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Connelly Legal News and Views
The Underfunded Trust
September 03, 2017
At dispute in this case was an alleged underfunded trust that was created by the decedent, Donelson Glass, for the benefit of a daughter, Jacquelin, who was now deceased. This trust was part of a property settlement agreed upon by Jacquelin's divorcing parents, Donelson and Marcia Glassie. There were two other daughters from a previous marriage who had fully funded trusts.
In February of 2011, Donelson died and according to the executor, the amount of money contributed to Jacqueline's trust was not "equal to the amount of the Trusts" for the other two daughters. At that time, Jacqueline filed a claim against her father's estate claiming that he had breached the earlier property agreement to fund the trust to the equivalence of her sisters.
The executor denied the claim and Jacqueline then filed a petition for a determination of the disallowed claim at the Probate Court in Newport. In June of 2012, the Probate Court ruled that her claim should be decided by the Superior Court. Then in November of 2012, Jacqueline unexpectedly died and the eldest sister, Alison was appointed executrix of Jacqueline's estate and became the plaintiff in the action.
In April of 2013. the defendant (the executor of Donelson's Estate) moved for a summary judgment arguing that the plaintiff lacked standing because the Trust in question had terminated upon Jacqueline's death. The Superior Court granted summary judgment in favor of the defendant concluding that the plaintiff lacked standing to sue the estate because only the trustee may institute an action on behalf of the beneficiaries of the trust. This was appealed to the Supreme Court which affirmed the ruling.
The bottom line -- Only the trustee has proper standing and authority to sue.