A Direction in a Trust to Pay the Settlor’s “legal debts” Does Not Include Debts Secured by Real or Personal Property

In a case of first impression, the Minnesota Supreme Court held that a direction in a trust agreement to pay the settlor’s “legal debts” on her death has the same meaning it has in a will.  Accordingly, the clause does not require the payment of debts secured by the settlor’s real or personal property.  In re Pamela Andreas Stisser Grantor Trust, 818 N.W.2d 495 (Minn. 2012).

 

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.