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David Prince

Tips and Tales From the Litigation Trenches. Tips and Tales From the Litigation Trenches. David Prince. I. UPIA 2001. Minerals/Nat. Resrs., C.R.S. 15-14-4211 Was Percentage Depletion Method, e.g., 15% Principal and 85% Income Now, 90/10 Rule

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David Prince

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  1. Tips and TalesFrom the Litigation Trenches Tips and TalesFrom the Litigation Trenches David Prince

  2. I. UPIA 2001 • Minerals/Nat. Resrs., C.R.S. 15-14-4211 • Was Percentage Depletion Method,e.g., 15% Principal and 85% Income • Now, 90/10 Rule • Impact: 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 Only • 404 Power To Adjust

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

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

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

  7. II. Case Developments • The Anxious Heir

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

  9. II. Case Developments • The Anxious Heir • Estate Claims

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

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

  12. Alberico v. Health Management, 5 P.3d 967 • Over $100k in Reimbursable Medicaid • Secured Creditor, Liens Attached Prior to Death • No Claim Filed on Estate • 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 Debtors • Jan. Death, Publish June Claims Deadline • Monthly Payments Continued by PR • Creditor Seizes Vehicle Upon Default, Learns of Death, Makes Claim Jan. +1 • Claim Disallowed

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

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

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

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

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

  19. III. Something Different

  20. Trust Fee Inquiry • Roy Ricks is Settlor Calling • Trust 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 Romeo • Holds 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 Corporation

  21. Trust Fee Inquiry • Pay 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) • Punishable by 30 yrs/$5 million • First Tier Banks Now Unavailable • “Educational” Enforcement Action Likely • Co. Owes Employees Duty of Protection

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

  24. What To Do • www.compliancedesk.com • www.ustreas.gov/ofac • Screening Software • Screen with List • Risk of Combing Files for Problems • Get Attorney First

  25. Tips and TalesFrom the Litigation Trenches Tips and TalesFrom the Litigation Trenches David Prince

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