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Home / Courts / Trusts & Estates – Trust – Beneficiaries – Necessary Parties – Rule 19

Trusts & Estates – Trust – Beneficiaries – Necessary Parties – Rule 19

Hasselman v. Barnes. (Lawyers Weekly 10-07-0954, 5 pp.) (Donna S. Stroud, J.). Appealed from New Hanover County Superior Court (Jay D. Hockenbury, J.). N.C. App. Click here for the full text of the opinion.

Holding: The trial court erred in granting partial summary judgment to the plaintiff because four beneficiaries whose interests will be affected by this action were not included as parties and the trial court should have required their joinder.

Facts

The plaintiff filed a complaint in which she alleged that she is one of seven named beneficiaries of a trust for which the defendants are the trustees. The plaintiff’s causes of action against the defendant-trustees were breach of fiduciary duty, constructive fraud and gross negligence.

Four beneficiaries of the trust were not parties to the case. One named defendant answered the plaintiff’s complaint. The plaintiff moved for partial summary judgment against that defendant. The trial court granted the plaintiff’s motion.

The defendant appealed.

Analysis

Although neither party raised the issue of whether all of the beneficiaries of the trust are necessary parties to this action under G.S. § 1A-1, Rule 19, that question must be addressed first.

When dealing with a trust, the general rule in suits respecting the trust property, brought either by or against the trustees, is that beneficiaries as well as the trustees are necessary parties. The record does not include any appearance by the other four beneficiaries or any indication that they have notice of this lawsuit.

Because four beneficiaries whose interests will be affected by this action were not included as parties, the trial court should have required joinder of all necessary parties. We express no opinion on the merits of this case but instead reverse the partial summary judgment order and remand for further proceedings not inconsistent with this opinion.

Reversed and remanded.


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