Yellowstone and Estate Planning

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Spoiler Alert: All Law&Story webpages contain significant discussion of plot points for whatever program or movie they analyze.

Estate Planning in Yellowstone: In Season 1, we are introduced to the Dutton family. Jamie, one of John Dutton’s sons, is an attorney who handles legal matters that concern the ranch. During this season, he decides to run for Montana Attorney General. His campaign becomes problematic for John and the ranch after John is sued by various entities for trespassing on tribal land and moving the course of a river earlier in the season. Jamie is not present when John needs his legal help because Jamie is campaigning. John tells Jamie to drop out of the race so that he can handle the ranch’s legal problems. Jamie refuses, and the two come to physical blows. John has a meeting with Beth the next day. He asks if her company, which is located in Utah, has attorneys. She tells him that yes, they have attorneys on staff. He asks her to put the ranch into a trust and to make herself executor (he actually means trustee). When she asks who the beneficiary is, John doesn’t mention Kayce by name – he asks Beth, “Who do you think?” – but we learn it’s Kayce because John instructs Beth never to sell the ranch and to not let Kayce sell it either. John also tells her to take Jamie off the ranch’s payroll.

In Season 2, John brings Jamie back on board as the attorney for the ranch and also has him handle the ranch finances. We learn that Beth put the ranch in a trust as John instructed her to do in Season 1. Beth talked her company into buying land around the ranch as an investment, and we learn that in her role as trustee, she has been using money that belongs to the ranch in order to buy more property around the ranch. Jamie also finds out about the trust and that he is not included in it. He talks with Kayce via phone and learns that Kayce does not know about the trust nor that he is beneficiary. When Jamie tells Kayce that he is looking at his signature on the trust, Kayce tells him that he didn’t sign anything. Jamie is furious that Beth is using the ranch’s money, to the tune of $5 million, to invest in property because the ranch has not been profitable for 6 years. He tells her to get the money out of the investments and put it back into the ranch’s accounts. Beth is also using money from her company, with the company owner’s approval, to buy up property that borders the ranch.

In Season 3, we learn that Jamie is adopted. We also learn that, at some point, presumably before Beth had a trust drafted, Jamie was listed in a Power of Attorney as the person who could make legal decisions on John’s behalf.

Legal Information:  A trust is one way to ensure that your assets pass to the people and organizations you want to have them. A trust is similar to a will because it states how you want your assets disbursed when you die. It’s not public like a will, though, so only the person creating the trust and those people he or she tells about the trust know who the beneficiaries are and what the trust states. A person creates a trust while they are alive and appoints a trustee to manage it. There are also beneficiaries to the trust who receive the assets as listed in the trust. The trustee generally has a lot of power to handle the trust, depending what language is used in the trust to define those powers, but he or she can usually not change the beneficiaries or make any similar major changes to the trust unless the person creating the trust gives him or her the express authority in the trust to do so.

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Yellowstone Legal Questions and Answers Regarding Trusts:

Could Beth have her company’s attorneys draft the trust?

A company will sometimes have attorneys that employees can consult with and even hire to do basic legal work, including drafting a trust or will. However, in this situation, we have several problems. Attorneys are admitted to practice in a certain state. The ranch is located in Montana, and Beth’s company is located in Utah. One issue is whether the attorney at Beth’s company was familiar with Montana law concerning trusts and whether that attorney was licensed to practice law in Montana. We see this issue come up in Season 3 when the issue of a Power of Attorney (POA) supposedly drafted by Beth’s company becomes an issue. In addition, Beth does not own the ranch. John does. Any attorney would have to consult with John to create the trust unless Beth already had a POA and could act on John’s behalf. Even then, John really should have talked to an attorney to get the trust drafted rather than have Beth do it.

Why didn’t John use his own, local attorney?

We know that John has depended on Jamie for legal advice. We see in a flashback in Season 2, Episode 6 that John applies to Harvard for Jamie so that he can go onto law school because, according to John, “Lawyers are the swords of this century. Words are weapons now.” He tells Jamie that he can protect the ranch if he becomes an attorney. We also learned that John doesn’t respect attorneys. Presumably, this belief would cause him to only use Jamie as his attorney and then to ask Beth to deal with attorneys at her company. It would have been in John’s best interest to use a local attorney familiar with Montana law to make sure that Montana estate planning law was followed correctly. Doing so would have prevented the trouble with the POA in Season 3 and would have ensured that John’s trust was legally valid an enforceable.

Was it legal for Jamie to be left out of the trust?

Generally speaking, the creator of a trust has wide latitude concerning the beneficiaries in the trust. If he or she wants to leave someone out of the trust, that is his or her right because the assets belong to him or her. The beneficiaries don’t have a right to the property, even if they are related to the person creating the trust. Adopted children are considered on equal footing as biological children for estate planning, so Jamie had the same footing as Beth and Kayce. It is usually wise to state that someone is being left out of the estate plan so that the person doesn’t sue and argue that their absence from the estate plan was a mistake.

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Was Beth allowed to buy land with the ranch’s money?

John chose Beth to be the trustee. Usually the person who owns the assets is listed as the trustee. He or she names at least one person to take over as trustee after death. John didn’t do that in this case, though. He had Beth be the trustee from the beginning and doing so took away John’s ability to move assets. As the trustee, she was able to engage in any actions that were in the best interest of the trust. Many times, such actions will include the purchase or sale of real estate as well as the investment of money. She has a fiduciary duty to engage in conduct that does not endanger the trust or the assets that will flow to the beneficiaries. Any investments that are made must be done in a prudent manner and not be risky. If Beth invested the money in buying property outright that added value to the trust then her behavior might not violate her fiduciary duty. For example, does the property increase hay fields or pasture, thus helping the ranch and even adding value to it were it to ever be sold? That might be viewed as a wise investment. Does creating a buffer zone around the ranch so that no development is on its borders increase its value? That investment might be a little riskier although there are pros to not having a development right next to a working cattle ranch. Are her land purchases with the ranch’s money tied in with land her company bought? If so, that risk would seem to be higher than what a trustee should engage in because there is a risk that the trust would lose the investment and the property if Beth’s company is bought out, and she is fired.

 Did the trust give Beth the authority to sell the ranch? What about John, Jamie, and Kayce?

Once the ranch was placed in the trust, which is done by a deed being registered showing the trust as the owner, then John no longer had the ability to sell the ranch. Jamie had no power under the trust because he was not given any power under the trust. Kayce had power to sell the ranch but only after John died and the ranch was given to him as the sole beneficiary. A trust can’t last indefinitely. While John may want the ranch to stay in the family, Beth or Kayce both have the right to sell the ranch, whether it’s Beth in her role as trustee or Kayce as the beneficiary. Estate taxes and other issues may even necessitate the sale.

Is the trust valid since Kayce said he never signed it?

Generally speaking, a beneficiary does not sign a trust. The only people who sign a trust are the person creating the trust, sometimes the named trustee, and any witnesses to the signatures. So if this event happened in the real world, the beneficiary’s signature on the trust document would raise potential questions about who drafted the document and whether or not it was fraudulent at a very basic level. But…for the sake of argument, I’ll discuss the issues concerning Kayce’s signature as if it was required on the trust document. Kayce’s assertion that he never signed the trust document still throws into question the issue of the validity of the trust because a fraudulent signature on a legal document will usually make the document unenforceable. The question will probably wind up being whether Kayce sticks to that statement or changes his story based on Jamie’s behavior at the end of Season 3 when Jamie agrees to sell the ranch. If Kayce says that he, in fact, DID sign the trust, then the trust could be considered valid, which means Jamie did not have authority to sell the ranch.

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Does the POA (See Yellowstone and the Power of Attorney) or the trust control the situation in Season 3 when it comes to selling the ranch?

As long as the ranch has been deeded into the trust – meaning there is a recorded deed that the trust owns the ranch – the POA does not give Jamie the right to sell the ranch. The trust gives Beth the power to make any sale or forbid any sale of the ranch because she controls the assets in the trust, and that includes the ranch.

It’s going to be interesting to see how the show handles the trust and POA issue regarding the sale of the ranch in Season 4. Based on previous release dates, it looks like we will have to wait until summer of 2021 to find out. Once we know, I will write a follow-up post to this one.

Feel free to contact me if you have any questions or have a show you want to recommend for Law&Story analysis.

This article is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation.