New Hampshire Court Upholds No Contest Clause, Beneficiary Owes $17 Million
A 2010 New Hampshire court case has dragged a successful real estate developer’s family through trying times—testing family bonds from all angles. On Aug. 18, 2010, Judge Gary R. Cassavecchia of the Hillsborough County Probate Court issued a ruling that has trusts and estates practitioners still talking. His lengthy ruling addresses the multiple complaints brought by Elizabeth Tamposi (Betty) against her brothers, Samuel A. Tamposi, Jr. (Sam, Jr.) and Stephen Tamposi (Steve) in their role as investment directors for a trust.
. . .
While the court’s upholding of the clause was surprising, even more shocking was the court’s determination that the forfeiture Betty had brought upon herself—based on the trust instrument wording—would occur “at the time that a person commenced or joined in proceedings to oppose the trust or any provision of the trust.” The court determined that Betty had been using trust provisions she wasn’t entitled to since 2007—when she began challenging the trust through the lawsuit. The impact of this ruling—which Betty is now appealing—would cause Betty to turn over her distributions from the trust (approximately $1.5 million a year) as well as the money spent on the purchase and renovations of her home. According to the Nashua Post, Betty could end up owing her siblings about $17 million.
While this case opens several issues for trust practitioners to ponder—including the wording of trust instruments as well as the extent of trust managers’ responsibilities—it’s good to learn from Betty’s mistakes.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.