.webp)
.png)
Just as we haven’t spent much time devoted to discussing torts in the context of Maryland estate law, the same is also true regarding the rights of beneficiaries. We have devoted substantial efforts to discussing the basic structure of wills, the creation and enforcement of trusts, and other important topics, but we haven’t discussed the common law rights of beneficiaries with respect to either wills or trusts here in Maryland. As it turns out, beneficiaries have certain rights when it comes to wills and trusts; this is true even for beneficiaries who possess merely future remainder interests as opposed to other types of interests.
In the case of Johnson v. Johnson (2009), Maryland courts addressed a central question on the common law principle regarding the right of beneficiaries with future remainder interests to be informed on the state of assets in a trust? The response to this query may surprise many readers, as many readers may understandably suspect that those with future remainder interests might not have any rights with respect to asset accounting (of trusts).
Let’s review the facts of this important case in detail.
Facts of the Case
Mr. Johnson and his wife Mrs. Moreland Johnson established an inter vivos trust which was later divided into two separate trusts following the death of Mr. Johnson in 2006. The couple’s son, James Johnson (who was actually the stepson of Mrs. Moreland Johnson), held future remainder interests in both trusts. James requested copies of the trust agreement and also a formal accounting statement documenting the trust assets from Mrs. Moreland Johnson, as Mrs. Moreland Johnson had been selected as the sole trustee of both trusts. This request was refused by Mrs. Moreland Johnson, and ultimately James filed a suit to compel the production of these documents.
At the trial court level, James was successful, as the court held that the common law doctrine of beneficiary rights to receive such documents applied to beneficiaries with future remainder interests in trusts. The case then went before the appellate division.
Ruling & Analysis
At the appellate level, James was again successful as the court upheld the trial court’s ruling, finding that beneficiaries such as James were indeed entitled to such documents. The logic of this right (of beneficiaries to receive such documents) is that producing documents of this sort may function as a mechanism to ensure that fiduciary duties are being carried out. If beneficiaries are denied such documents, there is a greater chance that trustees may siphon funds, or fail to perform their duties in some way; insisting that beneficiaries have the right to receive such information is a means to keep trustees in check.
Cases such as Johnson v. Johnson (2009) are essential common law decisions for Maryland beneficiaries, as beneficiaries need to understand their rights under current law. Many beneficiaries, especially those with only remainder interests, may assume that no such rights exist and fail to demand access to important information such as trust agreements or accounting statements. Current or future beneficiaries need to be certain that they hire competent legal counsel, counsel who is familiar with decisions such as these, so that all rights may be adequately exercised as necessary.
This case actually ended up going all the way to the Maryland Supreme Court – the stepmother was determined to prevent production of the documents! – but that case was actually tossed out because the Supreme Court ruled that the original trial court determination was an interlocutory order, not an appealable final judgment in the first place.
Contact the Murphy Law Firm for More Information
Those who want additional information on the rights of beneficiaries under current Maryland estate law, the essentials of drafting a will, the basic structure of wills, creating trusts, or any other estate planning matter, contact one of the estate planning attorneys at the Murphy Law Firm today by calling 240-219-1187.
.png)
.png)
