No liability for breach of duty that has no damages; attorney fees denied for acts by trustee that were a breach of duty; fees are proper for beneficiary when litigation benefits the trust.

In re the Trust of the Charles W.J. Curry Trust dated June 5, 1991 as amended, and In re the Trust of the Phyllis A. Curry Trust dated June 5, 1991 as amended, Filed June 24, 2019; A18-1653; A18-1656; (Minn.App. 2019) See case here. Son was Trustee of husband’s and wife’s trust. Father died first and wife died years later. Wife changed her trust and beneficiary who did not benefit from the change alleged undue influence and that was denied. But beneficiary also argued that trustee breached his fiduciary on three counts: 1) a 5/5 power was not exercised by a signed writing as required by the trust document, 2) the trustee paid himself a fee when it appears the document did not allow that, and 3) the trustee paid accrued income from dad’s trust to mom’s trust after mom had died. The Court ordered repayment of the accrued income distribution and the trustee fees and awarded the trustee attorney fees but denied the beneficiary attorney fees. While the 5/5 power was not exercised in writing, there was no damage. The beneficiary was allowed to exercise the power and that lack of writing did not damage anyone. As for the other breaches, the court ordered repayment, so there were no damages to the beneficiary. The beneficiary was arguing that if there is a breach of fiduciary duty then there must be damages but that is not the case. Beneficiary failed to prove damages beyond the relief already ordered by the court. The court awarded the trustee attorney fees. But the trustee did cause damage and should not have fought the items that were breaches resulting in damage. Thus the court ordered review of the trustee’s fees to determine what amount should be awarded. As for the beneficiary, the litigation did result in money returned to the trust so this benefit to the trust merited an award of attorney fees, the amount to be determined on remand.

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About Robert McLeod

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