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Minnesota Trust Account Dispute: Three Little Words and 4.3 Million Dollars

The Supreme Court of Minnesota, the highest court in the state, recently delivered its opinion* on an eleven year-long dispute.  On one side of the legal dispute was the deceased wife’s widowed husband who served as the personal representative of his wife’s estate.  On the other side was the trustee of a revocable trust account the wife had set up before she died.

The Trust Account: $4.3 Million

The major issue before the court was whether language in the trust compelled the trustee to pay off the wife’s legal debts.  The trust contained over $9 million in assets at the time of the wife’s death.  Her debts totaled over $4.3 million.  Over the eleven year process, the issue bounced around courts of several states.  The parties were unsuccessful in reaching any settlement agreement.

The Trust Account: “My legal debts”

The trust contained a provision that read that it should be used to “pay … my legal debts.”  The court conducted an extensive analysis of “my legal debts”.  This included how the phrase tends to be used in wills and trusts.  The court concluded that the trust language did not compel payment of the debts from the account.  The husband lost and could not use the trust assets.

This case demonstrates, among other things, the importance of even small details in drafting estate-planning documents.  It also shows  how important it is to make every effort to make sure one’s wishes are clear and the language used in estate planning documents accurately reflects those wishes.

 Disclaimer

All of the materials available in this blog is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain legal advice with respect to any particular issue or problem. Use of and access to this blog does not create an attorney-client relationship between Majeski Law, LLC and anyone who uses it.

* – See “In the Matter of: The Pamela Andreas Stisser Grantor Trust Under Second Amendment and Restatement of Trust Agreement dated June 6th, 2001” – Filed August 1st, 2012, A101646.  Link to the text of the case can be found here.

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