Shurtleff v. UEP Trust, 2012 UT 47

In Shurtleff v. The United Effort Plan Trust, 2012 UT 47 (filed August 3, 2012), the Utah Supreme Court upheld a probate court ruling that the State of Utah must make an interim payment of approximately $5.7 million in trustee fees and other expenses to the court-appointed Special Fiduciary of the United Effort Plan Trust.

The Court held that Utah Probate Code section 75-7-1004(1) authorizes the payment of trustee fees from a source other than the trust assets.  Section 75-7-1004(1) reads:

“In a judicial proceeding involving the administration of a trust, the court may, as justice and equity may require, award costs and expenses, including reasonable attorney’s fees, to any party, to be paid by another party or from the trust that is the subject of the controversy.”

Notwithstanding that the language of section 75-7-1004(1) appears to contemplate payment of litigation expenses, the Court focused on the “justice and equity” language in the statute to hold that the payment of fees and expenses was appropriate because (1) the Special Fiduciary was appointed by the probate court at the Utah Attorney general’s request, (2) the Special Fiduciary is effectively unable to liquidate trust assets to pay its fees and expenses, and (3) the inability to obtain payment from the trust was in part attributable to the Attorney General’s actions.

The Court noted that the Special Fiduciary’s actions have increased the value of the trust assets by more than the amount of the fees and expenses, that the fees and expenses amounted to less than 10% of the value of the trust, and that the State could expect reimbursement from the trust when the trust assets are eventually liquidated.

For an in-depth discussion of how Utah trustee fees are calculated in practice, go to Utah Trustee Fee Survey Results on this website.

Rust Tippett is the author of this blog post.

Copyright 2013 UNLEPI, LLC, a Utah limited liability company.  All Rights Reserved.

This blog post in no way creates an attorney-client relationship between the reader and either Robert S. (Rust) Tippett or Bennett Tueller Johnson & Deere, P.C.  The reader should consult with his or her own estate planning attorney regarding his or her particular circumstances.


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