Main Menu
Disgruntled Beneficiary's Strident Claims Rejected

In an unpublished Opinion rendered in late 2018 by the Court of Appeals of Minnesota, the Court rejected in their entirety the claims asserted by a grandchild of the Settlors of a 2007 Irrevocable Trust.  The grandchild, a minor acting through his father with no legal counsel, asserted a variety of strong claims against the Trustee of the Trust, a prominent bank.  The dispute arose after the Settlors made a decision to cease funding the Trust further after doing so for nine (9) years. 

Apparently all prior contributions to the Trust had been withdrawn by the beneficiaries equally, under their express withdrawal powers.  When the grandparents decided to stop funding the Trust, the grandchild’s parent filed suit alleging a variety of wrongdoing by the Trustee, including charges that the Trustee made improper Trust distributions, committed fraud in the administration of the Trust, and was somehow responsible for the grandparents’ decision not to continue funding the Trust.  The suit alleged that the Trustee failed to defend the grandchildren from abuse by the grandparents, conspired with the grandparents, improperly made a trust loan to the daughter, and inflicted emotional distress upon the beneficiaries by the way the Trustee administered the Trust. 

The Minnesota Court of Appeals upheld the decision of the lower Court rejecting all these claims.  Trust distributions had been made pursuant to the withdrawal powers exercised by the beneficiaries, not otherwise.  Further, that Court found that the Trustee had no responsibility for any alleged abusive behavior by the grandparents, and that the grandparents had no legal obligation to continue funding this Trust.  Nor had the Trustee somehow conspired with the grandparents regarding the Trust.  The Court found that a loan made by the Trust to the daughter of the Settlors of the Trust was expressly permitted under a beneficiary loan provision of the Trust.  Nothing approaching fraud or intentional infliction of emotional distress was found.

Increasingly, Trustees are beset by troubled beneficiaries and troubled families.  Such situations can engender disputes and litigation.  In the worst case, litigation can be misguided and of a harsh but frivolous nature, as in this suit.  In Re Weitzel Trust, 2018 WL 4201184.

RSS RSS Feed

Subscribe

Recent Posts

Categories

Contributors

Archives

Back to Page