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Part II: Estate Distributions Need to be Done Without Unreasonable Delay

In Edwards v. Gillis, plaintiff, Rex Edwards appealed the trial court ruling stating that the court should have required only that he prove it was reasonable for defendant to have made preliminary distributions prior to Beverly's death in order for him to maintain standing to challenge the Trust amendments. However, the Court of Appeal affirmed the trial court's decision citing the following reasons: First, the Court noted, the defendant, John Gillis, had no personal nor financial interest in the assets of the Trust and had nothing to gain by delaying distributions. Second, Beverly had not been a beneficiary of the Trust since 1991, more than 15 years before the decedent's death, thus, John Gillis could hardly have unreasonably delayed distribution to disinherit someone whom he believed had no claim on the Trust. Third, John Gillis testified he did not learn of Beverly's illness until three months before her death. The court finds it unlikely that John Gillis could have issued a distribution in those three months between learning of Beverly's illness, and her death, when he has not made a distribution in the past 13 months and Beverly had no standing at that time to benefit from such a distribution.

Fourth, John Gillis relied on the advice of a professional (Teasley) in determining when to make distributions. Teasley advised Gillis against distributions until after receipt of the IRS closing document, because the trustee would become personally, financially liable for any further amounts determined to be owed if the Trust assets were insufficient to cover the liability. This was considered a "matter of practice."

And Lastly, Teasley opined that Gillis promptly administered the Trust. Based on all the reasons cited, the Court did not find any unreasonable delay in the distribution. The trial court's judgment was affirmed and Gillis was awarded his costs on appeal.

*This blog entry was not written by an Attorney and should not be construed as professional legal advice.

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