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Estate – Beneficiary Death

By: Derek Hawkins//February 15, 2018//

Estate – Beneficiary Death

By: Derek Hawkins//February 15, 2018//

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7th Circuit Court of Appeals

Case Name: National Foundation for Special Needs Integrity, Inc., v. Devon Reese

Case No.: 17-1817

Officials: RIPPLE, SYKES, and HAMILTON, Circuit Judges.

Focus: Estate – Beneficiary Death

In this case, we apply Indiana law to a trust agreement to determine who receives the remainder funds upon the beneficiary’s death. Plaintiff National Foundation for Special Needs Integrity signed an agreement with Theresa Givens establishing a trust that the Foundation was to manage for her benefit while she lived. In the agreement, Givens named herself as the only contingent remainder beneficiary. Givens died just a month after funding the trust, leaving more than $234,000 in the trust.

The district court rejected the Estate’s arguments, finding that the trust agreement is unambiguous and that the Estate’s evidence does not warrant any equitable remedy. The court also found that the equitable defense of laches would bar the Estate’s equitable theories. We reverse. We find that the trust agreement is ambiguous on the key question. Beyond the document, the overwhelming weight of evidence shows that Givens intended that any remaining assets pass to her children as the beneficiaries of her Estate rather than to the Foundation. We therefore remand and direct entry of judgment for the Estate, without reaching the equitable theories or the laches defense. On remand the district court will need to award damages and prejudgment interest in favor of the Estate.

Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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