Question 1
Sam, a widower, set up a valid, revocable inter vivos trust, naming himself as trustee,
and providing that upon his death or incapacity his cousin, Tara, should be successor
trustee. He did not name any additional trustee. He directed the trustee to distribute
the income from the trust annually, in equal shares, to each of his three children, Ann,
Beth, and Carol. He specified that, at the death of the last of the three named children,
the trust was to terminate, and the remaining assets were to be distributed to his then
living descendants, by representation.
When he established the trust, he also executed a valid will pouring over all his
additional assets into the trust.
Two years later, Sam died. He was survived by Ann, Beth, and Carol. Within two
months, Dave, age 25, began litigation to prove that he was also a child of Sam’s,
although Sam had never known of his existence.
For three years after Sam’s death, Tara administered the trust as trustee. Because Ann
had very serious medical problems and could not work, and because Beth and Carol
had sufficient assets of their own, Tara distributed nearly all of the trust income to Ann
and little to Beth and Carol.
After the court determined that Dave was in fact Sam’s child, Dave claimed a share of
the trust. Beth and Carol have filed suit against Tara, claiming breach of fiduciary
duties. Tara has submitted her resignation, and Beth and Carol have sought
termination of the trust so that all assets may now be distributed outright to the
beneficiaries now living.
1) What interests, if any, does Dave have in the trust assets? Discuss. Answer
according to California law.
2) Are Beth and Carol likely to be successful in terminating the trust? Discuss.
3) Are Beth and Carol likely to be successful in suing Tara? Discuss.
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