Third-Party Beneficiary of Estate Plan Can Sue in Tort and Contract For Drafting Errors.

An estate plan was established for the decedent which, upon the death of the decedent's surviving spouse, resulted in one-half of the trust property passing to the children of the surviving spouse and one-half passing to the decedent's brother.  Upon the brother's subsequent death, the trust specified that the one-half of the balance in the trust would pass to his child.  Had the brother not survived the decedent, one-quarter of the trust property would pass to the brother's child and one-quarter would pass to the child of a predeceased brother.  Given the fact that the brother outlived the decedent, the child of the predeceased brother received nothing.  However, two of the three trustees and the decedent's financial advisor testified that the trust did not carry out the decedent's desire to treat the children of the brothers equally.  The child of the predeceased brother sued to reform the trust, and the matter resulted in a settlement.  The child of the predeceased brother also brought a malpractice and breach of contract claim against the drafter of the trust.  The trial court dismissed the claim, but the state Supreme Court reversed, recognizing that a third-party beneficiary of an estate plan can sue the drafter in tort and contract when the drafting error "defeats or diminishes the client's intent."  Fabian v. Lindsey, No. 2012-213726, 2014 S.C. LEXIS 470 (S.C. Sup. Ct. Oct. 29, 2014).

CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

RSS​ Facebook Twitter