The Minnesota Court of Appeals recently issued an unpublished decision involving litigation related to trust property in In re: The Frank John Rodriguez Sr. Trust, File No. 62-TR-CV-14-63 (Minn. Ct. App. Mar. 28, 2016) (Unpublished). The facts of the case involved a beneficiary seeking to prevent sale of trust property. The beneficiary claimed that the property was being sold for a proposed sum of $60,000.00 when the property was actually valued at greater than $120,000.00. As such, the beneficiary petitioned the district court requesting removal of the trustee, supervision of the trust, an order to stop the sale of the property, and an accounting of the trust. The trustee objected to the petition and a hearing was scheduled. However, neither the beneficiary nor his attorney appeared for the hearing and the court issued an order denying the petition with prejudice.
The beneficiary sought to vacate the judgment pursuant to Minnesota Rule of Civil Procedure 60.02. A hearing took place and the trustee confirmed that she would provide a full accounting and the district court indicated that it would supervise the trust. The beneficiary later indicated he continued to wish to have the judgment vacated and sought discovery regarding the property sale. As required pursuant to Rule 60.02, the district court sought evidence indicating that the beneficiary had a reasonable claim on the merits and allowed him limited discovery. However, the beneficiary never presented any evidence establishing a breach of trust or that the price of the property was unreasonable. Instead, the beneficiary’s lawyer wrote to the district court claiming that the property had been appraised at $94,000.00, had a tax value of $120,000.00, and there had been an offer of $140,000.00 to purchase the property. The district court determined that such assertions without detailed specificity failed to establish a reasonable claim on the merits. The court of appeals affirmed the district court noting that the beneficiary had failed to present any evidence that he had a reasonable claim on the merits.
The facts of the claim above emphasize the importance of thorough preparation in pursuing court intervention with respect to a trustee’s actions. Generally, a trustee must manage trust assets as a prudent investor considering the purposes of the trust and must do so while exercising reasonable care, skill, and caution. A person with an interest in the trust may petition the district court for an order to remove the trustee for cause or other action in the best interest of the beneficiaries, but there must be more than mere allegations to do so.
If you suspect there are grounds for removing a trustee for a trust or if you are a trustee and facing a petition for removal, you may wish to contact an attorney. Randy Sayers, Nate Dahl, and Adam Rohne at Hansen Dordell have investigated and pursued numerous matters involving administration of trusts and estates. If you have any questions, please contact one of these experience attorneys at Hansen Dordell by phone or email.
Nathaniel A. Dahl brings a blue-collar work ethic and a variety of experience to Hansen Dordell. He grew up working on the family dairy farm in western Wisconsin and worked as a carpenter for several years before attending law school.
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