Monday, January 28, 2008
A grandfather created a testamentary trust directing the trustees to distribute to his granddaughter so much of the income and principal as the trustees determined to be advisable for her “proper support, education, maintenance and general welfare.”
The beneficiary’s father, as co-trustee, used trust funds to pay for the beneficiary’s secondary school tuition and certain medical expenses. The beneficiary challenged those expenditures in an accounting proceeding.
The court reversed the approval of the expenditures holding that while the expenditures were authorized by the governing instrument, a hearing was required to determine whether the trustees acted in good faith and in furtherance of the beneficiary’s best interests. In re Wallens, 9 N.Y.3d 117 (2007).