Being a Trustee of a trust is no easy task. Trust assets need to be managed, accountings and reportings need to be prepared and filed, and the trust scheme for distributions needs to be followed. Trustees also have fiduciary duties – duties of loyalty, care, and prudence. But to whom does a Trustee owe a duty? Could it be to a creditor? Also, what happens if an Agent lets bills go unpaid? Is the Agent liable?

These issues were recently litigated in Brownell v. Johnson. Kathleen Brownell filed suit against Scott Johnson, who was her former stepson, on the argument that he intentionally interfered with her contract for alimony payments. Kathleen and Phillip were married in 1994. During the marriage, Phillip’s health took a turn for the worse and so he engaged in proactive Medicaid planning. A trust was drafted and Phillip funded the trust with all of his assets. Phillip was the initial Trustee, and Scott was the successor Trustee. Scott and his brothers were remainder beneficiaries.

A few years later, Kathleen and Phillip got divorced. As part of the stipulated decree, Phillip agreed to pay Kathleen alimony of $1,600 per month until one of them died. Phillip made such payments to Kathleen until he transitioned into a nursing home. Scott, acting as Agent under Power of Attorney for Phillip, continued to make the alimony payments to Kathleen. Scott then petitioned to have the alimony contract terminated or modified, and stopped making the payments to Kathleen altogether. After phone calls and other attempts to get Scott to resume payments to her failed, Kathleen filed the instant suit against Scott, alleging intentional interference with a contract.

Reading that another attorney has been disbarred is never good news; we don’t delight in the misery of others. But we can learn lessons from their mistakes. Let’s take a deeper dive into The North Carolina State Bar v. Erickson to see how we can more understand how to better serve clients.

Ms. Erickson was admitted to the North Carolina State Bar in 2015. She began her career at a law firm, but was discharged in 2018 after certain grievances were filed against her with the State Bar. Those grievances are as follows:

Complaint 1:

Ms. Erickson represented Client 1 in a proceeding to sell the home of Client 1’s deceased husband. Ms. Erickson attempted to notify Client 1’s children and obtain their consent to the sale of the home. In a meeting with Ms. Erickson, Client 1 presented a man that Client 1 claimed to be her son. The man signed the required document and Ms. Erickson notarized it. The man was, in fact, not Client 1’s son. Ms. Erickson did not check the man’s identification upon notarization.