Articles Posted in Estate Planning

Published on: April 20, 2021

Rhode Island Supreme Court Denies Trust Beneficiary an Accounting of Trust Assets

Rhode Island state law allows for the formation of various trusts and similar instruments in order for a person or organization (the settlor) to place their assets under the protection or control of another (a trustee) for the benefit of some person or organization (the beneficiary). Trusts are often designed to benefit one party until their death, upon which the trust assets are distributed to other beneficiaries and the trust is ultimately dissolved. The Rhode Island Supreme Court recently resolved a dispute concerning the management and distribution of a trust between a beneficiary of a trust and a trustee who had been managing the assets.

The plaintiff in the recently decided case was a beneficiary of a trust that was created by a woman who named the defendant as a trustee. Upon the death of the settlor, the defendant complied with the terms of the trust, paying out certain bequests to the beneficiaries of the trust (including the plaintiff), and then dividing the remaining assets among the other trustees as required by the trust agreement.

The plaintiff, who was also the administrator of the settlor’s estate, believed that the trust may have been mismanaged or improperly distributed, and requested a detailed accounting of the trust, as well as a detailed and onerous accounting of the defendant’s personal finances. The defendant refused the plaintiff’s request, maintaining that they had managed and distributed the trust properly and that they had no obligation to provide the plaintiff with the requested information. The plaintiff then took the defendant to court.

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Published on: March 5, 2021

Rhode Island Supreme Court Reverses Termination of Joint Tenancy After Plaintiff’s Death

By Bilodeau Capalbo, LLC

Common law doctrines that apply to property ownership often create strict rules for how the ownership is determined after the death of a co-tenant. One such doctrine is the right of survivorship, which automatically transfers the interest of a deceased joint tenant to the other joint tenants, instead of to the deceased’s own heirs through a will or the intestate process. A recent decision by the Rhode Island Supreme Court demonstrates that the right of survivorship, as well as other common law doctrines applicable to property ownership, may be abrogated by legislative action in some circumstances. It also illustrates how these issues can come into existence.

The plaintiff in the recently decided case is the estate of a woman who held property with the defendants as joint tenants. Prior to the woman’s death, she initiated an action to sever the joint tenancy, which, if completed, would have reverted the parties’ interests on the property to tenants in common, allowing the woman’s heirs to assume ownership of her share of the property upon her death.

While the plaintiff’s partition action was pending, she passed away, and the defendants attempted to dismiss her action, arguing that her interest in the property automatically transferred to them upon her death as a result of the parties sharing ownership of the property as joint tenants. The Superior Court granted the defendant’s motion without hearing from the plaintiff’s estate, and the plaintiff’s heirs lost their interest in the property.

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Published on: February 17, 2021

Rhode Island Supreme Court Reject Plaintiffs’ Claim to Property in Estate Dispute

By Bilodeau Capalbo, LLC

After the death of a family member, the division of the property from their estate can often result in complicated and drawn-out legal battles between parties who believe they are entitled to some of the proceeds from the estate. Although a clear and valid will helps heirs and the courts determine who deserves ownership of assets after a decedent passes away, things can be complicated by agreements, promises, and contracts that are not discussed in the will itself. The Rhode Island Supreme Court recently ruled for the defendants in a case filed by plaintiffs who believed they had an ownership interest in a piece of property that was tied up in the estate process.

The plaintiffs in the recently decided case were the children of a woman who died while living at a home in 2012. The home was owned by the woman’s brother, who is the defendant in the case. According to the facts discussed in the appellate opinion, the plaintiffs were under the impression that their mother owned 50% of the property at the time of her death, and argued that although her ownership was not recorded in an official capacity, that the defendant had acknowledged and promised to her that her children would receive half of the value of the property upon her death.

When the plaintiffs made a claim to their mother’s estate for their presumed share of the property, the defendant responded by stating that he owned the entire property, as it was conveyed to him by his and the decedent’s mother before her death. Reviewing the public records, the probate court determined that the property was solely owned by the defendant, and that the plaintiffs had no claim to the home. The plaintiffs then sued the defendant in the Providence County Superior Court, alleging that the defendant had made an enforceable promise to their mother to hold the property in trust for their benefit, that they were entitled to one half of the value of the property, and requested that the court order the sale of the property and award them what was due.

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Published on: September 8, 2020

How Strategic Medicaid Planning Can Help Rhode Island Residents Deal with the Cost of Long-Term Care

By Bilodeau Capalbo, LLC

The cost of elder care in the United States, and New England in particular, could bankrupt many families in a matter of months without financial planning and the help of government assistance. If an older person is in need of long-term care services in Rhode Island, approval for Medicaid can save them and their family hundreds of thousands of dollars. However, Medicaid eligibility can be complicated to understand and eligibility challenging to obtain. For this reason, many people seek the help of financial or legal professionals to structure their assets in a way to both secure Medicaid eligibility and protect their assets from encumbrance or sale.

In order for someone to be eligible for Medicaid assistance, their countable assets and income must fall below a certain threshold. Legal professionals can assist their clients by creating trusts and using other estate planning strategies to meet the asset and income thresholds and secure Medicaid eligibility. In the vast majority of cases, the cost of Medicaid planning will be substantially less than the amount of money saved by securing Medicaid eligibility to cover long-term care expenses.

Depending on a Medicaid applicant’s marital status, the value of a primary home may or may not be counted toward the Medicaid eligibility cap. If one spouse does not need long term care, a marital home will not be counted toward the asset limit; however, the federal government may be able to place a lien on a property and recoup some of the assistance from the spouse’s estate down the line. Couples seeking to protect their estate for children or other heirs, as well as single homeowners in need of long term care, may be able to create certain types of trusts to keep their home from being counted or taken by the government while still maintaining Medicaid eligibility.

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