Court Opinion

ID: 9474342
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:55:04.244069+00
Date Added: 2024-06-11T17:44:02.245917
License: Public Domain

CUDAHY, Circuit Judge,
dissenting.
Focusing on the end result of this will contest — the objectors won and the named beneficiary received but a small settlement — the majority concludes that the estate’s trustee should have filed a conditional claim tolling the statute of limitations. But only judges seem to be blessed with perfect hindsight and today’s ruling places trustees in a dilemma.
A trustee has a fiduciary duty to the named beneficiary in a will. While some states may have modified this general rule, there is no evidence that Wisconsin has. See Estate of Hoyt, 22 Wis.2d 209, 214, 125 N.W.2d 350, 353 (1963) (“[T]he executor is under no obligation to defend the estate distribution scheme. His role as trustee for the beneficiaries and creditors requires him to defend their interests against claims made by persons outside the class reached by his position of trust.”) The named beneficiary in Helen Safran’s will was indisputably Bernard. When the will contest began, First Wisconsin was legally obligated to act in Bernard’s best interests.
The majority suggests that a fiduciary may risk disadvantaging the named beneficiary when there is a “high probability” that that beneficiary will be supplanted. But a trustee that acts on a “high probability” acts at his peril. If he is wrong and the named beneficiary survives as such, the trustee may well face a suit for breaching his fiduciary duty.1
Indeed, in this case it is by no means clear that the probabilities were high that Bernard would lose. Bernard was not found guilty of murder and thus the murdering heir rule did not clearly apply. The Wisconsin Supreme Court ruled that the murdering heir rule would not apply to reckless homicide unless there was additional evidence showing intent to kill. The objectors must have been somewhat uncertain about their ultimate chances of winning in court because they agreed Bernard should receive a share of the estate in settlement.
I agree that filing a conditional claim would have benefited the objectors. But at the time when it could have filed a conditional claim, First Wisconsin could not have assumed that aiding those who would strip Bernard of his inheritance would have benefited Bernard. If a conditional claim would not have helped Bernard, First Wisconsin would have breached its fiduciary obligation even if it would have hurt Ber*1313nard only “a little.” But a conditional claim was likely to hurt Bernard more than “a little” since it gave the IRS additional time to pore over the estate searching for vulnerabilities.
To the extent the estate could not have prevented the loss of the objectors’ deduction, the majority concludes, there is a defect in Wisconsin law for which the objectors will have to suffer. The majority sees protection of tax revenue as paramount. But, as the majority concedes, cases like this are at least rare as the murder of mothers and cumulatively pose a negligible threat to the national fisc. The majority’s result harshly penalizes the objectors although they are totally without fault and allows the government to pocket a $100,000 windfall. I therefore respectfully dissent.

. Before this decision, a trustee’s obligations were simple and clear. Now, a trustee is forced to guess to whom he is obligated. If he acts in the contestants’ interest and the named beneficiary wins, the named beneficiary can sue. And, if the will contestants are owed some duty on the theory that there is a high probability they will win, they can sue if the trustee maintains undivided fidelity to the named beneficiary.