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Fiduciary Powers vs. Duties and Pretermitted Heirs

Written by: Ralph F. Holmes

Fiduciary Powers vs. Duties and Pretermitted Heirs

Q: Citing trust provisions empowering him to mortgage real estate, the trustee contends that he has the discretion to mortgage trust property.  Is the trustee right?

A: The trustee is making a common mistake.  He is conflating his powers with his duties.  trusts, often in lengthy boilerplate provisions, grant trustees broad powers over trust property.  The fact that the trust empowers the trustee to mortgage property does not mean he can do so without liability.  Powers are tools a trustee may employ only in keeping with his or her fiduciary duties.  See RSA 564-B:8-815(b).  Whether the trustee may mortgage trust property depends on whether the transaction will further the interests of the beneficiaries (the duty of loyalty, RSA 564-B:8-802), give due regard to any differing interests of the beneficiaries (duty of impartiality, RSA 564-B:8-803), and be consistent with standards of due care (duty of prudent administration, RSA 564-B:8-804).

Q: The will omits to mention the testator’s daughter, but nominates her husband, the testator’s son-in-law as executor, evidencing that the testator was aware of his daughter.  Can she recover as a pretermitted heir?

A: While the nomination of the son-in-law as executor would appear to make it clear that the omission of the daughter as a beneficiary was purposeful, the law limits the inquiry to the express terms of the will.  Because she was not referenced by name or description, the daughter is entitled to her intestate share as a pretermitted heir.  In re Estate of Treloar, 151 N.H. 460 (2004).

 RSA 551:10 provides:

       Every child born after the deceased of the testator, and every child or issue of a child of the deceased not named or referred to in his will, and who is not a devisee or legatee, shall be entitled to the same portion of the estate, real and personal, as he would be if the deceased were intestate.

       Any child born after the death of the testator is entitled to relief under the statute.  A child or issue of a child not referenced in a Will is likewise entitled to his or her intestate share. 

Application of the statute to the facts of a given situation requires review of the case law, which is summarized below:

 

Claimant Not Named As Will Beneficiary

Situation

Pretermitted?

Authority

Child

Child’s Child (Grandchild of Testator) Was Referenced in Will

Yes

Gage v. Gage, 29 N.H. 533 (1854)

Child

Child Was Named as Husband of a Legatee

No

Boucher v. Lizotte, 85 N.H. 514 (1932)

Child

Will Referred to “Children”

No

Smith v. Smith, 72 N.H. 168 (1903)

Child or

Grandchild

Will Referred to “Heirs” or “Next-of- Kin”

Yes

In re Estate of MacKay, 121 N.H. 682 (1981)

Child

Child Was Named in Will Provision Revoked by Most Recent Codicil

No

In re Estate of Osgood, 122 N.H. 961 (1982)

Child

Child Was Named In Will Revoked by Most Recent Will

Yes

In the Matter of Jackson, 117 N.H. 898 (1977)

Child

Child was Named in trust That Will Expressly Excluded As Part of the Estate

Yes

In re Estate of Came, 129 N.H. 544 (1987)

 

 

 

 

 

 

 

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