Trust Disputes
When a person wants to set aside money, real estate or other property or assets for the benefit of a family member, charity or other person or entity, he or she may create a trust. Trusts are used for many reasons, including tax planning, creditor protection, estate planning, and control of distribution. There are many types of trusts, including revocable trusts, irrevocable trusts, family trusts, inter vivos trusts, insurance trusts, and charitable trusts. Disputes often arise between beneficiaries and trustees or between different beneficiaries. The types of disputes vary, including complaints regarding investment choices, self-dealing by the trustee, inadequate generation of income, preferential treatment of some beneficiaries over others, misappropriation of assets, mismanagement, fraud, poor tax planning and failure or refusal to account to trust beneficiaries. The lawyers at Gaslowitz Frankel LLC have years of experience representing trustees or beneficiaries when disputes arise.
Legal News & Firm Updates
Baker v. Merrill Lynch Trust Co. - Charitable bequest and the “cy pres” doctrine
Posted: March 23rd, 2009 by Gaslowitz Frankel LLC
A testator (person who executes a will) left the bulk of her estate to a trust. Under the terms of the trust, some assets were to be distributed to named heirs with most of the remainder of her estate to go to a foundation. However, the testator died before she actually established the foundation. Merrill Lynch, as trustee, filed a petition asking the trial court to apply the “cy pres” doctrine, which provides that if a charitable bequest or gift cannot be effected in the exact manner provided by the testator or donor, the court can exercise its power to fulfill the intention of the testator as closely as possible. The issue here was whether the testator actually had a charitable intent. The trial court ruled that since the language of the trust did not include the word charity or any mention of a charitable purpose, the assets should go to the heirs.
The Court of Appeals, however, noted that the term “foundation” was ambiguous, because it may be a charitable or non-charitable entity, and thus the trial court should have considered evidence outside the language of the trust to determine the testator’s intent. The matter was sent back to the trial court for reconsideration.
286 Ga. App. 767 (2007)
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