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David Prince Tips and Tales From the Litigation Trenches.

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Presentation on theme: "David Prince Tips and Tales From the Litigation Trenches."— Presentation transcript:

1 David Prince Tips and Tales From the Litigation Trenches

2 I. UPIA 2001 Minerals/Nat. Resrs., C.R.S Minerals/Nat. Resrs., C.R.S Was Percentage Depletion Method, e.g., 15% Principal and 85% IncomeWas Percentage Depletion Method, e.g., 15% Principal and 85% Income Now, 90/10 RuleNow, 90/10 Rule Impact: Imogene was getting $8,500 per month, now will get $1,000 per monthImpact: Imogene was getting $8,500 per month, now will get $1,000 per month

3 Amelioration Tools 421(4) Partial Opt Out, Natural Resource Rules Only421(4) Partial Opt Out, Natural Resource Rules Only 404 Power To Adjust404 Power To Adjust

4 421(4) Partial Opt Out Apply Old Allocation Rules To Old AssetsApply Old Allocation Rules To Old Assets New Assets Get New Allocation RulesNew Assets Get New Allocation Rules Only For Mineral/Nat. Resource AllocationOnly For Mineral/Nat. Resource Allocation Imogene Stays Stable At $8,500Imogene Stays Stable At $8,500 Randy Expected $9,000 Allocation, Gets Only Same Old $1,500Randy Expected $9,000 Allocation, Gets Only Same Old $1,500

5 404 Power To Adjust Statutory TriggersStatutory Triggers Boil Down To A Determination That The Trustee Is Unable To Fulfill Duty To Serve All BeneficiariesBoil Down To A Determination That The Trustee Is Unable To Fulfill Duty To Serve All Beneficiaries Limitation Of Potential ChallengesLimitation Of Potential Challenges Limitation Of LiabilityLimitation Of Liability

6 Reasoned Decision-Making, Remember Your A-C-D’s Benefits Paid On Calendar Year AnalysisBenefits Paid On Calendar Year Analysis Evaluate Performance Under New RulesEvaluate Performance Under New Rules Measure Against BenchmarkMeasure Against Benchmark Develop Guidelines For ResponseDevelop Guidelines For Response However, Evaluate Individual TrustHowever, Evaluate Individual Trust Communicate Intended Action/Inaction And Gain Protection Of 405 ShieldCommunicate Intended Action/Inaction And Gain Protection Of 405 Shield

7 II. Case Developments The Anxious HeirThe Anxious Heir

8 Green Valley Fin. v. Green, 994 P.2d 491 Son Convinces Mom and DadSon Convinces Mom and Dad No Tax Benefits, No MaintenanceNo Tax Benefits, No Maintenance Son Refuses to End TrustSon Refuses to End Trust Probate Court Jurisdiction?Probate Court Jurisdiction? Not a Business TrustNot a Business Trust

9 II. Case Developments The Anxious HeirThe Anxious Heir Estate ClaimsEstate Claims

10 Estate of Russo, 994 P.2d 491 Known, Out of State Health Care CreditorKnown, Out of State Health Care Creditor January DeathJanuary Death June Published Claims DeadlineJune Published Claims Deadline Creditor Learns of Death and Makes Claim in AugustCreditor Learns of Death and Makes Claim in August Claim DisallowedClaim Disallowed

11 Estate of Russo, 994 P.2d 491 Claim is Property InterestClaim is Property Interest Due Process Applies if State is Extinguishing Property InterestDue Process Applies if State is Extinguishing Property Interest PR Triggers Published Claim Deadline so State ActionPR Triggers Published Claim Deadline so State Action Due Process Requires Notice to Known or Reasonably Ascertainable CreditorsDue Process Requires Notice to Known or Reasonably Ascertainable Creditors

12 Alberico v. Health Management, 5 P.3d 967 Over $100k in Reimbursable MedicaidOver $100k in Reimbursable Medicaid Secured Creditor, Liens Attached Prior to DeathSecured Creditor, Liens Attached Prior to Death No Claim Filed on EstateNo Claim Filed on Estate Secured Creditors Need Not File Claim (Misleading Phrasing)Secured Creditors Need Not File Claim (Misleading Phrasing)

13 Estate of Ongaro, 998 P.2d 1097 Local Creditor Known to PR, Secured by Vehicle, Two DebtorsLocal Creditor Known to PR, Secured by Vehicle, Two Debtors Jan. Death, Publish June Claims DeadlineJan. Death, Publish June Claims Deadline Monthly Payments Continued by PRMonthly Payments Continued by PR Creditor Seizes Vehicle Upon Default, Learns of Death, Makes Claim Jan. +1Creditor Seizes Vehicle Upon Default, Learns of Death, Makes Claim Jan. +1 Claim DisallowedClaim Disallowed

14 Estate of Ongaro, 998 P.2d 1097 Unlike Russo, Bar is Statutory Deadline, Not Published DeadlineUnlike Russo, Bar is Statutory Deadline, Not Published Deadline Deadline is Self-ExecutingDeadline is Self-Executing No State Action, No Due Process ProtectionNo State Action, No Due Process Protection Action By PR Cannot Affect DeadlineAction By PR Cannot Affect Deadline Claim BarredClaim Barred Why No Demand Made?Why No Demand Made?

15 Claims Cases PR LessonsPR Lessons –Provide Direct Notice to Known or Reasonably Ascertainable –Pay Reasonable Claims Prior to One Year –Do Not Pay Past One Year Creditor LessonsCreditor Lessons –Always “Demand” Payment –Monitor Accounts –Investigate at Default

16 II. Case Developments The Anxious HeirThe Anxious Heir Estate ClaimsEstate Claims Trust/Estate Reimbursement of Attorney Fees/Litigation Expenses, In re Phipps, 713 P.2d 412Trust/Estate Reimbursement of Attorney Fees/Litigation Expenses, In re Phipps, 713 P.2d 412 Figuring on Foiling the Former Spouse, Marriage of BalansonFiguring on Foiling the Former Spouse, Marriage of Balanson

17 Balanson, 25 P.3d 28 Parents Create Inner Vivos Trust, Married Daughter is a Remainder BeneficiaryParents Create Inner Vivos Trust, Married Daughter is a Remainder Beneficiary At Divorce, Daughter’s Future Interest May Be Marital Property!At Divorce, Daughter’s Future Interest May Be Marital Property! Vested Interest Subject to Complete DefeasanceVested Interest Subject to Complete Defeasance

18 Balanson-Planning Strategies Nancy Crow Article, October Colo. Lawyer (page 131, not 135)Nancy Crow Article, October Colo. Lawyer (page 131, not 135) Avoid Vested InterestAvoid Vested Interest Discretionary Trust, Independent T’eeDiscretionary Trust, Independent T’ee Dynasty TrustDynasty Trust

19 III. Something Different

20 Trust Fee Inquiry Roy Ricks is Settlor CallingRoy Ricks is Settlor Calling Trust Holds Stock in Closely Held Corp, Reynolds & Wilson, Ltd., which is subject to Security Interest held by Dr. Hans RieckeTrust Holds Stock in Closely Held Corp, Reynolds & Wilson, Ltd., which is subject to Security Interest held by Dr. Hans Riecke Beneficiary is Ricks Family and Charles RomeoBeneficiary is Ricks Family and Charles Romeo Holds CO Land Subject to Lien by the Savings & Real Estate Investment BankHolds CO Land Subject to Lien by the Savings & Real Estate Investment Bank Receives Note Payments from the Refinery of the Southwest in Switzerland and Advanced Electronics Development CorporationReceives Note Payments from the Refinery of the Southwest in Switzerland and Advanced Electronics Development Corporation

21 Trust Fee Inquiry Pay Loan to Burt and Binny’s Ice Cream of KabulPay Loan to Burt and Binny’s Ice Cream of Kabul

22 Office of Foreign Asset Control Felony just to do Business with or Provide Services to Specially Designated Nationals (SDN’s)Felony just to do Business with or Provide Services to Specially Designated Nationals (SDN’s) Punishable by 30 yrs/$5 millionPunishable by 30 yrs/$5 million First Tier Banks Now UnavailableFirst Tier Banks Now Unavailable “Educational” Enforcement Action Likely“Educational” Enforcement Action Likely Co. Owes Employees Duty of ProtectionCo. Owes Employees Duty of Protection

23 Trust Fee Inquiry Bank of Afghanistan StockBank of Afghanistan Stock Sell to Avoid ImproprietySell to Avoid Impropriety “Money Laundering”“Money Laundering”

24 What To Do Screening SoftwareScreening Software Screen with ListScreen with List Risk of Combing Files for ProblemsRisk of Combing Files for Problems Get Attorney FirstGet Attorney First

25 David Prince Tips and Tales From the Litigation Trenches


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