## Facts

- Hazel M. King executed a revocable inter vivos trust in 1987 and named Riggs National Bank of Washington, D.C. (Riggs) and Sanford Goldstein as cotrustees.
- The trust provided lifetime distributions for King (and contemplated distributions for her husband) to maintain their accustomed standard of living.
- The trust was a “pourover” arrangement: upon King’s death, the remaining principal and any accumulated, undistributed income were to be paid to the personal representatives of King’s estate for distribution under King’s will.
- The trust required the trustees, upon termination, to prepare a final account and deliver it to the personal representatives of King’s estate (and to the grantor’s agent(s)).
- King died in 1991. The trust remainder—about $1.6 million—comprised the bulk of the probate estate.
- The personal representatives of the estate were Riggs, Goldstein, and Lillian Malins (a long-time secretary to Goldstein’s father).
- King’s sister, niece, and nephew (King’s family) were the residuary legatees under King’s will.
- King’s family sought a final trust accounting and questioned the amount of compensation the trustees had paid themselves from trust assets.
- Riggs and Goldstein did not provide the final accounting to the residuary legatees in response to their demand.
- King’s family pursued relief in two places:
  - In probate court, they objected when the personal representatives attempted to close the estate and sought an accounting as part of that proceeding.
  - In a separate civil action, they sued Riggs and Goldstein in their capacity as trustees, seeking a final accounting and challenging trustee compensation.
- The probate court indicated that the personal representatives were required to provide King’s family with an accounting, but held its order in abeyance pending the civil action.
- In the civil case, the trial court granted summary judgment for Riggs and Goldstein, concluding that the residuary legatees could not sue the trustees directly because they were not trust beneficiaries.
- King’s family appealed to the District of Columbia Court of Appeals.

## Issues

1. Whether residuary legatees under a will may bring a direct civil action against the trustees of an inter vivos pourover trust for a final accounting and review of trustee compensation, when the trust directs that the final accounting be delivered to the estate’s personal representatives.
2. Whether the accounting must be sought first through the probate proceeding, using the estate’s fiduciary structure rather than a separate civil suit against the trustees.

## Decision

- The District of Columbia Court of Appeals held that the residuary legatees could not maintain a direct civil action against the trustees for the trust accounting.
- The court held that any request for the trust accounting had to be pursued in the first instance through the probate proceedings, where the personal representatives are the appropriate parties to receive the accounting and take action regarding it.
- The court affirmed the trial court’s disposition in favor of the trustees, while noting that, given the court’s analysis, it was at least arguable the more precise disposition would have been dismissal rather than entry of judgment.

## Legal Principles

- When an inter vivos trust provides that, on the settlor’s death, the trust remainder is paid to the estate’s personal representatives for distribution under the will, the trustees’ post-termination duty to account runs primarily to the personal representatives designated to receive that remainder.
- Residuary legatees generally may not bypass the estate’s administration by suing pourover-trust trustees directly for an accounting that the trust instrument directs to the personal representatives.
- Probate is the proper initial forum for resolving disputes about the administration and collection of assets that pour over into the estate, including obtaining and acting on a trust’s final accounting.
- The trust’s direction that the accounting be delivered to personal representatives reflects an intent that the personal representatives use their statutory and fiduciary powers to review the accounting and, if warranted, seek remedies on behalf of the estate.
- Parallel civil litigation over the same accounting dispute may be rejected where the probate proceeding provides the channel for obtaining the accounting and addressing alleged overcompensation.

## Conclusion

Because King’s trust terminated into her probate estate and required the trustees to deliver the final accounting to the estate’s personal representatives, the residuary legatees could not sue the trustees directly in a separate civil action for an accounting or to contest trustee compensation; they had to seek relief first in probate through the personal representatives and the probate court’s supervision of estate administration.


Rearden v. Riggs National Bank, 677 A.2d 1032 (1996)