PROBATE CORNER
UPCOMING PBCBA SOCIAL EVENTS
PROBATE CORNER
Equitable Deviation Doctrine ( Continued )
DAVID M . GARTEN
Case study . In Skarsten-Dinerman v . Living
Trust , 2021 Minn . App . Unpub . LEXIS 996 ( Minn . App . 2021 ), a beneficiary , Skarsten- Dinerman , sought to modify the trust to allow the immediate sale or distribution of the trust ' s assets consisted of four parcels of land . The trial court denied the petition and the appellate court affirmed . On appeal , the beneficiary argued that the following unanticipated circumstances justify modifying the trust : ( 1 ) Three of the six beneficiaries have special needs trusts . If the beneficiaries without special needs trusts pass away first and leave no descendants , the trust property will be distributed to the beneficiaries with special needs trusts and placed in those trusts . When those beneficiaries pass away , some or all of the funds may then go to the state as reimbursement for medical services paid for by the state . And ( 2 ), the decrease in the value of the trust ' s farmland assets along with the " negligible " rate of return the trust receives by renting the land . The appellate court , in rejecting the beneficiary ’ s arguments , reasoned :
With regard to the first argument , “ the state ' s ultimate interest in the special needs trusts is speculative because it depends on which beneficiaries pass away first . Further , the state would still have an interest in the trust assets under the proposed modification because the proceeds from any sale of the trust assets would be placed in the special needs trusts . And ultimately , the state ' s interest would simply constitute repayment after the beneficiaries ' deaths for medical assistance received during their lifetimes . This outcome , which benefits the beneficiaries of the special needs trusts as intended , is not a changed circumstance that justifies modifying the trust .” With regard to the second
argument , “ Milton was a farmer who likely would have anticipated fluctuations in the farm economy , yet he chose to place his land in the trust as a source of steady income for his children in the future . As discussed above , the trust is still earning income by leasing the land . Further , the value of the land may fluctuate upward before the trust property is ultimately distributed . Finally , and most importantly , even assuming these circumstances relating to the farmland were unforeseen , selling or distributing the land at this time as Skarsten-Dinerman proposes would thwart a material purpose of the trust : to provide the beneficiaries with a continuing source of annual income from the farmland .”
In Prince v . Lynch , 2008 R . I . Super . LEXIS 132 ( R . I . Super . 10 / 22 / 08 ), the court found the following material facts to be changed circumstance relevant to the Court ' s determination of whether to apply the doctrine of equitable deviation to terminate the Trust : ( a ) changes in circumstances affecting the interpretation of the Trust provisions and the administration of the Trust since the Settlor executed the Trust in 1932 ; ( b ) changes in the law over the past seventy-five years ; and ( c ) the proliferation of complex and extended litigation involving the Trust and its beneficiaries . “ The Settlor set out to create a legacy to support and benefit his descendants . Clearly he did not foresee that the Trust would engender expensive legal disputes regarding its interpretation and administration .”
For additional cases discussing the application of the doctrine of equitable deviation , refer to the Restatement ( Third ) of Trusts , § 66 .
UPCOMING PBCBA SOCIAL EVENTS
Sunday , February 2 nd 11:00 A . M . - 2:00 P . M . Bedner ' s Farm - Boynton Beach PBCBA Annual Family Event
Tuesday , February 4 th 5:30 P . M . - 7:30 P . M . Blind Monk - WPB Local Gov ' t & Land Use Networking Happy Hour
Thursday , February 27 th 12:00 P . M . - 1:00 P . M . Live via Zoom Lawyers for Literacy ' s
Virtual Book Club - " The Hum " by Helen Phillips
Thursday , February 27 th 5:30 P . M . - 8:00 P . M . Game of Axes - Palm Beach Gardens NCS Game of Axes Tournament & Happy Hour
For more events , please visit : palmbeachbar . org / eventcalendar
PBCBA BAR BULLETIN 21