Wills and trusts: Son’s suit against stepmother is reinstated

Where the decedent’s son alleged his stepmother took steps that were inconsistent with trust terms, the circuit court erred when it dismissed the suit.

Background                                                         

James Craig Kelly appeals the trial court’s judgment finding that he lacked standing to pursue a breach of fiduciary duty claim against his stepmother Vicky Kelly, who was the surviving trustee of a trust established by Vicky and her husband, Craig’s biological father, James C. “Buddy” Kelly. Craig alleged that Vicky breached her fiduciary duty to him and other blood relatives of Buddy by taking certain actions that disinherited Buddy’s blood relatives from trust property that they were originally entitled to under the terms of the trust.

Analysis

The trial court sustained Vicky’s plea in bar, finding that Craig lacked standing under Code § 64.2-753(A) because, at the time he brought his claim, Vicky was still alive and the trust was revocable. On appeal, Craig argues that, upon Buddy’s death, the trust became irrevocable as to Buddy’s separate share of the trust property and thus the trial court erred in concluding that he lacked standing to pursue his claim. The court agrees.

Section 9.03’s mandate that “the surviving Grantor may not amend the terms of the separate share” necessarily entails that Buddy’s separate share—which was a sub-trust of the Marital Trust and a sub-sub-trust of the entire Trust—became irrevocable after the administration period under Article Six and the disposition of Buddy’s tangible personal property under Article Seven.

Once Buddy’s Trust property was transferred into the separate share of the Marital Trust under Articles Eight and Nine, that separate share became irrevocable, pursuant to § 9.03. Accordingly, Craig had standing under Code § 64.2-753(A) at this point—and did at the time he initially brought it—to pursue his claim against Vicky.

It is true that, under § 9.03 of the First Restatement, Vicky had the broad authority to “distribute as much of the principal and accumulated income of the separate share to the main share of the Marital Trust” as she desired, and § 9.02 gave Vicky “the absolute right to amend the Marital Trust’s terms.” There is nothing inherent in these powers, however, that fundamentally alters or supersedes the language in § 9.03 plainly indicating that Buddy’s separate share was irrevocable.

This point is further bolstered when considering the language of § 6.02, which states that the entire trust becomes irrevocable during the period of distribution of the deceased Grantor’s separate trust property, and § 9.03, which expressly provides that the surviving Grantor may not amend the terms of the deceased Grantor’s separate share. By the same token, the language in § 9.03 stating that the purpose of the separate share was for tax-deduction purposes ultimately has no legal bearing or effect on the irrevocable nature of Buddy’s separate share.

Finally, it is contended that the trial court would still have reached the right result in concluding that Craig lacked standing because Craig sustained no damages, as Vicky was technically permitted under § 9.03 to completely liquidate the income and principal of the separate share. This argument, however, requires this court to presume that Vicky owed a fiduciary duty as trustee, that she breached that duty and that damages resulted—issues for the trial court to resolve on remand, as they are not before the court in this appeal.

Reversed and remanded.

Kelly v. Molosso, Record No. 0706-24-1, Oct. 21, 2025. CAV (unpublished opinion) (Callins). From the Circuit Court of the City of Newport News (Papile). (Andrew G. Mauck; Mauck & Brooke, PLC, on briefs), for appellant. William W. Sleeth III (Shawn M. Sweaney; Gordon Rees Scully Mansukhani, LLP, on brief), for appellee Michael Molosso, as Successor Trustee of the Estate of the Kelly Living Trust, Dated March 28, 2003, and Amendments Thereto. VLW 025-7-298. 9 pp.