Can A Conservator Appoint a Trustee?
Poorly written Connecticut Revocable Trusts are produced and signed every day. Sometimes the mistakes can be harmless while other times one oversight can lead to significant problems and a costly court dispute. Unfortunately that is what happened to the Z family.
V. Z. created a Connecticut Revocable Living Trust. He named a Trustee and he named a successor Trustee. Where did his attorney go wrong? The language in the Connecticut Revocable Trust governing the successor Trustee only applied in the event of the Trustee’s death or resignation. Can you guess what was missing? The trust language did not provide for the successor Trustee to take over the Trustee position if the acting trustee became incapacitated. Well, as fate would have it the Trustee became incapacitated many years later, a Conservator was appointed, and the Court had to decide who was the proper Trustee.
In its memorandum of decision, the Probate Court stated that: “the Conservator of the Estate shall have the power to appoint a successor trustee in the V. Z. Revocable trust.” The V. Z. revocable trust is plaintiff’s exhibit number one. Dated March 27, 1979, it indicates that V. Z. is the settlor, and R. Z. is designated as trustee. Article VI names First Bank of New Haven as successor trustee in the event of the death or resignation of the trustee. The trustee is not given the authority to name new successor trustee upon her death or resignation. Indeed, pursuant to article IV, only the settlor has the authority to modify the trust agreement, and upon his death, the trust becomes irrevocable. Accordingly, the record reveals that Falvey is correct in her assertion that the V. Z. revocable trust already has a named successor trustee. Therefore, the Probate Court’s order has effectively removed a financial institution as successor trustee, which is contrary to the language of the trust instrument. In order to support such a decision, it will be necessary to determine if the Probate Court has the authority to allow a conservator to name a new successor trustee that is potentially contrary to the successor trustee provided for in the trust.
The Connecticut Statutes allow the Probate Court to construe the meaning of a trust, but it does not authorize the court to allow a conservator to appoint a successor trustee in contravention of the terms of the trust. Moreover, although Mirto’s appointment as conservator gives him the ability to act in R. Z.’s stead as trustee of the trust, this does not change the fact that a successor trustee is in place. Since there is no evidence that R. Z. has either died or resigned, Mirto is now effectively the trustee of the V. Z. revocable trust and can exercise all of the powers of that role. The V. Z. revocable trust, however, does not allow for the trustee to appoint a new successor trustee.
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This post is from a published judge’s decision in a lawsuit. One of the things about lawsuits is they are public, unless you have the records sealed. As public information, it is freely available for publishing without any party’s consent. You can read the full decision here: The Zurulo Decision
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If you are not sure if a Connecticut Revocable Living Trust is appropriate for you, there are 2 free seminars in Watertown on this week. Here are the details:
Wednesday August 6
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