This opinion holds that an improper assignment is not a basis for trustee liability.  In this case, a trust beneficiary assigned his interest in the trust for the benefit of other beneficiaries in exchange for a cash payment from the trust,  even though the trust had a valid spendthrift provision barring voluntary and involuntary alienation.  The trustee then made distributions in accord with the assignment. Twelve years later, after the trust’s termination, the assignor brought an accounting action. In affirming summary judgment for the trustee and another beneficiary, the intermediate Arizona appellate court held that the trustee was not liable for payments made in accord with an invalid assignment, that the assignor was not entitled to an accounting because he was no longer a beneficiary, and that in any event the assignor’s action was barred by laches.  In re Indenture of Trust Dated January 13, 1964, 326 P.3d 307 (Ariz. Ct. App. 2014).

See Gerry W. Beyer,   In re Indenture of Trust Dated January 13, 1964, Wills, Trusts & Estates Prof Blog.

Posted by Chuba Abaelu, Associate Editor, Wealth Strategies Journal