28th Jul 2016
In August 2014, Anderson Larson Saunders & Klaassen, p.l.l.p. prevailed in a Probate Trial. Anderson Larson represented members of the Estate who alleged that the Personal Representative of the Estate had breached the Personal Representative’s fiduciary duties by mismanaging the Estate, conducting an impermissible sale of Estate property, and engaging in transactions in which the Personal Representative had a conflict of interest. The Trial Court agreed with the position of Anderson Larson, and held that the sale of Estate property for substantially less than the fair market value of the property was improper, and that the Personal Representative’s sale of the property to his son/business partner constituted a conflict of interest. Thus, the Trial Court removed the Personal Representative from his position and declared the prior sale of the Estate property void.
Earlier this month, the Court of Appeals of Minnesota affirmed the decision of the Trial Court following the submission of written and oral arguments from Anderson Larson and opposing counsel. See In re the Estate of Mae Anderson, No. A15-1513 (Minn. Ct. App. July 5, 2016). In reaching this decision, the Appellate Court noted, “A personal representative has a duty ‘to settle and distribute the estate’ in accordance with the will ‘and as expeditiously and efficiently as is consistent with the best interests of the estate.’” Based upon the Personal Representative’s sale of the Estate property for less than $1 million of the fair market value of the property, as well as the acknowledgement of the Personal Representative that he accepted a low bid, the Appellate Court agreed that the Personal Representative “failed to observe the required standard of care . . . [and] breached his fiduciary duty as Personal Representative.”
Additionally, the Appellate Court explained that “[a] transaction ‘which is affected by a substantial conflict of interest on the part of the Personal Representative is voidable by any person interested in the Estate . . . unless a will or contract entered into by the decedent authorized the transaction.’” Due to the fact that the decedent’s will did not authorize the Personal Representative to sell the Estate property to the Personal Representative’s son/business partner for less than the fair market value of the property, the Appellate Court held that the Personal Representative engaged in an impermissible transaction.
Based upon the decision of the Appellate Court, Anderson Larson’s successful outcome at the Probate Trial was upheld.