Thursday, July 30, 2020
In Ferguson v. Ferguson, the Idaho Supreme Court addressed "the fiduciary duties of a trustee who has discretion to spend the trust's principal, the scope of records available to a trust beneficiary, and the enforceability of a trust instrument's no contest provision."
Roger and Sybil Ferguson created the Ferguson Family Revocable Trust in 1994. Their son Michael, was not included as a beneficiary in the original trust.
Roger died in 2012. The remaining assets were split between three sub-trusts. Sybil exercised her right to serve s trustee of the sub-trusts. In 2013, Sybil executed a Will and exercised power of appointment granted to her by the trust. This time, Sybil named Michael as a beneficiary, as well as various grandchildren.
As a result of the new will, Michael became entitled to a share of the principal and undistributed net income remaining in the Survivor's Trust at the time of Sybil's death. As trustee of the Survivor's Trust, had the right to distribute as much of the principle as the trustee "may determine is necessary or advisable for any purpose" and as much of the principal as the surviving Grantor may request "for any reason."
Sybil died in 2015. Following Sybil's death, Michael requested financial information regarding the Original Trust and the sub-trusts dating back to Roger's death in 2012. A dispute arose over the scope of trust information available to Michael.
The Idaho Supreme Court held that where a trustee maintains discretion to spend the trust's assets, the trustee is still subject to basic fiduciary duties under Idaho law. Also, fiduciary duties are not limited to those duties stated in a trust agreement.
See Idaho Supreme Court: Mom Owed Son Fiduciary Duties Under Trust Agreement, Probate Stars, July 22, 2020.