Sex, lies and videotape in this Michigan probate litigation case decided a few days ago? Not really: there is sex between a wealthy man and his former lover and employee. No videotapes that I read about. Lots of $$$: a $200,000 check, a Comerica brokerage account, checking accounts…..But there are allegations and findings of fraud by the former girlfriend and concealing of assets, which smacks of lies. If you are the heir of a wealthy Palm Beach resident or retired business person who moved to Boca Raton, you should read this entire case….. Not just this blog commentary about Palm Beach probate or Palm Beach estate litigation. If you are a Palm Beach estate beneficiary, consider reading the whole case to get a flavor for how money can leave your rich father’s hands during the last years of his life and go into joint accounts and leave via checks. The link to the full opinion is at the end of this Palm Beach inheritance commentary. A former lover/girlfriend who dad continued to employ was put on joint bank accounts and a $850,000 brokerage account. The successor trustee and the personal representative of the estate sued her for undue influence. See, all these undue influence cases, probate disputes and cases of taking joint accounts don’t just happen in Palm Beach or Ft. Lauderdale.
- Mr. Byrne accumulated substantial wealth through his investments
- He had beer distributorships, real estate, and business ventures
- Marlene was his long-time business manager & “close personal friend” (whatever that means….read on…)
- Marlene & Mr. Byrne were apparently involved in an intimate relationship that ended in the 1970s
- After the affair, Marlene worked for Mr. Byrne
- She was given “substantial authority” over his finances
Former Lover Now Manager Given POA
- 1990s: Marlene has a power of attorney for Mr. Byrne
- They travelled together
- He bought expensive gifts for her……and other women
Difficult Relationship with His Daughter
- Mr. B was closed to Marlene’s daugther Cheryl and her husband John. They also had a daughter Adrienne
- How was Mr. B’s relationship with his own daugther, Kathleen? “difficult”
- Mr. B helped Kathleen and her husband buy a beer distributorship
Pre 2001 Trust: All to Marlene– then changes Trust for Daughter
- Before 2001, Byrne’s trust and will designatd Marlene as a residual beneficiary.
- 2001, Mr. B changes his estate plan to name his daughter as the residual beneficiary.
- Marlene got a residence free of estate tax
DEMENTIA
- 2002, Byrne suffered a fall
- brain bleeds
- surgery
- October 2002: neuropsychological evaluation : he had dementia
Guardianship Recommended but none created
- Many financial transactions that benefitted Marlene since then
- Since 1987: Marlene and Mr. B’s daughter were joint owners of checking account for now………
Marlene Writes Checks to Herself from Mr. B’s Checking Account
- Marlene issued several checks to herself from the joint account
- Including a check for $200,000 + for a condo
Mr. B Opens New Accounts for Him & Marlene !
- 2004: Mr. B and Marlene open 2 more joint checking accounts
- Marlene closes out the “old” checking account and deposits funds into the “new” checking accounts
- 2005: Marlene and Mr. B opened a joint brokerage account with Comerica
- $850,000 into this account
Meets with Estate Planning Lawyer: Develops Cancer & Dies
- Mr. B was also involved in other financial transactions
- He met with his estate planning lawyer
- December 2005: Mr. Byrne was diagnosed with esophageal cancer and died shortly thereafter
Successor Trustee Fires Marlene –she takes the joint accounts
- Northern Trust, as successor trustee and personal representative of the Byrne’s estate, terminated Marlene’s employment with Byrne’s businesses
- December 2005, Marlene closed the two joint checking accounts and the brokerage account and withdrew the remaining funds
Successor Trustee & Estate Personal Representative Sue Girlfriend Employee
- A probate lawsuit is filed by the successor trustee and the personal representative of Mr. B’s estate
- The trust and estate were trying to recover the funds taken from the joint accounts
Probate Litigation Trial
- Jury rejects the claim of undue influence by Marlene
- No undue influence
- No conversion of money
- No unjust enrichment
- Trustee loses undue influence lawsuit
- Estate loses joint account lawsuit but………
G’friend Breach Her Fiduciary Duties
- The court found that she breached her fiduciary duty to Mr. Byrne
- Made unauthorized appropriations (took money she shouldn’t have)
- Fraudulently concealed assets
- However, the trial court later granted her motion for a directed verdict and judgment notwithstanding the verdict (JNOV) on those claims
The trustee and estate appealed this probate lawsuit, but they lost.
Want to read the entire legal opinion from the Probate Court? Here it is: http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/COA/20140325_C307641_83_307641.OPN.PDF