A family squabble is nothing new. Those of us in California can probably think of a dozen movies based on just that premise. A family squabble that ends in a lawsuit is much less common.
Recently it was reported that a daughter requested an independent audit of a trust that was set up in her name by her father. The father not only created the trust on his daughter’s behalf, he was also the trust fund administrator. Learning of the daughters request for an audit, the father chose to sue his daughter for defamation. Their family Thanksgiving dinner might be awkward this year.
Both the father and the daughter are attorneys. The trust at one time was worth a reported $6.5 million and was set to go to the daughter on her 21st birthday. However, by the time she received the trust, after two extensions that were requested by her father and stepmother, it was worth $114,000. The trust originally had two estates in the Hamptons which were removed from the trust and replaced with two empty parcels of land. According to the daughter, her father and his wife squandered her trust.
The father’s libel suit is asking for $3 million in damages because he felt his reputation was tarnished. He further claimed that since he paid for her private schooling, college and law school and gave his daughter her first job at his law firm, that she has been amply rewarded and should be happy with the trust payment.
If there is a lesson in this it may be the importance of having a trust fund administrator that you can trust and that will faithfully honor the trust. In this case it may seem as though the father did not administer the trust according to its original intent. That however, will be for the court to decide.
Source: Above the Law, “Big-shot lawyer sues his trust fund-having daughter for defamation,” David Lat, Oct. 24, 2012
- At our Calabasas law firm we assist individuals and families with any matter pertaining to a trust administration plus living trusts, irrevocable trusts, QTIPs and other trust matters.
