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Don’t Sit on the Sidelines. Get in the Game!

“A party receiving notice who fails to participate in court-ordered mediation is bound by the result.”

You can’t win if you don’t play.  This maxim is highlighted by the recent court ruling in Breslin v. Breslin, which states that non-participation in mediation can forfeit one’s rights.  In Breslin, multiple potential beneficiaries of a trust received formal notice of an upcoming court-ordered mediation.  Despite receiving the notification letters, several beneficiaries chose not to attend.  The result?  Those parties lost their right to a trial.

The main issue in Breslin was ambiguity over the correct beneficiaries of the trust.  The trust named the trustee and several of his family members as beneficiaries, then stated that the remaining beneficiaries – all charities – were listed on “Exhibit A.”  Exhibit A was missing, and the trustee never found it.  Instead, the trustee found a document titled “Estate Charities” in the trust creator’s estate planning binder.  This document listed twenty-four separate charitable organizations.  The trustee filed a Petition with court to confirm the beneficiaries of the trust, and sent notice of the Petition to all of the charities listed on the “Estate Charities” document.

The court ordered the parties to mediation.  The trustee, several of his family members, and five of the charities showed up.  These parties hammered out an agreement, which included significant payments to the trustee and several of his family members.  Unsurprisingly, some of the non-participating beneficiaries didn’t like the settlement when it was presented to court for approval.  The non-participants weren’t there to fight for their shares, so the parties at the table split the pie to favor their own interests.

The non-participants objected to the settlement, but the trial court affirmed it despite the objections.  The non-participants appealed, arguing that they had a right to a voice in the matter and to their day in court.  The Court of Appeals rejected this argument.  The Appeals court affirmed the lower court’s order, reasoning that the non-participating parties had forfeited their interest in the matter and waived their right to a trial by failing to participate in the court-ordered mediation.

Here’s the key takeaway from Breslin: trust beneficiaries or prospective beneficiaries may lose their rights if they fail to participate in the litigation process, specifically in a court-ordered mediation.  In the words of the court, parties “may not refuse to participate and then complain that they received nothing.”

If you have a possible interest in a Will or a Trust that is being litigated, don’t hesitate to contact us to discuss your options.  Sitting back as a spectator may force you to accept an outcome you don’t like.

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