Settlor’s Attempt to Relieve Trustee’s Duty to Account Deemed Ineffective

Maryland Case: A husband and his wife jointly created a revocable trust. The husband died first and under the trust terms, one-half of the property was divided into two trusts. The surviving spouse had a general power of appointment over one and a special power of appointment over the other, was sole income beneficiary during her life, and had the discretion as the trustee to distribute up to the entire principal for her health, maintenance, or support. A son of her husband is a taker in default of the exercise of either power if he survives the surviving spouse. The trust also contains language purporting to prevent the trustee being required judicially to account. The court affirmed the lower court’s order requiring the trustee to account. The court held that the son had a future interest in the trust which entitled him to demand an accounting and that the language eliminating the duty to account was of no effect.
Johnson v. Johnson, No. 126, 2009 WL 608342 (Md. Ct. Spec. App. 2009).