Trustees liable for beneficiary’s legal fees for refusal to make required trust distribution.
Jacob Sklaire created an inter vivos trust that provided after his death for the distribution of $475,000 to his wife and the remainder to his two daughters, and named his daughters as co-trustees. After Jacob’s death, his daughters refused to distribute assets to his wife, and his wife sued to compel the distribution. Jacob’s wife prevailed at trial and the court awarded her costs and legal fees. The daughters agreed to pay the legal fees from the trust but were unable to do so because they had paid their own legal fees out of the trust and the trust assets were insufficient to both make the required distribution and pay the legal fees. The wife moved to compel the payment and to hold the daughters personally liable for breach of fiduciary duty.
The trial court found that the daughters were jointly and severally liable for the legal fees. On appeal, the Florida Court of Appeals affirmed, with one justice dissenting on the grounds that the daughters were not before the court in their individual capacities. Another justice that concurred with the majority decision wrote separately to reject the dissenting justice’s analysis on the grounds that the daughters were defendants before the court who had participated in the litigation for over seven years and had made unauthorized transfers to themselves from the trust during that time.