Well, Theresa A. Roberts v. Denise H. Roberts (Division 2, May 15, 2012), is a nice little case for the Court to hand down a couple of days after Mother’s Day. Theresa Roberts is Denise Roberts’s mother. Theresa had appointed Denise to be the trustee of a revocable living trust Theresa created to provide for her own care.
I’m going to go out on a limb and say that Denise wasn’t the best choice for trustee. Denise took money out of the trust account to pay for her own property and to build a home. Then she put Theresa in an assisted living facility. When a court appointed a “guardian” to look after Theresa’s interests and to protect Theresa’s assets — a protection deemed necessary because of Theresa’s dementia — Denise promptly transferred property to her husband and other insiders for no consideration.
Theresa’s estate (through a representative) then sued Denise for breach of fiduciary and other duties. The trial court, in unchallenged findings of fact, determined that (a) Denise prevented others from communicating with her mother, (b) Denise made fraudulent transfers, and (c) Denise’s breaches warranted the imposition of an equitable lien on her property. Denise appealed.
The Court of Appeals had little trouble affirming the trial court’s decisions. According to the Court, Denise’s use of trust funds to build a home for herself did not provide a benefit to Theresa. And Denise did not “segregate the trust investment from her personal investment.” That was sufficient evidence to support the trial court’s findings regarding breach of duty. Moreover, Denise’s transfers violated the Uniform Fraudulent Transfer Act because, among other reasons, they were made to insiders for no consideration.
And lastly, the Court rejected Denise’s argument that the statutory homestead exemption saved her home from the trial court’s judgment. The homestead exemption does not apply “to equitable liens imposed when the homestead claimant purchases the homestead property with wrongfully obtained funds.”