Our trust attorneys in Miami review a recent case that highlights some circumstances under which trustees may be sued. This particular case shows how trustee liability may be established under the Florida Statutes:
Kritchman v. Wolk was decided in early October 2014 in the Third District Court of Appeals in Florida. The co-trustee, William Kritchman, is the son of the decedent and trust settlor, Lola Kritchman. Before Lola passed away she left a note explicitly stating that trust distributions should be made to cover two years of her cousin’s grandson Hunter Wolk’s college tuition. Wells Fargo became successor co-trustee of Mrs. Kritchman’s trust. William and Wells Fargo paid tuition for one semester, and subsequently “refused” to pay any further tuition.
The lower court had entered judgment against William and Wells Fargo in favor of Wolk. Wolk cross-appealed the judgment as it was deficient in providing compensation for two of the four counts of the second amended complaint.
According to court documents:
Wells Fargo paid Mr. Wolk’s educational expenses at Yale for the fall semester of his junior year in September of 2010…On November 23, 2010, a trust officer from Wells Fargo’s wealth management division sent an email to Mr. Wolk’s mother assuring her that a check for Mr. Wolk’s tuition bill would be sent…[William] countermanded his mother’s written instructions to Wells Fargo. The check for tuition and other expenses was not sent…
This case is a good example why individuals should appoint a trust protector. Trust protectors help direct the trustee so that proper administration is carried out. If a trust protector had been named for this trust, the trustee’s actions could have been closely monitored, the trustee removed, and a replacement trustee appointed.
The court ruled in favor of Wolk and ordered $85,826.76 plus interest for breach of the oral contract. William and co-trustees were ordered to disgorge distributions from the trust that were used for their legal expenses. The court also found Wells Fargo in violation of a handful of Florida Statutes. The “breaches of duty establish the liability of the co-trustees for breach of trust.”