Recent Cases of Interest to Fiduciaries: January 2019

January 7, 2019

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:

Lynch v. Barba, 2018 WL 1613834, C.A. No. 12083-MG (Del. Ch. Ct. 2018). Trustee is entitled to summary judgment when beneficiary cannot substantiate his breach of fiduciary duty allegations and has waited too long to file his lawsuit against the trustee.

Bullard v. Hoffman (In re Mayette E. Hoffman Living Trust U/A dated Aug. 4, 1997), 812 S.E.2d 401 (N.C. Ct. App. 2018). A trustee’s egregious conduct is not a prerequisite to awarding attorney’s fees under the UTC in a judicial proceeding involving the administration of a trust.

In re Estate of Forgey, 298 Neb. 865 (2018). The Nebraska Supreme Court awards damages and legal fees for a trustee’s failure to inform and report.

Morgan v. Superior Court of Orange County, 23 Cal. Rptr. 3d 647 (Cal. App. 2018). A California court holds that a predecessor trustee cannot assert the attorney-client privilege against a successor trustee and that any provision of a trust instrument seeking to do so violates public policy.

Carberry v. Kaltschmid, 2018 WL 2731898 (Cal. 2018). Trust protectors do not have a general right to information allowing them to compel trust accountings.

Estate of Lee, 2018 WL 2374116 (Texas 2018). The spendthrift provisions of a testamentary trust render invalid, for the purposes of a standing analysis, the terms of an agreement between former beneficiaries of the trust.

Rachins v. Minassian, 2018 WL 3387236 (Florida 2018). The remainder beneficiaries of a family trust are qualified beneficiaries under Florida law with standing to challenge a trust’s administration, even though they would receive their interests through newly created trusts.

EGW v. First Federal Savings Bank of Sheridan, 413 P.3d 106 (2018). Wyoming strongly adheres to the notion that, assuming he is legally competent to do so, a testator has the absolute right to dispose of his property as he sees fit at his death, and therefore, in terrorem clauses do not violate public policy even when an action challenging such a clause is brought in good faith or is based on probable cause. 

In re Estate of Burkhalter, 806 S.E.2d 875 (Ga. Ct. App. 2017). The probate court finding that the petitioners’ proposed declaratory judgment actions would not violate a will’s in terrorem clause was wrongfully decided because (1) a question regarding the validity of an in terrorem clause must be raised and resolved in the first declaratory judgment action raising that issue, and (2) the request for a declaration that a future petition to remove the executors would not violate the in terrorem clause lacked sufficient specificity for the trial court to make the required analysis that such a request would not be a violation of the in terrorem clause.

In the Matter of the Will of E. Warren Bradway, 2018 WL 3097060 (N.J. Sup. Ct. App. Div., June 25, 2018). New Jersey court admits to probate a codicil written entirely in the purported testator’s blood. 

Horgan v. Cosden, 2018 WL 2374443 (Fla. Dist. Ct. App. May 25, 2018), review denied, No. SC18-1112, 2018 WL 3650268 (Fla. July 30, 2018). Early termination of a trust can only occur for the best interest of the beneficiaries when viewed in the light of the settlor’s intentions.

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