Williams Revocable Trust (2017) & Consolidating Claims

Casual observers might not suppose that wills, estates and trusts often give rise to some of the most bitter quarrels in the legal world. Some people might suppose – or hope – that these things would tend to lead to more cooperative behavior from interested parties, but the truth is often closer to the opposite. Wills frequently produce some of the most heated battles seen throughout the field of law; the same is true for trusts. If we pause and contemplate all the variables involved, this fact becomes a bit easier to understand. Wills, for instance, often cut out certain people as beneficiaries, something which obviously doesn’t create a very pleasant situation; wills also include instructions which might be vague or ambiguous, something which produces fertile ground for challenges. This is one of the reasons as to why a qualified estate planning attorney is necessary: investing in an estate planning attorney often prevents costly litigation in the future.

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The case of In the Matter of Williams Revocable Trust (2017) was a case which involved a prolonged legal dispute and complex issues. In this case, the decedent intended to set up a trust which would fund a charitable foundation, but issues arose almost immediately after the decedent passed away. Let’s go over this case in a bit of detail so we can see some of the issues involved with estate related disputes.

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Facts of the Case

The decedent in this case, Donald E. Williams, passed away in 2012 by suicide. Prior to his death, he consulted with an attorney to create a will, establish a trust, and put together a corporation (a charitable foundation). Mr. Williams appointed a personal representative for his estate, and also appointed trustees to manage the trust. Basically, the estate plan was as follows: the decedent’s estate, valued at around $3.5 million, would be used to create a separate trust (an “individual beneficiary trust,” or IBT) solely for the benefit of his long time girlfriend; a separate trust would hold the remainder of the decedent’s assets, roughly $35 million, and that trust would fund the charitable corporation set up by the decedent; whatever assets were left after the IBT was funded would go into the trust.

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Soon after the decedent passed, the personal representative of the decedent’s estate became involved in disputes with the trustees of the trust. Those disputes led to multiple lawsuits, and ultimately those suits were mediated; the charitable corporation (referred to as the “Foundation” in court documents) participated in the mediation, as it was an interested party as a beneficiary. The outcome of the mediation was an agreement and a “mutual release” in which the corporation agreed to be barred from raising certain claims against the trustees. However, not long after the mediation occurred, the corporation filed two lawsuits against the trustees, one for removal of the trustees and another for damages.

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Because the two cases were sufficiently similar, the court consolidated those cases as a single case, attaching a single case number. The court dismissed the removal part of the case, finding that the trustees had not committed acts which warranted removal. But, the court granted partial summary judgment on the damages part of the case, and the remaining unresolved issues were scheduled for trial. The corporation filed an appeal of the decision pertaining to the removal before the remaining issues (pertaining to damages) could be resolved.

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Ruling & Discussion

The trustees argued that the appeal filed by the corporation should be dismissed because the judgment on the removal part of the case was not a final, appealable judgment. Because the two cases had been consolidated, the dismissal of the removal part of the case wasn’t a separate, independent order which might provide grounds for an appeal. The appellate court agreed with the trustees’ position and held that the corporation’s appeal was not viable because an appealable judgment (as to the removal aspect of the case) had not been rendered. Thus, the court still needed to render a determination on the merits of the remaining issues pertaining to damages.  

Essentially, the charitable corporation lost this particular decision because of legal technicalities, as we can see. This is why obtaining a qualified estate planning attorney is so critical.

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Contact the Murphy Law Firm for More Information

Readers who want to know more about consolidating claims, revocable trusts, irrevocable trusts, appointing personal representatives and trustees, or any other relevant estate planning topic, contact one of the estate planning attorneys at the Murphy Law Firm by calling 240-219-1187.

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