Trust breach happens when your children decide to argue over semantics. Would you rollover, in your grave, if your children sued one another ten (10) years later?
Well, this actually happened in a case called In re: The Frank John Rodriguez Sr. Trust. As unfortunate as it is when trustees are sued by beneficiaries, we can learn a lot from this public case.
Really, I believe the punchline for the Rodriguez family comes down to cordial communications and unconditional love between siblings. Unfortunately, it doesn’t appear either of these attributes existed.
First lesson in preventing a trust breach
In my experience, most if not all trustees are trying to do the right thing. Sometimes this works out perfectly. Other times, sibling rivalry kicks in and every decision gets scrutinized.
Money is not the issue. Instead, family dynamics is the controlling factor. Not every family is equipped or able to handle a trust for an estate. I have seen many examples where a parent’s estate should have been divided in equal shares. Yes, you have a choice.
What I am really trying to say is this: you know your family better than me and I encourage every person to reflect and predict the behavior of their family members. For example, ask yourself:
- What might go wrong?
- Do my children or their spouses disagree a lot?
- Are they mentally strong enough to make black and white decisions?
- Is there a good reason why equality of an inheritance is a bad idea?
Second lesson in preventing a trust breach
The second lesson we can learn from the case above is the following rule: a trustee must manage trust assets as a prudent investor, considering the purposes, terms, distribution requirements, and other circumstances of the trust.
Yes, every person wishing to form a revocable trust should select their trustees wisely. More importantly, a trust document should help the trustee. Even from your grave, you can impact your family by helping them:
- Identify trustworthy professionals or entities for assistance,
- Allowing for a corporate trustee, and or
- Leaving room for an error of judgement.
Third lesson in preventing a trust breach
The third lesson we can take from this case is the fact we as people can prevent or reduce the likelihood of a trust breach by engaging in open communications.
Communication needs to extend beyond text messaging and Facebook postings. I am talking about sitting down for an hour or two and working through details. Those who need help can:
- Retain an agent like an attorney,
- Use mediators, and or
- Choose a public setting to reduce tension.
Getting back to the case above, Brother is upset with Sister. If you have a sibling, perhaps you have experienced this too. What makes this case unique is the issues being argued. Here, Brother believed he received an offer from another person wishing to buy their dad’s property at twice the value.
In my experience, an offer to purchase property works through a real estate agent and or the usage of a purchase agreement. This case doesn’t appear to have either.
Also, the Court does not explain why a firm offer failed to exist. Even more significantly, my gut says Brother wanted conflict more than the sale of his dad’s house. Additionally, contract law fails miserably and works against Brother.
Fourth lesson in preventing a trust breach
Certainly, we could find more, but the final lesson I believe goes without saying when working through a Minnesota trust breach is: attend scheduled court hearings.
Yes, Brother missed a court hearing. When a person misses a court hearing, their goals sometimes turns into asking a court to start over. Yes, a trust breach can start over under rule 60.02 upon asking a court to review:
- A mistake,
- Excusable neglect, or
- Any other reason justifying relief.
Prevent trust breach in Minnesota
I believe the best step is having a formal discussion to address issues and prevent trust breach.
Please contact me if you want additional information.