Greetings!
Welcome to the latest edition of Reminger’s monthly newsletter, In Brief: Ohio Estate and Trust Litigation Updates, focused on estates, trusts, and guardianships and the disputes surrounding them.
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Mismanagement of Trusts and Breach of Fiduciary Duties in Helton v. Fifth Third Bank
The trustee owes duties to a beneficiary of a trust, including the duty to diversify trust assets. However, beneficiaries don’t all come in the same shape and size. For instance, assessing whether a trustee owes a duty currently to remainder beneficiaries, in addition to the current beneficiary of the trust will require analysis of the trust, the trustee’s historical decision making, and the Ohio Trust Code. The Helton v. Fifth Third Bank decision adds additional risk to the remainder beneficiary – and that risk is whether the statute of limitations runs against the remainder beneficiaries if the current beneficiary was on notice of the conduct that potentially would constitute a breach of trust.
In Helton v. Fifth Third Bank, plaintiffs were the remainder beneficiaries of trusts, which were held for the benefit of their mother during her life. The trusts were heavily concentrated with stock in a closely held business, which generated over $72 million in income distributed to their mother until her death in 2015. The Trustee, Fifth Third Bank, was concerned about diversification of the trusts, but never diversified. After the mother’s death, the closely held business filed for bankruptcy, and the values of the trusts declined to almost zero. Plaintiffs, whose interest in the Trusts had now vested, later sued Fifth Third Bank, asserting various claims regarding its management of the trusts. After successfully dismissing three of plaintiffs’ claims for statute of limitations issues, Fifth Third Bank moved for summary judgment on the remaining unjust enrichment claim, which challenged the amount of trustee fees that Fifth Third Bank received prior to their mother’s death. Fifth Third Bank argued that it never obtained a benefit from plaintiffs, because any benefit it received while plaintiffs were remainder beneficiaries was actually conferred by the mother. While the plaintiffs argued the unjust enrichment claim was brought on behalf of the trusts, the language in the complaint clearly asserted that the action was brought by plaintiffs in their individual capacity. Further in their prayer for relief, plaintiffs personally requested compensatory and punitive damages, and did not request that any funds be returned to the trusts. Therefore, the First District upheld the trial court’s dismissal of the unjust enrichment claim, finding that plaintiffs did not confer any benefit upon Fifth Third Bank.
Attorneys at Reminger have experience handling disputes and litigation involving mismanagement of trusts and breach of fiduciary duties. If you have reason to suspect wrongdoing by a trustee, we encourage you to get in touch with our Estate, Trust, and Probate Litigation team so that we can further investigate.
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Ohio Probate News & Insights |
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On December 15, 2022, Reminger's Estate and Probate Litigation Practice Group will host an in-person probate law symposium with the Columbus Bar Association. More details to come! |
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In our new e-book, Overcoming Disinheritance: Decoding the Estate Plan to Find a Path Forward, Adam Fried reviews the anatomy of an estate plan to help you estimate the value of an estate and examine how inheritances can be diverted by bad actors.
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Each week, our Estate and Trust attorneys review the latest Ohio Probate Case Law Updates. Visit our Estate and Trust Dispute Center of Ohio website for this month's newly added rulings.
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Boy Scouts of America Estate Planning Seminar |
Adam Fried and Paul Shugar will present at the 2022 Boy Scouts of America Lake Erie Council Estate Planning Seminar in September.
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Shana DeMooy
Columbus
sdemooy@reminger.com
614.232.2633
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Jessica S. Forrest
Cleveland/Akron
jforrest@reminger.com
216.430.2204
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Adam M. Fried
Practice Group Chair
Cleveland
afried@reminger.com
216.430.2193
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Timothy J. Gallagher
Cleveland
tgallagher@reminger.com
216.430.2162
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Patrick Kasson
Columbus
pkasson@reminger.com
614.232.2418
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Mary Kraft
Columbus
mkraft@reminger.com
614.232.2414
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Adriann S. McGee
Columbus
amcgee@reminger.com
614.232.2442
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Russell J. Meraglio, Jr.
Cleveland
rmeraglio@reminger.com
216.430.2157
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P. Nicholas Sebastiano
Cleveland/Youngstown
nsebastiano@reminger.com
216.430.2126
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Paul R. Shugar
Cleveland
pshugar@reminger.com
216.430.2262
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Joseph S. Simms
Cleveland
jsimms@reminger.com
216.430.2265
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Taylor Smoske
Cleveland
tsmoske@reminger.com
216.430.2130
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Leon A. Weiss
Cleveland
lweiss@reminger.com
216.430.2154
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Estate and Trust Dispute Center of Ohio
Learn more about the complex arena of probate, trust, and estate litigation by reading our blog posts, legal insights, law updates, representative cases, resources, and more.
Read more
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