PETITIONER FAILED TO ESTABLISH A BREACH OF FIDUCIARY DUTY BY TRUSTEE SUFFICIENT TO REQUIRE REMOVAL

• Friday, October 4, 2019
• Category: Wills, Trusts and Estate Litigation

Petitioner failed to establish a breach of fiduciary duty by a trustee sufficient to require her removal.

Kristi and Zev Oman were the adoptive parents of the minor child known as Ari Naomi Gulden was Ari’s biological mother. In early 2013, Gulden discovered she had cancer. Gulden arranged for the Omans to adopt Ari. In her will, Gulden created an irrevocable testamentary trust for Ari’s benefit. She appointed Pamela Taylor as the trustee. Gulden died in June 2013.

When the Omans agreed to adopted Ari, they were unaware of the trust. After learning of its existence, they submitted documentation for reimbursement from the trust for Ari’s tuition, medical and counseling expenses. These communications went fairly smoothly until approximately October 2014. Taylor had proposed taking an advance on her trustee’s commissions. The Omans indicated that they wanted to be provided with copies of the monthly or quarterly statement of the trust’s checking and investment accounts. Taylor did not respond directly to this request. The Omans then processed to hire legal counsel. After attorneys for the parties exchanged communications, Taylor provided account statements to the Omans. Taylor did not follow with copies of the periodic account statements, although she did provide the Omans with K-1 tax statements for 2013 and 2014, along with year-end account statements.

Petitioner Kristi Oman sought an accounting, as well as removal of the current trustee with petitioner substituted as trustee. Petitioner withdrew her request for an accounting.

The court found insufficient evidence of any breach of fiduciary duty on the part Taylor. The parties had been in communication regarding trust issue. Although there was some initial confusion about the size of the trust due to personal representative’s incorrect representation of its value on the inheritance tax return, Taylor did eventually provide account statements and K-1 tax documentation. The Omans smutted request for reimbursement from the trust, and Taylor complied with their requests. The court agreed that it would have been better if Taylor had simply responded promptly to the Omans’ October 2014 request for information, but the trustee’s conduct did not amount to a breach of fiduciary duty.

Petitioner failed to demonstrate any damage or loss sustained by Ari that was caused by Taylor failing to provide relevant information regarding the trust. Although the court denied the request to remove Taylor as trustee, it strongly urged Taylor to provide account statements no less than quarterly and to respond promptly to the Omans request for information and reimbursement

REFERENCE: Digests of Recent Opinions, Pennsylvania Law Weekly, 42 PLW 849, Tuesday, September 3, 2019, In RE Estate of Guiden, PICS Case No. 19-0987 (C.R. Lehigh June 7, 2019) Johnson, A.J. (11 pages)

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