The fiduciary litigation group at McGuireWoods LLP in Richmond, Virginia recently published its latest national survey of trust-related cases [click here]. Every one of these cases is a cautionary tale that — hopefully — will keep you and/or your client out of court in the first place (which is always the best kind of lawyering). Anyway, good stuff, well worth reading.
- French v. Wachovia Bank, N.A., 2011 U.S. Dist. LEXIS 72808 (E.D. Wisconsin 2011). Corporate trustee did not breach its duties by exchanging insurance policies for new policies obtained through its affiliate.
- Scanlan v. Eisenberg, et al., 2012 U.S. App. LEXIS 1112 (January 20, 2012). Seventh Circuit reverses district court decision that discretionary beneficiary lacked standing to bring surcharge claim for $200 million in investment losses from investment concentration.
- In the Matter of the Accounting by Frieda Tydings, As Trustee of the Ricki Singer Grantor Trust, 2011 NY Slip Op 51177U (Bronx County Surrogate’s Court, June 28, 2011). Surcharge of individual trustee for making interest-free loans to family members and giving trust profits to family-owned business in which trustee held an interest.
- In re: Alexander McFadden Testamentary Trust and George McFadden
Testamentary Trust, 2011 Phila. Ct. Com. Pl. LEXIS 320 (November 9, 2011). Trustees found not liable for investment losses during market collapse, but removed for withholding distributions, disclosing private information and failing to appoint required third trustee.
- Carlyle Investment Management LLC et al. v. Carlyle Capital Corporation Limited, 2011 U.S. Dist. LEXIS 85710 (Delaware, August 4, 2011). Forum selection clause in an investment management agreement is valid and enforceable.
- Wells Fargo Bank, N.A. v. Estate of Ruth Elaine Mansfield, 281 Neb. 693 (2011). Trustee did not abuse its discretion by decision to not pay expenses of beneficiary’s final illness where estate assets sufficient.
- Portico Management Group, LLC v. Harrison, 202 Cal. App. 4th 464 (Cal. App. 3d Dist. 2011). Trust assets not subject to arbitration award where award is not against co-trustees.
- Estate of Campana v. Comerica Bank & Trust, N.A., 2012 U.S. Dist. LEXIS 1490 (N.D. W. Va. 2012). Arbitration clause in agreement between investment advisor and trustees bars trust beneficiary’s suit against investment advisor.
- Smith v. Marez, 2011 N.C. App. LEXIS 2489 (N.C. Ct. App. 2011). Attempt to designate IRA benefits to pass pursuant to terms of will is invalid.
- Klingelhoefer v. Monif, et al., 2012 Neb. App. LEXIS 5 (January 17, 2012). Nebraska Supreme Court affirms decision that the terms of the trust holding an LLC interest, and not the LLC agreement, control the disposition of farmland held in the LLC.
- Hobbs et al. v. Legg Mason Investment Counsel & Trust Co., 2011 U.S. Dist. LEXIS 999 (N.D. Mississippi, January 5, 2011); Hobbs et al. v. Legg Mason Investment Counsel & Trust Co., 2011 U.S. Dist. LEXIS 7168 (January 25, 2011). Court refuses to dismiss claim that trustee was negligent in failing to inform beneficiaries about GST taxes owed on trust distributions, but dismissed claims that trustee had a duty to modify the trust to avoid the taxes.