Sarah Stanley//September 30, 2014
Sarah Stanley//September 30, 2014//
A Henrico Circuit Court orders two sisters acting as trustees of their mother’s trust to reimburse the trust for their legal fees in successfully defending a separate defamation action filed by their brother, a trust beneficiary; because of conflict among the siblings, the court appoints a conservator for the mother, as the sisters have withdrawn their objection, and orders the mother’s estate to pay the brother’s attorney’s fees in filing the present action.
The mother is the grantor and beneficiary of a trust agreement dated April 29, 2010. She has three adult children and several grandchildren. Petitioner is her son. Defendants are her daughters and have served as trustees for their mother. The trust provides that upon the death of the mother the remainder will be distributed to her three children and the son’s share will be reduced by any money he still owes the mother.
Petitioner claims the trustee should reimburse the trust for certain money it paid to a lawyer and also claims his sisters should pay his attorney’s fees and costs in this action, pursuant to the Uniform Trust Code § 64.2-795. In the alternative, he asks the mother’s estate to pay his attorney’s fees and costs under Code § 64.2-2008.
In a separate action in 2011, the brother sued his two sisters claiming defamation. In 2012, the case was tried to a jury, which returned a defense verdict. One sister used trust property to pay their lawyer $48,254.20 for attorney’s fees and costs, and used trust property to pay $14,391.80 to the other sister to cover fees she paid to the same lawyer.
The trustees’ defense is that their mother and her attorney advised them to take this action. They also argue that any issue respecting the propriety of paying the lawyer be addressed in another pending case in which a commissioner in chancery is examining whether the trustees owe money to the trust.
At the time of the payments to the sisters’ lawyer, the children were adverse in a number of respects, which interfered with their legal duties. The trustees owed a particular duty to their brother, because all three children have an interest in any trust property that remains after their mother’s death. The trustees had a duty to preserve the trust property for both the beneficiary, the mother and the remainder men. This dovetails with the general duty of a trustee to serve impartially. The payments to the lawyer appear to infringe on the remainder interests, and to show favoritism. The trustees will have to repay these funds to the trust.
The fees of the lawyer for the brother are reasonable. He had to prepare the petition, ascertain the medical evidence of incapacity, obtain and examine the payments made by the trustees, and prepare for a trial. All of this was opposed vigorously until June 30, 2014. The court will award petitioner his fees of $33,364. The principal reason for a new trustee was lack of cooperation among the three siblings. No one person can be held responsible for this. The fees should be paid from the mother’s estate under Va. Code § 64.2-2008.
Trimmer v. Savage (Hammond) No. CL 13-2894, July 8, 2014; Henrico Cir.Ct.; Thomas G. Haskins, Amanda J. Foster, Kimberly A. Pinchbeck, Frank G. Uvanni, Taylor N. Pape for the parties. VLW 014-8-083, 3 pp.