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Keywords

defendantfiduciarytrustfiduciary duty

defendanttrust

Related Cases

Mooney v. Northeast Bank & Trust Co., 377 A.2d 120

Facts

In December 1949, Frances Triplett established a revocable inter vivos trust, conveying her interest in two parcels of real estate to trustees. The trust directed that upon termination, the real estate interests would be conveyed to the remainderman, Ruth Dunning. After the death of the last life tenant in 1972, the trust principal was distributed to third-party defendants, leaving the guardian of Ruth Dunning with no distribution. The trust's real estate was sold prior to termination, and the proceeds were not reinvested.

In December 1949 Frances Triplett established a revocable inter vivos trust for the benefit of several family members.

Issue

Did the bank breach its fiduciary duty by distributing the trust principal without reinvesting the proceeds from the sale of real estate?

The issue of the proper distribution of the trust principal must be resolved by determining the settlor's intention.

Rule

The court determined that the settlor's intention must be analyzed through the entire trust instrument, and extrinsic evidence can only be considered if the language is ambiguous. The trustees were empowered to sell real estate without restrictions and were directed to convey interests in real estate that remained in the principal at the time of termination.

The trustees were empowered to 'sell and convey said real estate by appropriate deeds . . . .' The settlor placed no restrictions, within the instrument itself, on the trustees' exercise of the power to sell.

Analysis

The court found that the trust instrument clearly allowed the trustees to sell the real estate and did not require reinvestment of the proceeds. Since there was no real estate remaining in the principal at the time of the final distribution, the bank's distribution to the third parties was consistent with the trust's terms.

The distribution was correct according to the language used by the settlor.

Conclusion

The court ruled in favor of the bank, concluding that the distribution of the trust principal was correct according to the language of the trust instrument.

We find for the defendant in the original action and thus need not consider the third-party action.

Who won?

Defendant (Bank) prevailed because the court found that the distribution of the trust principal was in accordance with the trust instrument's provisions.

Judgment for defendant on original action; third party action dismissed.

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Related Cases

W.A.K., II ex rel. Karo v. Wachovia Bank, N.A., Not Reported in F.Supp.2d, 2010 WL 2976518

Plimpton v. Gerrard, 668 A.2d 882

Pratt v. Ferguson, 3 Cal.App.5th 102, 206 Cal.Rptr.3d 895, 16 Cal. Daily Op. Serv. 9905, 16 Cal. Daily Op. Serv. 9905, 2016 Daily Journal D.A.R. 9300

Rothwell v. Love, 241 S.W.2d 893

Powers v. Wilkinson, 399 Mass. 650, 506 N.E.2d 842, 55 USLW 2637