In re Trusts for Stefanidis-Perez is a consolidated case involving two trusts in which the plaintiff is the beneficiary and the defendant (plaintiff’s mother) is the trustee. The plaintiff-beneficiary moved for partial summary judgment seeking to compel an accounting and seeking the removal of the defendant-trustee, and the defendant-trustee cross-moved for summary judgment for advice and direction regarding her right to withhold distributions pursuant to one of the trusts.
The plaintiff-beneficiary’s unopposed motion for an accounting was granted.
The plaintiff-beneficiary’s motion to remove her mother as trustee was based on the following alleged breaches of her fiduciary duty: self-dealing; imprudent investment; hostility toward the beneficiary; and the fact that the trustee had decanted $1.8 million from the one trust (which entitled the beneficiary to net income at age 22 and principal distributions beginning at age 30) into the second trust (in which the beneficiary had no access to income or principal, except at the discretion of the trustee, until age 65).
The court found that issues of fact prevented summary judgment on all other claimed breaches of fiduciary duty, but concluded that the trustee had not breached her fiduciary duty by decanting the funds from one trust to another.
Decanting is the distribution of trust property from one trust into another trust, “pursuant to the trustee’s authority to make distributions to, or for the benefit of, one or more beneficiaries.” Decanting can involve a partial distribution of trust property, or the entire principal of a trust. Although the court recognized that New Jersey does not have a state decanting statute, it found that our common law permits “a trustee who has the ability to distribute principal outright from a trust to or for a beneficiary may instead exercise such authority by distributing the assets in further trust for the beneficiary,” pursuant to Wiedenmayer v. Johnson. In the Stefanidis-Perez trust from which funds were decanted, although that trust did not expressly permit decanting, the court found that the trustee permissibly decanted because the trust gave her absolute discretion to invade principal.
With respect to the cross-motion seeking instructions and advice from the court, relying upon the Restatement (Second) of Trusts and Tannen v. Tannen, the court concluded that summary judgment was appropriate and that the trustee had authority to withhold mandatory distributions under the terms of the trust.
A copy of Stefanidis-Perez can be found here – In re Trusts for Stefanidis-Perez, Docket No. CP-248-14 (Essex County, March 22, 2016)
For additional information concerning estate planning and administration, visit: https://vanarellilaw.com/estate-planning-administration/
Categories
- Affordable Care Act
- Alzheimer's Disease
- Arbitration
- Attorney Ethics
- Attorneys Fees
- Beneficiary Designations
- Blog Roundup and Highlights
- Blogs and Blogging
- Care Facilities
- Caregivers
- Cemetery
- Collaborative Family Law
- Conservatorships
- Consumer Fraud
- Contempt
- Contracts
- Defamation
- Developmental Disabilities
- Discovery
- Discrimination Laws
- Doctrine of Probable Intent
- Domestic Violence
- Elder Abuse
- Elder Law
- Elective Share
- End-of-Life Decisions
- Estate Administration
- Estate Litigation
- Estate Planning
- Events
- Family Law
- Fiduciary
- Financial Exploitation of the Elderly
- Funeral
- Future of the Legal Profession
- Geriatric Care Managers
- Governmental or Public Benefit Programs
- Guardianship
- Health Issues
- Housing for the Elderly and Disabled
- In Remembrance
- Insolvent Estates
- Institutional Liens
- Insurance
- Interesting New Cases
- Intestacy
- Law Firm News
- Law Firm Videos
- Law Practice Management / Development
- Lawyers and Lawyering
- Legal Capacity or Competancy
- Legal Malpractice
- Legal Rights of the Disabled
- Liens
- Litigation
- Mediation
- Medicaid Appeals
- Medicaid Applications
- Medicaid Planning
- Annuities
- Care Contracts
- Divorce
- Estate Recovery
- Family Part Non-Dissolution Support Orders
- Gifts
- Life Estates
- Loan repayments
- MMMNA
- Promissory Notes
- Qualified Income Trusts
- Spousal Refusal
- Transfers For Reasons Other Than To Qualify For Medicaid
- Transfers to "Caregiver" Child(ren)
- Transfers to Disabled Adult Children
- Trusts
- Undue Hardship Provision
- Multiple-Party Deposit Account Act
- New Cases
- New Laws
- News Briefs
- Newsletters
- Non-Probate Assets
- Nursing Facility Litigation
- Personal Achievements and Awards
- Personal Injury Lawsuits
- Probate
- Punitive Damages
- Reconsideration
- Retirement Benefits
- Reverse Mortgages
- Section 8 Housing
- Settlement of Litigation
- Social Media
- Special Education
- Special Needs Planning
- Surrogate Decision-Making
- Taxation
- Technology
- Texting
- Top Ten
- Trials
- Trustees
- Uncategorized
- Veterans Benefits
- Web Sites and the Internet
- Webinar
- Writing Intended To Be A Will
Vanarelli & Li, LLC on Social Media