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Statute Of Limitations Barred Successor Trustee From Pursuing Claims Against Predecessor

October 3, 2013

Authors

Luke Lantta

Statute Of Limitations Barred Successor Trustee From Pursuing Claims Against Predecessor

October 3, 2013

by: Luke Lantta

To the extent that a successor trustee must pursue claims against the predecessor trustee, when does the clock start ticking for the successor to bring those claims?  The answer to that question likely ends up being state specific, but in Robert K. Ward Living Trust v. Peck, we get some guidance under North Carolina law, including some clarification on whether the “continuing wrong doctrine” applies to breach of trust claims against a trustee.

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Equity Will Not Interfere With Plain Language Of Trust Instrument And Trust Settlement Agreement

August 6, 2013

Authors

Luke Lantta

Equity Will Not Interfere With Plain Language Of Trust Instrument And Trust Settlement Agreement

August 6, 2013

by: Luke Lantta

Just how controlling is a trust instrument?  Even though a court may have the equitable power to modify a trust instrument or trust settlement agreement, the Court of Appeals of Michigan‘s opinion in In re George W. Scheer Inter-Vivos Trust reminds us of just how reluctant a court may be to allow equity to interfere with the plain language of a trust.

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Federal Court Orders Trustee To Provide A Trust Accounting

April 10, 2013

Authors

Luke Lantta

Federal Court Orders Trustee To Provide A Trust Accounting

April 10, 2013

by: Luke Lantta

We often see trust beneficiaries sue a trustee to compel an accounting of the trust’s receipts, disbursements and assets.  A court should start with the trust instrument to determine whether an accounting is required and, if so, to whom and what it should contain.  That’s what an Illinois federal court did in Drewry v. Keltz.

The trust instrument there required that “[e]ach Successor Trustee shall render an account of his/her receipts and disbursements and a statement of assets to each adult vested beneficiary.”  The plaintiffs were adult vested beneficiaries of the trust who had made requests for the successor trustee to provide an accounting, which the trustee did not provide.  The federal court ordered the trustee to provide the plaintiffs with an accounting of his receipts and disbursements on behalf of the trust and a

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Trustee Was Authorized To Convey – Not Distribute – Property To Estate Of Deceased Trust Beneficiary

March 19, 2013

Authors

Luke Lantta

Trustee Was Authorized To Convey – Not Distribute – Property To Estate Of Deceased Trust Beneficiary

March 19, 2013

by: Luke Lantta

Time to get into the weeds on the scope of a trustee‘s powers.  There are basically two sources of power for a trustee – the trust instrument and state law.  Where those two intersect, overlap, conflict, or diverge is where you will likely find the bulk of fiduciary litigation about trustee powers.

In Rendall v. Black, the Court of Appeals of Kentucky dug into both the trust instrument and Kentucky trust law to reverse a local circuit court’s ruling that declared a 1994 deed void ab initio based upon the language of a trust agreement.  In doing so, the appellate court got to differentiate between the trustee’s power to distribute income versus the trustee’s power to sell off the corpus of the trust.  And we saw a brief – and curious – appearance of the trust pursuit rule.

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What Can Happen When Some – But Not All – Beneficiaries Waive Their Interests In A Trust

February 25, 2013

Authors

Luke Lantta

What Can Happen When Some – But Not All – Beneficiaries Waive Their Interests In A Trust

February 25, 2013

by: Luke Lantta

There are reasons why trust beneficiaries may want to waive or disclaim their interests in a trust.  But, if multiple class members intend or agree to collectively waive their interests, they may want to make sure that each class member actually waives his or her interest.  Otherwise, as we recently saw in the Georgia Supreme Court’s decision in White v. Call, the holdouts may wind up with everything.

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All Trust Beneficiaries Were Necessary Parties To Litigation Over A No-Contest Clause In A Trust

February 18, 2013

Authors

Luke Lantta

All Trust Beneficiaries Were Necessary Parties To Litigation Over A No-Contest Clause In A Trust

February 18, 2013

by: Luke Lantta

We’ve previously looked at the question of who needs to be joined as a party to trust litigation.  In blogging about a petition for accounting in Illinois in which all trust beneficiaries were not named as parties, we said:

Failure to Join Necessary Parties.  Not all of the contingent trust beneficiaries were parties to the lawsuit.  If they were all joined to the lawsuit, the federal court would lack jurisdiction to hear the case because there would not have been diversity jurisdiction insofar as the suit wouldn’t have been between citizens of different states.  The Court, therefore, had to determine whether all trust beneficiaries were required to be parties to a lawsuit for an accounting.  By the very nature of the claim for an accounting, the other trust beneficiaries were not necessary parties.  First, complete relief could be accorded among the

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Cover Page Of Trust Instrument Contradicted Text Of Trust Instrument

October 5, 2012

Authors

Luke Lantta

Cover Page Of Trust Instrument Contradicted Text Of Trust Instrument

October 5, 2012

by: Luke Lantta

When updating a particular estate planning document, it’s a good idea to double check that all estate planning documents reflect the testator or grantor’s desired changes.  So, for example, if you update a will, then it’s good practice to double check that you update any corresponding or affected language in a related trust document.  And, if you’re in the habit of using cover pages for trust documents, it’s best to make sure that the cover page actually reflects the text of the trust instrument.

In In re Eleanor V. Mirek Trust (unpublished), Joanne Kloss contended that Eleanor V. Mirek intended that she be the successor trustee of Mirek’s revocable trust upon Mirek’s death.  The Michigan probate court that heard the case, however, found that Mirek intended for her nephew, Warren Kriskywicz, to serve as the successor trustee.

To reach this decision, the probate court had to

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Settlement Agreement Could Not Conflict With Trust Instrument

July 25, 2012

Authors

Luke Lantta

Settlement Agreement Could Not Conflict With Trust Instrument

July 25, 2012

by: Luke Lantta

A trustee‘s intent is an awfully important thing, but for some reason it often gets forgotten or ignored by courts, lawyers, and litigants.  An area in which the trustee’s intent and the four corners of the trust instrument may be most at risk is when the parties in trust litigation start hammering out a settlement agreement.  What deference is given the trust instrument when the parties settle trust litigation?

In In re the Matter of the Frank J. Rekucki, Sr. Revocable Trust under agreement dated September 8, 1997 (unpublished), the Court of Appeals of Minnesota answered that question under Minnesota law: a lot.

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Accounting Firm Not Required To Maintain Trust Records Or To Account For Financial Activities Of Trust

July 23, 2012

Authors

Luke Lantta

Accounting Firm Not Required To Maintain Trust Records Or To Account For Financial Activities Of Trust

July 23, 2012

by: Luke Lantta

Trustees aren’t always one-stop shops.  In some states, trustees can delegate certain investment decisions.  Also, most trust instruments allow trustees to hire people to help them perform certain activities, such as lawyers and accountants.  Occasionally, an aggrieved party sues these people hired to help the trustee.  In these circumstances, the question becomes what duty was owed by the person hired by the trustee.  That question can often be answered by figuring out what that person was hired to do for the trustee.

In Taylor v. Barberino, the Appellate Court of Connecticut recently considered that question as applied to an accounting firm.  A successor trustee sued an accounting firm that was engaged by the trusts to provide accounting services on the grounds that the accounting firm failed to accurately maintain records of the operation of the trusts and failed to properly account for the financial

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Do You Really Want Your Trust Instrument To Prohibit Judicial Modification?

February 15, 2012

Authors

Luke Lantta

Do You Really Want Your Trust Instrument To Prohibit Judicial Modification?

February 15, 2012

by: Luke Lantta

This week, let’s take a look at another case from Florida.  You see a lot of trust instruments that ‘require’ a “corporate co-trustee.”  There are a lot of good reasons why the grantor may have wanted a corporate co-trustee to serve with a family member, friend, or other co-trustee.

Then again, as time goes by, a corporate co-trustee may no longer make a lot of sense.  It could be that the trust has been substantially administered or that the corpus is so small that a corporate trustee’s fee schedule just doesn’t work.  That’s when the beneficiaries and trustees usually get together and go to court to have the trust modified to permit the corporate trustee’s resignation and have the trust modified either to allow a single trustee or to allow an individual to serve as co-trustee.  These things are often done by consent order, which the

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