In the most recent installment of the McGuireWoods Fiduciary Advisory Services annual multipart series on recent fiduciary cases, developments in the law concerning various topics are examined through the following:
- In the Matter of Estate of Leon C. Chamberlain, 135 A.D.3d 1052 (N.Y. App. Div. Jan. 7, 2016) Modification of trust terms is appropriate where limitations on investments permitted under trust instrument frustrated the purposes of the trust, even though this circumstance was not necessarily “unforeseen” at the time of creation of the trust.
- Domino v. Braswell, 165 So.3d 530 (Miss. Ct. App. May 19, 2015) Filing of trust as public record triggers statute of limitations.
- In re Estate of Tigani, No. CV 7339-ML (Del. Ch. Ct. Feb. 12, 2016) A remainder beneficiary in default of exercise of testamentary limited power of appointment has standing regarding trust, and the donee of testamentary limited power of appointment may not remove the appointee’s standing by contracting to exercise that power during life.
- Queen v. Schmidt, No. CV 10-2017 (PLF), 2015 WL 5175712 (D.D.C. Sept. 3, 2015) Probate exception to federal jurisdiction does not apply where dispute involves a revocable trust, rather than a will.
- Estate of Zucker, 122 A.3d 1112 (Pa. Super. Ct. 2015) The exercise of a testamentary power of appointment in favor of certain descendants, to the exclusion of others, was proper under the terms of the trust instrument and the donee owed no duty of good faith to potential appointees.
- Gladden v. Cumberland Trust and Investment Company, 2016 WL 1166341 (Tenn. Ct. App., Mar. 24, 2016) Trustee cannot bind minor beneficiary to arbitration of future claims.
- United States v. Lazare, 2016 WL 1127627 (D. Nev. Mar. 4, 2016) Federal court rescinds transfer as fraudulent, and enjoins future transfers from irrevocable trust, but finds trustee is not personally liable.
- Berlinger v. Wells Fargo, N.A., 2016 WL 740521 (M.D. Fla., Feb. 25, 2016)
- Trupp v. Naughton, No. 320843, 2015 Mich. App. LEXIS 1114 (Ct. App. May 26, 2015) Court finds that the co-trustees triggered the termination provision of a trust through their actions.
- Kelly v. Orr, 243 Cal. App. 4th 940 (Jan. 11, 2016) Statute of limitations for professional negligence against an attorney for a trustee is tolled until the predecessor trustee’s attorney-client relationship is terminated.
- Estate of Gilliland, No. B262482, 2016 WL 109882 (Cal. Ct. App. Jan. 8, 2016) Trustee’s delay in distributing trust proceeds was not ruled a per se breach of fiduciary duty, even though trust value declined in the interim.
- McDevitt v. Wellin, 2016 WL 199626 (D.S.C., Jan. 15, 2016) Court holds that trustee and trust protector are not entitled to payment of fees or segregation of trust funds before final judgment.
- In re Estate of George Mathai (2014-482, NYLJ 1202716307504, at *1 (Surrogate’s Court, Jan. 7, 2015) Court addresses grounds for finding a potential administrator of an estate ineligible to administer the estate and evidentiary requirements and burdens of proof related thereto.
- U nited States v. Read, 2016 WL 310721 (D. Conn 2016) Trustee held liable for taxes after making distributions from trust while trust owed income tax.
- S chrage v. Seberger Living Trust, 2016 WL 914796 (Ct. App. Ind., March 10, 2016) When the beneficiary of a specific bequest under a trust agreement sought a complete, unredacted copy of the trust agreement from the trustee, the court held that income and remainder beneficiaries were entitled to receive complete copies of a trust agreement by statute but recipients of specific bequests were not.
- DeJohn v. Wheeler, 2016 WL 270033 (Ct. App. Cal., Jan. 21, 2016) Court finds that mother, as trustee of the trust, and family’s accountant, in his limited role as independent trustee of the trust, had not breached fiduciary duties owed to the daughter as beneficiary.
- Monschke v. Timber Ridge Assisted Living, LLC, 244 Cal.App.4th 583 (Jan. 29, 2016) Following decedent’s death, arbitration clause signed by agent under decedent’s power of attorney was not enforceable against personal representative of decedent’s estate, at least in the case of a wrongful death action which was brought on behalf of the decedent’s heirs, and not on behalf of the decedent’s estate.
- In the Matter of Ronald J. Mount 2012 Irrevocable Dynasty Trust U/A/D Dec. 5, 2012, C.A. No. 10991–VCN, 2016 WL 297655 (Del. Ch. Jan. 21, 2016) Delaware court denies motion to stay proceedings regarding Delaware trust pending the outcome of other litigation related to the settlor, the settlor’s estate, and other trusts of the settlor, citing various factors.
- Robert Rauschenberg Found. v. Grutman, No. 2D14-3794, 2016 WL 56456 (Fla. Dist. Ct. App. Jan. 6, 2016), reh’g denied (Feb. 24, 2016), review denied, No. SC16-502, 2016 WL 3185202 (Fla. June 8, 2016). In a proceeding regarding a Florida trust, the trial court properly determined trustees’ reasonable compensation based on various factors, and not based on a percentage of the trust assets or a lodestar method based on an hourly rate.
- Duckett v. Enomoto, No. CV-14-01771-PHX-NVW, 2016 WL 1554979 (D. Ariz. Apr. 18 2016). Following a thorough and fact-specific inquiry of the terms of the trust, state law, and relevant case law, the Court held that an IRS notice of levy attaches to the beneficiary’s interest in the trust despite the trustee’s discretion to make distributions, although the Court found that there was insufficient evidence to determine whether the trustee should pay over the funds to the IRS pursuant to the Notice of Levy.