We’ve previously looked at the question of who needs to be joined as a party to trust litigation. In blogging about a petition for accounting in Illinois in which all trust beneficiaries were not named as parties, we said:
Failure to Join Necessary Parties. Not all of the contingent trust beneficiaries were parties to the lawsuit. If they were all joined to the lawsuit, the federal court would lack jurisdiction to hear the case because there would not have been diversity jurisdiction insofar as the suit wouldn’t have been between citizens of different states. The Court, therefore, had to determine whether all trust beneficiaries were required to be parties to a lawsuit for an accounting. By the very nature of the claim for an accounting, the other trust beneficiaries were not necessary parties. First, complete relief could be accorded among the plaintiffs and the trustee without joinder of the other beneficiaries. Second, the other beneficiaries’ ability to protect their interests would not have been impaired by their absence from the case.
We intentionally distinguished that situation from one where trust beneficiaries are seeking to remove a trustee. In that type of case, all beneficiaries likely would need to be joined as parties because removal of a trustee affects everyone.
What about deciding whether a no-contest clause in a trust was triggered? Do all trust beneficiaries need to be joined as parties to that type of litigation?
In Graves v. Vitu, a federal court in Virginia weighed in on that question when it tossed from federal court the latest chapter in multi-generational litigation between the descendants of Colonel Theodore Clay Northcott, founder of the famous Luray Caverns tourist attraction. (more…)