In Terrorem Clause and Reasonable Basis for Objections

A beneficiary of an inter vivos trust had a reasonable basis for her objections to the account of the trustee, and so the in terrorem clause did not apply to forfeit her of her beneficial interests in the trust. Kammer Family Trust, 11 Fid.Rep.3d 315 (Montgomery O.C. 2020).

[DBE Comment: “Reasonable basis” or “probable cause” for the objections should not have even been an issue, because the objections to the trustee’s account alleged breaches of trust, so the objectant was not contesting the trust or attempting to “set aside, nullify, or void” the trust, but was attempting to enforce it. The duty of a trustee to account is a fundamental duty, and the duty to account would be meaningless if the beneficiaries could not object to items in the account which were contrary to the terms of the trust or violated fiduciary duties.]

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