Trial Court Properly Dismissed Claims Alleging Executor Breached Fiduciary Duty Because She Was Also a Beneficiary.

A decedent left his property, in trust, for his wife and nephews. He also named his wife as the trustee of the trust. A dispute arose between the wife and the nephews regarding her administration of the trust. They filed an action against the wife, arguing that she had an impermissible conflict of interest as both the trustee and the beneficiary. They also argued that the wife breached her fiduciary duties to them in the way she valued the units of a partnership in which the nephews had an interest and in acting hostilely toward them. The trial court dismissed the nephews’ claims and granted relief to the wife as to her counterclaim that the nephews acted in bad faith toward the trust in their administration of the partnership. On appeal, the court affirmed. The decedent created the trust knowing that the wife would be both beneficiary and trustee. Therefore, he condoned this conflict.  The trial court’s finding that the wife acted in good faith in her administration of the trust and did not engage in self-dealing was supported by the evidence. Even if the trial court was required to strictly scrutinize the wife’s actions, the nephew’s did not show that the trial court failed to do so.  The record also supported the trial court’s conclusion that the nephews operated the partnership as though they owned it outright. They intentionally and improperly kept financial records from the wife. Fanetti v. Donald A. & Marilyn J. Fanetti 2004 Rev. Tr., No. 2013AP1870, 2014 Wisc. App. LEXIS 330 (Wisc. Ct. App. Apr. 22, 2014).

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