Probate & Trust Law Section Conference Manual ... - Minnesota CLE

4. *In the Matter of the Frank J. Rekucki, Sr. Revocable Trust under
Agreement dated September 8, 1997, No. A11-2028, 2012 WL 2368992
(Minn. Ct. App. June 25, 2012). Because the settlement agreement
conflicted with the trust agreement provision regarding the
appointment and succession of trustees, the settlement agreement was
unenforceable. After the decedent died, his children got involved in
litigation regarding his revocable trust. Some of the parties signed a
settlement agreement that provided that the trustee of the trust would
resign and would be replaced by two specifically named cotrustees. One
of the parties then petitioned the court to enforce the settlement agreement.
The district court entered an order enforcing the settlement agreement, but
the Minnesota Court of Appeals reversed. The problem was that the
decedent’s revocable trust agreement contained a specific provision
regarding the appointment and succession of trustees. The appellate court
held that, under Minnesota law, a trustee has no inherent power to appoint
a cotrustee or a successor trustee, and, absent legislation to the contrary,
the trust agreement controls the appointment of trustees. Minnesota law
provides that only by order of a district court can a successor trustee other
than the one specified in the trust agreement be appointed. Because the
settlement agreement conflicted with the settlor’s intent as expressed in
trust agreement’s provisions regarding the appointment and succession of
trustee, it was unenforceable.
5. In the Matter of the Trust created by Lydia Butler Dwight, 949
N.Y.S.2d 921 (N.Y. Surr. Ct. 2012). The term “lawful issue” in the
trust agreement does not include children born out of wedlock. The
decedent created a trust for the benefit of her “lawful issue” per stirpes.
The decedent was survived by three children. One of the decedent’s
children died and his income became distributable to his three children,
one of who later died but was survived by one nonmarital child.
JPMorgan Chase Bank, N.A., as trustee of the trust, filed an action to
determine whether the trust term “lawful issue” included the nonmarital
child. The nonmarital child submitted evidence that she was the deceased
child’s daughter, including affidavits from both of her paternal aunts who
would have otherwise received her share, her birth certificate, photos,
letters, a copy of her deceased grandfather’s will, and a copy of her
deceased father’s will, which named the child as his daughter, executor,
and beneficiary. The court, however, held that the term “lawful issue”
could only be interpreted to include marital children on the grounds that:
(1) in spite of the extensive evidence of paternity that would have allowed
the nonmarital child to take under the laws of intestacy from her father, the
evidence did not suffice to qualify her as “lawful issue” under the terms of
the trust agreement; (2) under the law as it existed when the trust was
created in 1971, “lawful issue” included only those children born in
wedlock; (3) after the execution of the trust agreement, New York enacted
a law that allowed for a child born out of wedlock to be “legitimized” and
thus deemed “lawful issue,” but this statute was ineffective to render the
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