TRUSTEE OF FAMILY TRUST SUES ESTATE OVER MILLIONS ALLEGEDLY STOLEN
Where’s the money ? That’s a question that a lot of Palm Beach estate beneficiaries and trust beneficiaries from Boca Raton to Fort Lauderdale ask themselves, and the trustees of family trusts, and the personal representatives of Florida estates. Did a personal representative of an estate steal oil & gas royalties, sales $$$, which should have gone to a family trust ??? Or did the deceased person do that ? Over a number of years ? This federal case involving estates, personal representatives (estate executors) and trustees of family trusts, in Colorado, is going on right now and has allegations of
- breach of fiduciary duty,
- fraud,
- tortious interference with prospective business relations,
- civil theft,
- accounting,
- civil conspiracy,
- conversion
This is serious stuff !
TRUSTEE WANTS TO KNOW: ARE THERE MILLIONS MISSING ??
The Trustees filed a lawsuit on June 4, 2013. They made serious allegations of wrongdoing about investments and real estate against others, including the estate of a person who was evidently involved with these business dealings.
The alleged wrongdoing was not discovered until one of those persons died. Evidently, the alleged wrongdoing was discovered during the estate administration or probate proceeding.
As we have said many times here in Palm Beach probate matters, conducting financial discovery in Palm Beach estates helps you answer the question: where’s the money ?
FRAUD MUST BE “SPECIFIC” OR WITH “PARTICULARITY”
In this trust lawsuit, there were allegations of fraud. Fraud, or undue influence for that matter, must be pled with “particularity.” This means that if you’re the trustee of the family trust, and you are accusing the personal representative of an estate, or a deceased person, of stealing or hiding something, you need to be specific: your allegations of fraud must tell the probate court who committed it, how the fraud was committed, when it occurred, with some basic facts and circumstances.
In Florida estates, and in Palm Beach inheritance lawsuits, when someone accuses another of fraud, the fraud may be dismissed if it’s not particular enough or specific enough.
ESTATES WITH PRIVATELY HELD INVESTMENTS
This reported opinion on this trustee lawsuit does not give us all the specifics, but it appears that one of the investment partners, now deceased, is accused of wrongdoing. In Florida, estates may have an interest in a private investment, such as a Florida limited partnership or a Florida limited liability company. Sometimes that private investment is required to be sold to the other partners, or to the partnership itself, when a partner passes away. Otherwise, the personal representative of the Florida estate should value the asset and make a determination as to whether it should be distributed to estate beneficiaries, or someone’s Florida revocable trust, or whether the privately held this should be sold for cash.
DUTY TO INVESTIGATE
A Florida personal representative, or a trustee of a Florida revocable trust, which inherits a privately held investment may wish to learn about the investment to make sure that the Florida estate or Florida trust is receiving everything it should.
Q: Did the Florida investor, now deceased, receive every distribution he or she should have from the investment partnership?
Whether a Florida personal representative, or a Florida trustee, has a duty to investigate, depends on facts and circumstances.
AMENDING A FLORIDA LAWSUIT
This Colorado federal lawsuit involved amending the complaint. In Palm Beach probate litigation circles, and in Florida estate litigation, most probate court judges permit a plaintiff to amend his or her complaint liberally. That means that a trustee who sue someone to recover trust assets may bring new causes of action, or bring in new defendants, as information is discovered through the discovery process. But this is never unchecked or unlimited. A Florida probate court hearing an estate lawsuit may not permit a trust lawsuit to be amended if the matter is set for trial, if it is too late to amend, or if it would prejudice the other side. In some instances, Palm Beach probate litigators may need to discuss their probate trial strategy with their clients: whether they should move the trial date to amend their complaint or not.