016. A Florida law firm filed a claim for an amount of just shy of $600,000. The claim was for services rendered dating back to 2007 and filed 5 months after his death by sending a certified letter to the special administrator. On October 27, 2016 the law firm received a notice of disallowance that stated “Your claim will be barred unless you file a petition for allowance with the Court or commence a proceeding against the Special Administrator no later than two months after the mailing of this notice to you.” On December 6, 2016 the law firm filed a claim with the district court. The law firm finally filed a petition for allowance of the claim on February 8, 2017. The law firm did not petition to extend the time to file the claim and did not file the petition to allow the claim within the 2 month time limit. The claim was denied as untimely.

Posted in 524.3-804, 524.3-806, Attorney fees, Claims, probate, Statute of Limitations, Uncategorized

A Personal Representative Can be Removed by Petition in a Formal or informal Probate. Minn. Stat. § 524.3-611.

In re the Estate of: Duane Francis Strub, Deceased, __ N.W.2d ___, (Minn.Ct.App. 2018). The probate registrar appointed two persons as personal representative of the estate in an informal proceeding. After an estate beneficiary became frustrated with the conduct of the personal representatives, the beneficiary filed a formal petition to remove the personal representatives. The court removed the personal representatives and ordered the parties to find a new personal representative that would tend to some specific administration issues. The removed personal representatives appealed. They argued that the court lacked jurisdiction to remove the personal representative if there was not a formal probate. They cite to Minn. Stat. § 524.3-302 that formal testacy proceedings are needed to alter an informal probate. But the court points out that there is a difference between testacy proceedings and appointment proceedings and in this case they sought an order to alter an appointment, not a probate. Therefore under Section 3-301 an informal probate appointment can be modified by a formal proceeding. Also, Minn. Stat. § 524.3-611 does not make any distinction between formal and informal proceedings so a petition under that section to remove a personal representative may be invoked for any acting personal representative, formal or informal. In summary, the statutes requiring a formal probate to formally probate a will does not apply to the removal of a personal representative. The personal representative removal action may be accomplished by petition for a formal or informal probate.

Posted in 524.3-611, Formal Probate, Informal Probate, Personal Representative, Removal, Uncategorized