In the Matter of the Estate of Eleanor Cohn
Dec 02, 2011OUTCOME: Presently being appealed
The case was an attempt to remove Trustee of a Trust with defective special needs provisions who refused to pay out Trust funds for any number of qualifying requests, including medical. The Trustee arg ... ued that because of the special need trust language allowing for complete discretion the Trustee need not make any distribution if the beneficiary had their own funds and if the beneficiaries estate did not decrease in similar proportion to the Trust. There was no basis for the "downward flux" theory they were alleging was required. In addition, the Trust required that the Trustee make distributions for a wide range of items, including medical, that would in effect destroy the special needs trust (and arguably then making it merely a discretionary trust with a specific standard). The judge, being in a small town and being acquainted with the Trustee (the Trustee's husband purchased the judges law practice when he took the bench), the Trustee's lawyer and the lawyer for the residuary beneficiary, found a way to conclude the Trust was valid and that the Trustee need not make distributions (and that the beneficiary was not being cooperative). The case is currently being appealed.
