Minassian v. Rachins: Appointment and Actions of Trust Protector Found Proper

In a recent Florida breach of fiduciary duty against a trustee, the settlor’s revocable trust continued after his death for the benefit of his widow, who was sole trustee and sole beneficiary during her life. At her death, separate shares for the settlor’s children were to be created from the remaining trust property. The children brought an action against the trustee claiming breach of fiduciary duty and the trustee moved to dismiss on the grounds that the children were not beneficiaries because the trust ended at her death and the children were beneficiaries only of the trusts to be created then.

The trial court denied the trustee’s motion on the grounds that the trust terms were ambiguous on the children’s status.  The trustee then appointed a trust protector under trust terms authorizing her to do so. The trust protector was authorized to amend the trust to correct ambiguities and drafting errors that defeat the settlor’s intent as determined by the trust protector. The protector then amended the trust to make it clear that the trust terminates on the widow’s death at which time new trusts are created for the children out of any remaining trust principal. The trial court granted the children’s motion to invalidate the amendments made by the trust protector.

In Minassian v. Rachins, the intermediate Florida appellate court reversed, holding, first, that the trust protector provision is valid because authorized by state law, and, second, the amendment did further the settlor’s intent as shown by extrinsic evidence including an affidavit by the trust protector who was the original drafter of the trust.

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