New Case on Trustees as Sole Beneficiaries

In some cases, complying with trustterms governing the withdrawal of assets is not necessary for a trustee who isalso the sole beneficiary. 

After the death of her husband, hiswife became sole trustee and sole beneficiary for her life of the trust createdby her husband.  The trust terms gave the trustee the authority to pay thewife “so much of the trust principal, even to its complete exhaustion” as shemight request in writing to the trustee.  

Before her death, she withdrew allof the trust property, and after her death several remainder beneficiaries ofthe trust sued her estate on the grounds that she had violated her fiduciaryduty by withdrawing all of the trust property without first making a writtenrequest to herself as trustee.  The trial court granted summary judgmentto the estate and a divided intermediate appellate court affirmed, holding thatthe trust terms allowed her to withdraw all of the trust property and thatrequiring her to make a written request to herself for the withdrawal would berequiring the performance of a vain act contrary to law.  Scanlon v.Scanlon, Nos. 99028 & 99052, 2013 WL 3328266 (Ohio Ct. App. June 27, 2013).

Special thanks to William LaPiana (Professor of Law, New York LawSchool) for bringing this case to my attention.