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Wilson v. Wilson - 203 N.C. App. 45, 690 S.E.2d 710 (2010)

Rule:

The beneficiary of a trust is always entitled to such information as is reasonably necessary to enable him to enforce his rights under the trust or to prevent or redress a breach of trust. 

Facts:

Plaintiffs, trust beneficiaries, filed suit against defendants trustee and settlor in the Superior Court, New Hanover County (North Carolina), alleging a breach of fiduciary duty and seeking an accounting. Defendants filed a motion for a protective order from the beneficiaries' discovery requests, which the trial court granted. The trial court ultimately granted defendants' motion for summary judgment, and the beneficiaries appealed. The beneficiaries, who were the children of the settlor and grandchildren of the trustee, alleged that the trustee had allowed the settlor to control of the assets of the trusts and invest them in highly speculative personal business ventures, depreciating the trusts' assets. The trusts provided in part that the trustee was not required to prepare or file any inventory, appraisal, or regular or periodic accounts or reports with any court or beneficiary, but he may from time to time present his accounts to an adult beneficiary or a parent or guardian of a minor or incompetent beneficiary. The trial court granted a protective order to defendants based on this language. 

Issue:

Did the trial court err in its interpretation of the N.C. Trust Code that recognizes that a trustee generally has a duty to account for the trust property to the beneficiaries?

Answer:

Yes

Conclusion:

The court held that the information sought by the beneficiaries was reasonably necessary to enable them to enforce their rights under the trust. N.C. Gen. Stat. § 36C-8-813 did not override the duty of the trustee to act in good faith, nor could it obstruct the power of the trial court to take such action as was necessary in the interests of justice, pursuant to N.C. Gen. Stat. § 36C-1-105(b)(2)(9) (2009), including compelling discovery where necessary to enforce the beneficiary's rights under the trust.

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