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Division of Prior Settlement Proceeds Between Estate Beneficiaries Is Not Binding In Subsequent Distributions

In In re Estate of Dezotell, 2016 VT 14 (February 5, 2016), the Vermont Supreme Court reversed and remanded a decision regarding the division of settlement proceeds between the beneficiaries of an estate.

Issue: Beneficiaries appealed the division of a third settlement distribution by the estate, arguing that collateral estoppel prevented a different distribution than the two prior settlement distributions, and, alternatively, if it was not estopped, the trial court improperly excluded evidence about the proportion of the beneficiaries’ pecuniary injuries.

Holding: The Court held that collateral estoppel could not be applied because each of the three distribution petitions, filed in roughly five-year increments, presented a separate issue for the probate division. The probate division must determine the fair and equitable distribution according to the circumstances at the time of that distribution. Successive distributions may reflect entirely different equities depending on the ages, economic circumstances and needs of the beneficiaries at that time, the previous awards and the amount available for distribution. The Court also held that the lower court erred in not allowing certain beneficiaries to introduce additional evidence relevant to their loss, and so the Court reversed and remanded the case for further proceedings.

Dissent: Robinson, J., wrote a dissent, arguing that the determination of the proportion of the beneficiaries’ injuries was a question of fact, based on the same factors as the determination of the amount of wrongful death damages, and that that decision had preclusive effect on subsequent distributions.

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