Berlinger v. Wells Fargo, N.A., Case No. 2:11-cv-459-FtM-29CM, 2015 WL 6125529 (M.D. Fla. Oct. 16, 2015)

- Discretionary distributions to beneficiary which were used in part to satisfy alimony obligations were not improper

- Facts: Rose Berlinger, her husband, and her mother each created trusts for the lifetime benefit of Rose’s son Bruce and his descendants. Wells Fargo Bank served as trustee of each of the trusts. Under the terms of the trust instruments, the corporate trustee could make distributions to Bruce of trust principal as the trustee deemed appropriate in its discretion. The trusts also granted the trustee broad discretion as to the nature of trust investments. Each of the trusts contained a spendthrift clause prohibiting the assignment of a beneficiary’s interest in the trust.

Bruce’s three children sued Wells Fargo in the U.S. District Court for the Middle District of Florida alleging breaches of fiduciary duty related to the distribution and investment of trust assets. The plaintiffs alleged Wells Fargo improperly made distributions to Bruce knowing Bruce would use a portion of the funds to pay his alimony, thereby ultimately benefiting Bruce’s ex-wife who was not a trust beneficiary. Additionally, the plaintiffs alleged Wells Fargo improperly paid Bruce, as a trust investment, $2 million for a one-third interest in his personal residence (allegedly with a fair market value of only $700,000) to allow Bruce to make his required $2 million lump sum alimony payment.