April 2017

Posted April 24, 2017

Charles F. Alexander v. Edwin J. Alexander, Edward L. Alexander, and William F. Alexander, C.A. No. 12587-MA (April 19, 2017)

Along with his three brothers, the Petitioner is one of four beneficiaries and Co-Trustees of a revocable trust (the “Trust”). According to the petition, Petitioner’s brothers have failed to keep him informed as to the Trust’s accounting and activity since early 2012, and have refused him access to materials that would enable Petitioner to value the Trust. Petitioner sought an accounting of all Trust activity from January 1, 2012 to the present, an immediate distribution of the Trust res, and an award of attorney’s fees and costs.

The Master noted that per the Trust instrument, the Trust was to be distributed in equal shares to grantors’ surviving children following the grantors’ death. Five years had passed since the death of the last surviving grantor. The Master found that “[f]ive years is more than enough time to wind up a trust.”

Ruling on a motion for judgment on the pleadings, the Master recommended that the Court issue an order requiring an accounting of the assets of the Trust since January 1, 2012 and, after the accounting, ordering distribution of the Trust assets in equal shares to the parties. And citing 12 Del. C. § 3584 and IMO Trust for Grandchildren of Gore, 2013 WL 771900, at *3 (Del. Ch. Feb. 27, 2013), the Master also recommended that the Court award Petitioner’s reasonable attorneys’ fees be paid from the Trust because his litigation conferred a benefit to the Trust by breaking the apparent deadlock among the Co-Trustees which was impeding the proper administration of the Trust and its timely termination.

Posted April 18, 2017

Frederick Conaway v. Baird, et al. File No. 359, 2016 (March 28, 2017)  

       Jesse Frederick Conaway (“Jesse) was the decedent’s adult son, and Janice Russell-Conaway (“Janice”) was the decedent’s second wife and widow. After disputes arose, the Court of Chancery removed them and named Kevin Baird as administrator and trustee. Mr. Baird then petitioned the Court of Chancery to ascertain whether certain transactions in Jesse and Janice engaged were proper.

       Eventually the case was appealed up to the Delaware Supreme Court. The Delaware Supreme Court partially reversed the trial court and ruled on several issues. Perhaps most notable among them is that the Supreme Court found that the trial court erred in merging the administration of the decedent’s trust and his estate. The Supreme Court found that the trial court incorrectly read the holding in In Re Estate of Arcaro, 1977 WL 9539 (Del. Ch. Oct. 12, 1977) to allow for the reordering of priority for the payment of estate debts and honoring bequests. In short, the Supreme Court held that the proper order would have seen the debts paid first by any estate assets before using any trust funds to pay those debts. As such, Jesse and Janice had been wrong to use trust assets to pay certain estate debts so that they could withdraw their bequests from the estate.

Posted April 17, 2017

       If you have been wondering why the blog has been less active recently, it is not because we have lost interest or care less about informing our readers. It is simply due to the relative dearth of recent Delaware estate and trust opinions.

       Since we started this blog in early 2013, there has been an average of approximately two written Delaware trust or estate opinions issued each month. However, over the last seven months, there have only been a total of four written opinions of which we are aware. We don’t derive any significance from this blip in the written opinion numbers. From reviewing the daily case filings in Chancery, we think the new trust and estate case filings appear steady and that the number of written opinions will likely increase in the near future such that it is more in line with previous numbers.