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In the past month, we have seen significant developments in estate planning, business law, elder law, and special needs law. We have highlighted the most noteworthy developments to ensure you and your firm stay informed of any changes. From court decisions rejecting a settlement proposal in a trust dispute, denying Medicaid benefits because the applicant did not apply for retirement benefits, and considering the enforceability of noncompetition covenants, read on to learn how these developments may impact your practice.
Estate Planning
Proposed Settlement That Disregarded Trustmaker’s Intentions Rejected
In re Stiny Trusts, No. 24-2008, 2026 WL 469357 (8th Cir. Feb. 19, 2026)
Mary Stiny and her husband, Elijah, created a trust holding approximately $12 million in assets. The trust’s terms provided that, when one of them died, the trust would be divided into a survivor’s trust and an exemption trust. After Elijah died, Mary amended the terms of the survivor’s trust. In her amendment, Mary made her mother, Della Moore, the beneficiary of a 2.66 percent interest, but provided that the gift would lapse if Della did not survive Mary. The survivor’s trust also contained an antilapse provision specifying that, except as otherwise provided, if a beneficiary predeceased Mary, the beneficiary’s share would be distributed to their living issue, or if no living issue, to the other trust beneficiaries. Della died in 2017, and Mary died in 2019.
The trustee filed a motion for approval of a proposed settlement of Della’s 2.66 percent interest, reflecting an agreement he had entered into with some of Della’s other descendants, who were not named beneficiaries, whereby Della’s 2.66 percent interest would pass to them. However, the district court denied the motion, holding that, under the terms of the survivor’s trust, Della’s share had lapsed because she had died before Mary and, under California law, Della’s lapsed share would transfer to the other named beneficiaries of the survivor’s trust. The court further held that the parties to the agreement were, in fact, proposing a modification that did not meet the requirements of California’s trust modification statute. The would-be beneficiaries, mainly Della’s other children, appealed.
The Eighth Circuit Court of Appeals rejected Della’s children’s argument that the settlement should be permitted because the survivor’s trust was ambiguous. The court noted that California law applied, and that under the California Probate Code, the intention of the transferor—in the present case, Mary—controls the legal effect of the dispositions made in the trust. In its de novo review of the interpretation of the survivor’s trust, the court found that it unambiguously provided that Della’s share lapsed if she died before Mary. The lapse triggered the California Probate Code’s provision for the distribution of failed transfers, Cal. Prob. Code § 21111(b), which provides that upon lapse, the share passes to the other beneficiaries in proportion to their other interest in the trust. Therefore, upon Della’s death, her share lapsed and passed to the other named beneficiaries of the survivor’s trust.
Della’s children argued that the survivor’s trust was ambiguous because it included an antilapse provision that applied if a beneficiary predeceased Mary. The court disagreed, holding that their interpretation ignored the language of the antilapse provision, which applied “except as otherwise provided.” In re Stiny Trusts, No. 24-2008, 2026 WL 469357, *3 (8th Cir. Feb. 19, 2026). The court found the children’s assertion of ambiguity was unreasonable because the survivor’s trust provided otherwise by unambiguously stating that the 2.66 percent share to Della would lapse if she died before Mary. Further, the court held that because Mary had expressly made no provision in the survivor’s trust for her son, John, and had not included any of her siblings as beneficiaries, Della’s children’s interpretation as the would-be beneficiaries—that Della’s share should be distributed to her living issue under the antilapse provision—disregarded Mary’s intentions as expressed in the trust instrument by providing them a portion of Della’s share.
The court also determined that the district court lacked authority to modify the survivor’s trust because the requirements for modifying a trust under Cal. Prob. Code § 15403 had not been met. First, all beneficiaries must consent to modifications. However, only two of the named beneficiaries had consented to the proposed settlement (which the court construed as a petition for modification), and none had joined in the motion for settlement approval. Second, the reasons that Della’s children provided for the modification, i.e., preserving family harmony, did not outweigh the need to accomplish the material purpose of the survivor’s trust, i.e., following Mary’s distributive intent.
As a result, the court affirmed the district court’s judgment.
Takeaways: All states have antilapse statutes; generally, they provide that if the beneficiary of a will or trust dies before the testator or trustmaker, the gift to the beneficiary passes to the deceased beneficiary’s descendants. However, it is important to note that antilapse statutes vary significantly by state, and some apply only to wills and not to trusts.
Further, antilapse statutes do not override the express intentions of the testator or trustmaker as set forth in their will or trust instrument. As a result, in cases such as In re Stiny Trusts, where the trustmaker expressly provided for the lapse of a gift if the beneficiary predeceased her, the intentions of the trustmaker govern the outcome. Further, as in In re Stiny Trusts, a will or trust may itself contain an antilapse provision that specifies the conditions under which a gift will not lapse.
Postnuptial Agreement Unenforceable Absent Full and Fair Disclosure of Assets
Crane v. Crane, No. A25A2209, 2026 WL 306951 (Ga. Ct. App. Feb. 5, 2026)
James and Kimberly Crane entered into a prenuptial agreement and married in 2005. They entered into a postnuptial agreement in 2014 to govern the distribution of their assets in the event of a divorce. The postnuptial agreement provided that neither of them would pay spousal support to the other in the event of divorce. The agreement did not include a financial disclosure form or a listing of their separate property.
In 2024, James filed for divorce and filed a motion to enforce the postnuptial agreement. Kimberly opposed the motion, arguing that James maintained exclusive control over their finances and that she did not know the value of James’s assets before executing the postnuptial agreement. At a hearing, Kimberly testified that she had little knowledge of their finances and that James alone managed their finances and had access to account information; James testified that he had discussed finances with Kimberly and that she had access to information.
The trial court granted James’ motion to enforce the postnuptial agreement. Kimberly filed an application for an interlocutory appeal, asserting that the trial court erred in finding that there was a full and fair disclosure of material facts when the postnuptial agreement was signed and that the agreement was invalid.
The Court of Appeals of Georgia reviewed the trial court’s ruling for abuse of discretion. The court relied upon Georgia Supreme Court precedent applying a three-part test to determine whether a postnuptial agreement is enforceable:
- Was the agreement obtained through fraud, duress, or mistake, or through misrepresentation or nondisclosure of material facts?
- Is the agreement unconscionable?
- Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?
Crane v. Crane, No. A25A2209, 2026 WL 306951, at *3 (Ga. Ct. App. Feb. 5, 2026). The court held that under the first prong of the test—the only one applicable in the present case—the party seeking to enforce the postnuptial agreement has the burden of showing that (1) there was a full and fair disclosure of the parties’ assets before execution of the postnuptial agreement and that (2) the party opposing enforcement executed it freely, voluntarily, and with full understanding of its terms after having an opportunity to consult with independent counsel. Under that prong, James had a duty to fully disclose to Kimberly the amount, character, and value of his material assets to ensure that she had intelligently waived her rights. The court ruled that this duty to disclose is particularly important when one party to the agreement purports to waive their right to alimony. In contrast, Kimberly did not have a duty to inquire or to investigate to obtain information about James’s assets from available sources.
The court found that, because no financial disclosures were made as part of the postnuptial agreement, and James provided only his testimony—and no independent evidence—that he had disclosed his income or assets to Kimberly before the execution of the postnuptial agreement in which Kimberly had waived her right to alimony, the trial court erred in granting James’s motion to enforce the agreement. The court noted that, in its ruling, the trial court had relied on Kimberly’s ability to access joint accounts, tax returns, and other documents and her general awareness of James’s investments; in doing so, the trial court had relieved James of his affirmative duty to fully and fairly disclose material facts and his burden of showing he had fulfilled that duty. The record was silent regarding James’s annual income, his retirement account balances, and his investments, and thus, he could not meet his burden of showing that Kimberly had entered into the postnuptial agreement with a full understanding of its terms. Accordingly, the court reversed, ruling that the trial court had abused its discretion in granting James’s motion to enforce the agreement.
Takeaway: Although Crane v. Crane addresses a postnuptial agreement in the context of the dissolution of a marriage, pre- and post-marital agreements are also often used in the estate planning context to alter, augment, or curtail the parties’ rights under state law if the marriage ends in death.
In general, in the context of marital agreements, written financial statements are not strictly required by statute; however, verbal disclosures must be highly specific to be enforceable. It is best practice to attach schedules of each party’s assets and liabilities to the marital agreement at the time of signing. This is a default provision of the Wealth Docx marital agreement template.
Elder Law and Special Needs Law
Medicaid Benefits Denied Because Applicant Delayed Applying for Social Security Retirement Benefits Without Good Cause
H.S. v. Ocean Cty. Bd. of Soc. Serv., No. A-0747-24, 2026 WL 453004 (N.J. Super Ct. App. Div. Feb. 18, 2026)
In February 2024, H.S. applied to Ocean County Board of Social Services (OCBSS) for benefits under New Jersey’s Aged, Blind, Disabled (ABD) Medicaid program. As a condition for eligibility for ABD Medicaid benefits under N.J. Admin. Code § 10:72-3.8, applicants are required to take all necessary steps to obtain all annuities, pensions, retirement, or disability benefits to which they are entitled unless they can show good cause for not doing so. In March 2024, OCBSS determined that H.S. was eligible for Social Security Retirement Income (SSRI) but had never applied for those benefits; as a result, it denied H.S.’s application.
H.S. requested a fair hearing. After considering documentary and testimonial evidence, the administrative law judge (ALJ) found that H.S. was eligible for SSRI but had elected to delay applying for it until she attained age 70 to obtain a higher monthly benefit. Because she had not obtained income to which she was entitled, Medicaid benefits were properly denied. The Division of Medical Assistance and Health Services (Division) adopted the ALJ’s decision, and H.S. appealed.
The New Jersey Superior Court, Appellate Division, reviewed the Division’s decision to determine whether it was arbitrary, capricious, or unreasonable. H.S. argued that the Division had improperly denied her application; she asserted that she had demonstrated good cause to delay obtaining SSRI because waiting two years would substantially increase her monthly benefit amount. She added that, even if she had not demonstrated good cause, she was still eligible for SSRI and thus had functionally fulfilled her obligations.
However, the Division stated that OCBSS generally understood good cause, although undefined in N.J. Admin. Code § 10:72-3.8, as circumstances beyond the applicant’s control—for example, administrative delays or incapacity—that prevent an applicant from obtaining benefits they are entitled to. The court found that the Division’s interpretation of good cause, which was consistent with other authorities and jurisdictions, was reasonable. Further, the court determined that H.S.’s choice to delay applying for SSRI was entirely within her control and amounted to a failure to meet the conditions required by New Jersey law to qualify for ABD Medicaid benefits.
Takeaways: As the court noted in H.S. v. Ocean Cty. Bd. of Soc. Serv., “Medicaid is intended to be a resource of last resort and is reserved for those who have demonstrated a financial or medical need for assistance.” No. A-0747-24, 2026 WL 453004, at *3 (N.J. Super Ct. App. Div. Feb. 18, 2026). As a result, to ensure that the Medicaid program is administered in a fiscally responsible manner to ensure that benefits are available to eligible participants, applicants must meet income and resource standards. Safeguards are in place to ensure that applicants are not denied Medicaid benefits if they have failed to obtain annuities, pensions, retirement, or disability benefits to which they are entitled because of circumstances beyond their control; however, in general, “individuals must pursue all available income sources as a condition of Medicaid eligibility, absent a true inability to do so.” Id. Although H.S. delayed applying for SSRI benefits to increase the monthly amount to which she would be entitled, this was a voluntary and deliberate decision rather than a true inability to obtain that source of income. As a result, she was not entitled to Medicaid benefits until after she had taken all necessary steps to obtain her SSRI benefits.
Daughter Who Claimed Ownership Interest in Mother’s Homes Liable for Undue Influence and Fraud
Knox v. Walker, No. 25A-CT-1022, 2026 WL 206832 (Ind. Ct. App. Jan. 27, 2026)
In 2018, Winnie Walker, an 81-year-old woman, moved to Oregon with her daughter, Jeri Knox, to care for Winnie’s sister, Juanita. Winnie and Juanita purchased a home for $375,000. The home was titled in Winnie’s name only because Juanita believed Winnie would live longer than she would and wanted Winnie to receive her assets. Winnie, Juanita, and Jeri lived together in the home, and Jeri kept track of their shared expenses on a spreadsheet. In February 2019, Winnie conveyed the home to her living trust. The following day, the three women signed a note of ownership prepared by Jeri, which provided that Jeri, Winnie (as trustee), and Juanita shared ownership of the home, with Jeri owning an 8.15 percent interest. In August 2019, Winnie executed a restated trust providing that the ownership of the home was subject to the note of ownership. Winnie executed a durable power of attorney appointing Jeri as her attorney in fact and authorizing Jeri to enter into real estate transactions on Winnie’s behalf.
In 2020, Juanita moved into an assisted living facility. Jeri prepared a second note of ownership, increasing her ownership interest in the home to 13.22 percent and reducing Juanita’s and the trust’s share. Jeri did not disclose the ownership interest she claimed in the home in her Indiana divorce proceedings, which occurred during the same time period. Jeri and Winnie obtained home equity lines of credit secured by the home to help Juanita pay for assisted living, based on Jeri’s calculations of what each owed Juanita for their interest in the home.
In 2022, with Jeri’s help, Winnie decided to move to Indiana, sold the Oregon home for $625,000, and paid off the remaining home equity line of credit. Winnie purchased a new home in Indiana and deposited the remaining proceeds, approximately $142,000, into her bank account. Based on Jeri’s representation that Jeri had owned 50 percent of the Oregon home, Winnie gave Jeri $71,000. Jeri handled the closing on the Indiana home without Winnie, executing a deed listing Jeri and Winnie’s living trust as tenants in common.
Winnie and Jeri moved into the home together, but their relationship soon deteriorated. Winnie decided to sell the Indiana home and learned at that time that Jeri asserted an undivided one-half interest in the home. Winnie moved out of the home, and Jeri remained in possession of it. In December 2022, Winnie filed an action to partition the property and later added claims for fraudulent misrepresentation, undue influence, and slander of title. The trial court ruled that Winnie had proven her claims and awarded her the proceeds from the sale of the Indiana home and a $71,000 money judgment, representing the amount Winnie had paid Jeri after the sale of the Oregon home. Jeri appealed.
The Indiana Court of Appeals found that substantial evidence supported the trial court’s ruling that a confidential relationship existed between Winnie and Jeri. Jeri did not dispute the trial court’s findings that she controlled the household finances and credited herself with equity in the Oregon home in lieu of being repaid by Winnie and Juanita for her purchases of groceries and household items based on a scheme to acquire equity in the home based on erroneous math. In addition, Jeri instructed Winnie to sign ownership documents that Winnie did not understand and made representations to Winnie designed to obtain interests in the Oregon and Indiana homes. Jeri asserted that Winnie was competent, that she had voluntarily executed the documents, and intended to recognize Jeri’s ownership interest, but the court declined to reconsider the evidence. Because of the confidential relationship, Jeri was required to rebut the presumption of undue influence. The court found that the evidence supported the trial court’s conclusion that Jeri had failed to rebut the presumption that the transactions resulted from her undue influence.
In addition, the court found that the trial court’s findings supported its conclusion that Jeri had committed fraud. She had made a material misrepresentation to Winnie that she had a 50 percent ownership interest in the Oregon home with knowledge or reckless ignorance of the falsity of such a claim. In addition, Winnie relied on Jeri’s representations to her financial detriment by giving Jeri $71,000 for half of the remaining proceeds from the sale of the Oregon home.
The court also ruled that the trial court’s findings supported its conclusion that Jeri had committed slander of title by making false, malicious statements regarding Winnie’s ownership of the homes that caused her pecuniary loss.
The court affirmed the judgment of the trial court.
Takeaways: As clients grow older, they become more vulnerable to undue influence and fraud, even by family members and caregivers. In Knox v. Walker, Jeri did not formally take on the role of a caregiver for Winnie, but she handled Winnie’s finances and was in a confidential relationship with her—a relationship she abused for her own benefit. A written caregiver agreement and careful documentation of financial transactions can reduce the risks of financial exploitation—and often reduce friction among family members—by clearly spelling out the caregiver’s duties and the compensation they are entitled to receive for the services they provide. Caregiver agreements may also be used in Medicaid and Veterans benefits planning to legitimize payments to a caregiver and reduce the assets or income of the person needing care to enable them to qualify for benefits.
Business Law
Delaware Supreme Court Rules on Enforceability of Noncompetition Covenants
North Am. Fire Ultimate Holdings, LP v. Doorly, No. 2024-0023, 2026 WL 274647 (Del. Feb. 3, 2026)
Alan Doorly, an employee of North American Fire Ultimate Holdings, LP (North American Fire), held North American Fire common units. When North American Fire reorganized its corporate structure, Alan exchanged his common units for class B units, which were subject to time- and performance-based vesting requirements pursuant to an Incentive Unit Grant Agreement (Agreement). The Agreement included restrictive covenants, including restrictions on his use of confidential information, and nonsolicitation and noncompetition covenants. Alan later formed a competing entity, and North American Fire terminated him for cause when it discovered his actions. Under the Agreement, Alan’s for-cause termination triggered forfeiture of his vested and unvested units. North American Fire filed an action against Alan, asserting several claims and seeking to enforce the restrictive covenants. The Delaware Court of Chancery dismissed North American Fire’s complaint, holding that the incentive units were the sole consideration for the restrictive covenants and that, because Alan had forfeited the units, the restrictive covenants were unenforceable for lack of consideration. North American Fire appealed.
The Delaware Supreme Court determined that consideration for a contract is measured at the time the contract is formed and is not reevaluated at the time of its enforcement. Although the value of the incentive units was somewhat contingent at the time the Agreement was formed, it was not illusory. Therefore, the court determined that the lower court had erred in ruling that the restrictive covenants were unenforceable because there was no consideration at the time of enforcement. Therefore, the court reversed the lower court’s judgment and remanded for further proceedings.
Fortiline, Inc. v. McCall, No. 300, 2025, 2026 WL 369934 (Del. Feb. 10, 2026)
On February 10, 2026, in a one-page opinion, the Delaware Supreme Court affirmed the ruling of the Court of Chancery in Fortiline, Inc. v. McCall for the reasons set forth in the Court of Chancery’s memorandum opinion (see Fortiline, Inc. v. McCall, 341 A.3d 1027 (Del. Ch. June 27, 2025)). The founder of Fortiline, Inc. (Fortiline), left and established a competing business, taking approximately one-half of Fortiline’s employees with him. The founder and many employees were subject to restrictive covenants in a stock option agreement that prohibited them from engaging in any competing business anywhere in the United States, or from assisting or investing in anyone who competed with Fortiline (and its affiliated companies) for one year after their employment terminated. They were also prohibited from soliciting customers, suppliers, and other employees of Fortiline.
Fortiline filed a lawsuit seeking a preliminary injunction restraining the defendants from competing with Fortiline and its affiliated companies, and from soliciting employees from them. The court determined that the restrictive covenants were unreasonably broad and unenforceable and refused to blue-pencil them to apply only to Fortiline and not to its affiliate companies.
Fortiline and its affiliates amended their complaint, seeking damages instead of injunctive relief for the defendants’ breaches of their restrictive covenants. The defendants filed a motion for summary judgment, asserting that the restrictive covenants were unenforceable. Fortiline argued that, where a claim for breach of restrictive covenant does not seek injunctive relief but only damages, it is not subject to a review for reasonableness, and it should instead be governed by recent decisions of the Delaware Supreme Court holding that forfeiture-for-competition provisions are not subject to a reasonableness review.
The court rejected their argument, noting that as a matter of public policy, Delaware upholds freedom of contract and enforces contracts as written. Relying on Cantor Fitzgerald, L.P. v. Ainslie, 312 A.3d 674 (Del. 2024), and LKQ Corp. v. Rutledge, No. 110, 2024, 2024 WL 5152746 (Del. 2024), the court noted that forfeiture-for-competition provisions do not prohibit competition but instead allow a former owner or employee to compete at the cost of giving up a contingent benefit, unlike restrictive covenants, which deprive the bound party of their livelihood in their chosen field and result in financial hardship. In the present case, the restrictive covenants prohibited competition, and their unenforceability was not altered by the fact that Fortiline and its affiliates had amended their complaint to change the remedy sought to damages rather than an injunction; the restrictive covenants were subject to review for reasonableness, regardless of the remedy sought. Because the court had already found them unreasonably overbroad and unenforceable, it ruled that the defendants were entitled to judgment as a matter of law and granted their motion for summary judgment.
Takeaways: An increasing number of states have enacted statutes restricting or banning the use of noncompetition agreements. Those that continue to permit the use of noncompetition agreements often subject them to a reasonableness review, as in Fortiline. Alternatives such as nondisclosure, nonsolicitation, or forfeiture-for-competition agreements that are not extreme in duration or financial hardship are more likely to be enforceable and may enable businesses to adequately protect their interests, especially in situations involving former owners or key employees.
As noted in North Am. Fire Ultimate Holdings, if a noncompetition covenant is supported by adequate consideration when executed, an employee may not take advantage of their termination for cause that triggered the forfeiture of the consideration to assert that the noncompetition covenant is unenforceable; whether a noncompetition agreement is supported by adequate consideration is measured at the time the agreement is formed rather than the time of enforcement.
New York’s Trapped at Work Act Amended
N.Y. Lab. Law art. 37, §§ 1050–1055
On December 19, 2025, New York’s Governor Kathy Hochul signed the Trapped at Work Act (the Act), which prohibits employers from requiring a worker as a condition of their employment to execute an employment promissory note or similar provision requiring the worker to pay the employer a sum of money as reimbursement for training if the worker leaves their employment before the passage of a stated period of time.
On February 13, 2026, Governor Hochul signed an amendment to the Act, making several important changes. The amendments changed the Act’s effective date from December 19, 2025, to December 19, 2026. In addition, the amendments narrowed the scope of the law, which originally applied to all workers, to apply only to employees.
The amended Act includes new exceptions, including an exception for agreements requiring employees to repay the employer for educational costs for a “transferable credential” if several conditions are met. Another notable new exception is included for agreements requiring the repayment of incentive compensation, for example, the repayment of a financial bonus, relocation assistance, and other incentives not related to education or training, where they are not tied to specific job performance, unless the employee was terminated for any reason other than misconduct or the duties or requirements of the job were misrepresented to the employee.
Takeaways: For a discussion of the original version of the Trapped at Work Act, see our January 2026 monthly update. The February 2026 amendments substantially limit the scope of the law and provide additional clarity to several provisions. In addition, the delayed effective date allows employers additional time to ensure compliance.
