Draining the marital trust first in the face of different remaindermen: What about the trustee’s duty of impartiality?

Charles E. Rounds, Jr.

The trustee is the current beneficiary of both the marital trust and the credit-shelter trust, with a power to invade so much of the principal of each as the trustee shall deem necessary for the trustee’s own personal support. Her step-children are entitled to the remainder in corpus of the marital trust; her grandchildren are entitled to the remainder in corpus of the credit-shelter trust. The trustee has been exclusively invading the principal of the marital trust. The step-children objected. The Court ruled that they were not entitled to discover information on the administration of the credit-shelter trust and that the trustee need not take into account the trustee’s equitable property rights under the credit-shelter trust in determining what is necessary for the trustee’s support from the marital trust. See Matter of William J. Raggio family Trust, 460 P.3d 969 (Nev. 2020). Perhaps the two trusts should have been sharing pro rata the burden of the principal distributions or, in the alternative, the step-mother should not have been serving as trustee of the marital trust. See Loring and Rounds: A Trustee’s Handbook § (2020 Edition), which section is reproduced in its entirety in the Appendix hereto.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles E. Rounds, Jr., Suffolk University Law School | Attorney Advertising

Written by:

Charles E. Rounds, Jr.

Suffolk University Law School on:

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