Wisconsin Trust Administration: Wasteful and Needless Litigation Impacts on Trust Proceeds

In Wisconsin, the general rule is that each party to litigation pays for their own attorney fees. There are a few notable exceptions to this rule, however, and a recent decision by the Wisconsin Court of Appeals, affirming the circuit court’s findings, ruled that a beneficiary who filed numerous baseless lawsuits regarding the administration of two trusts caused unnecessary fees and expenses to be incurred. Those fees and expenses were ordered to be taken from the beneficiary’s portion of the proceeds from the trusts. While this case is an exception to the rule, a beneficiary would do well to consider it before bringing actions against an estate.

Overview of the Case

In Greg Griswold v. Kathy Thompson, 2021AP685, one of the beneficiaries, Greg Griswold, filed numerous lawsuits, totaling approximately 59 motions and petitions, regarding the administration of his Aunt’s two trusts. Griswold’s legal actions prolonged the administration of the trusts and forced the trustee to pay over $70,000 in attorney fees. These delays and expenses would otherwise have reduced the other beneficiaries’ distributions. The circuit and Appellate courts both concluded that virtually all of his claims were not founded on any substantive issue. Wisconsin’s Trust Code expressly gives the court authority to award attorney fees to be paid by a party who causes unnecessary fees to be incurred during the administration of a trust, including litigation necessary to complete it. Wis. Stat. §701.1004(1) states that “[i]n a judicial proceeding involving the administration of a trust, the court, as justice and equity may require, may award costs and expenses, including reasonable attorney fees, to any party, to be paid by another party or from the trust that is the subject of the controversy.” The Appellate Court in Griswold agreed with the circuit court’s reasoned statements that the authority under § 701.1004(1) to award attorney fees to be paid by Griswold was not overcome by any provisions in the trusts and upheld the court’s determination to have the amount of expenses and attorney fees incurred by the trustee due to Griswold’s wasteful and needless litigation paid by Griswold and taken from his share of proceeds from the trusts.

Wisconsin Trust Administration

With respect to trust administration in Wisconsin, a trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries (Wis. Stat. § 701.0801). If a trust has multiple beneficiaries, the trustee shall act impartially in investing, managing, and distributing the trust property, giving due regard to the beneficiaries’ respective interests and the purposes and terms of the trust (Wis. Stat. § 701.0803).

In Griswold, the trustee had begun her administration of the trusts’ assets, per the distribution of assets provisions in the trusts, but was forced to delay the rest of the distribution until the litigation brought by Griswold was settled. The Appellate Court agreed with the circuit court’s conclusion that the trustee’s conduct, of which Griswold complained, was entirely proper and certainly did not constitute any breach of her fiduciary duties. Griswold complained about actions that were perfectly legal and reasonable under the circumstances of the case and did not present the court with proof of wrongdoing or even sufficient factual allegations.

Due to the vast amount of unsubstantiated claims, motions, and petitions that Griswold made, the court determined that his actions rose to the level of wasteful and needless litigation. As such, the court ruled Griswold would be liable for the payment of the attorney fees and expenses associated with the litigation, and such amount would be taken from his share of the proceeds from the trusts.

This case serves as a warning to beneficiaries to avoid “wasteful and needless litigation.” However, many disputes related to the administration of trusts are warranted. Alternatively, you may be the trustee or personal representative of an estate and are facing a lawsuit or threat of a lawsuit from one or more beneficiary. By seeking the counsel of a Wisconsin Trust and Estate Attorney, you can ensure that any issues are properly developed and with merit.

If you have any questions about the administration of a trust or need assistance in protecting your beneficiary rights, please reach out to one of our trust and probate attorneys at [email protected] or 262-334-3471. Our attorneys frequently provide legal services, including estate planning and probate and trust administration, to clients living in West Bend and the surrounding communities of Slinger, Germantown, Kewaskum, Port Washington, Menomonee Falls, Milwaukee, and throughout Washington County, Sheboygan County, Dodge County, Ozaukee County, Waukesha County, Wisconsin.

Originally published: April 4, 2025.