The August 2021 article in Rhode Island Lawyers Weekly by Barry Bridges entitled: “Trustees can be indemnified for attorneys’ fees” recapped a trustee case litigated over a ten-year period including an eleven-day trial.
The matter involved several issues of interest to trustees and lawyers representing trustees. These issues included: the duty of a trustee to defend the trust, a trustee’s right to compensation from the trust, and a trustee’s right to indemnification for expenses incurred in the administration of the trust, including legal fees and interest incurred on any unpaid legal fees.
From the article:
Counsel for the trustees, Duffy & Sweeney lawyers Robert M. Duffy and Stacey P. Nakasian, told Lawyers Weekly that the long-running litigation offers several notable takeaways.
“An issue of first impression in the Superior Court was whether a life beneficiary and a single residual beneficiary who’s then living, meaning at that point in time they were 100 percent of the beneficial interest in the trust, can seek an early termination,” Duffy said. “The court ruled that they could in fact do so.”
Nakasian added that the rulings throughout the course of the litigation also solidified the proposition that a trustee has a duty to defend the trust and will be indemnified for fees and expenses incurred in so doing, even if a judge eventually decides against the trustee — here, agreeing with the beneficiaries’ position on termination.
Check out the full article in Lawyers Weekly if you are a subscriber or sign up for a one-month trial.
To learn more, reach out to Stacey Nakasian or Bob Duffy. Or see our practice area page on Fiduciary & Trusts.