Connecticut General Statutes 45a-543 – Determination by court re abuse of discretion by fiduciary
(a) A court shall not change a fiduciary‘s decision to exercise a discretionary power conferred by sections 45a-542 to 45a-542ff, inclusive, unless it determines that the decision was an abuse of the fiduciary’s discretion. A court shall not determine that a fiduciary abused its discretion merely because the court would have exercised the discretion in a different manner or would not have exercised the discretion.
Terms Used In Connecticut General Statutes 45a-543
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: means a person that (A) has a present or future beneficial interest in a trust, vested or contingent. See Connecticut General Statutes 45a-499c
- Court: means a court of this state having jurisdiction over the matter pursuant to sections 45a-499o and 45a-499p or a court of another state having jurisdiction under the law of the other state. See Connecticut General Statutes 45a-499c
- Fiduciary: A trustee, executor, or administrator.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
(b) The decisions to which subsection (a) of this section applies include: (1) A determination under subsection (a) of § 45a-542c of whether and to what extent an amount should be transferred from principal to income or from income to principal; and (2) a determination of the factors that are relevant to the trust and its beneficiaries, the extent to which they are relevant, and the weight, if any, to be given to the relevant factors, in deciding whether and to what extent to exercise the power conferred by subsection (a) of § 45a-542c.
(c) If a court determines that a fiduciary has abused its discretion, the remedy is to restore the income and remainder beneficiaries to the positions they would have occupied if the fiduciary had not abused its discretion, according to the following rules: (1) To the extent that the abuse of discretion has resulted in no distribution to a beneficiary or a distribution that is too small, the court may require the fiduciary to distribute from the trust to the beneficiary an amount that the court determines will restore the beneficiary, in whole or in part, to his or her appropriate position; (2) to the extent that the abuse of discretion has resulted in a distribution to a beneficiary that is too large, the court may restore the beneficiaries, the trust, or both, in whole or in part, to their appropriate positions by requiring the fiduciary to withhold an amount from one or more future distributions to the beneficiary who received the distribution that was too large or requiring the beneficiary to return some or all of the distribution to the trust; and (3) to the extent that the court is unable, after applying subdivisions (1) and (2) of this subsection, to restore the beneficiaries, the trust, or both, to the positions they would have occupied if the fiduciary had not abused its discretion, the court may require the fiduciary to pay an appropriate amount from its own funds to one or more of the beneficiaries or to the trust, or both.
(d) Upon a petition by the fiduciary, the court having jurisdiction over the trust or estate may determine whether a proposed exercise or nonexercise by a fiduciary of a discretionary power conferred by sections 45a-542 to 45a-542ff, inclusive, will result in the abuse of the fiduciary’s discretion. If the petition describes the proposed exercise or nonexercise of the power and contains sufficient information to inform the beneficiaries of the reasons for the proposal, the facts upon which the fiduciary relies, and an explanation of how the income and remainder beneficiaries will be affected by the exercise or nonexercise of the power, a beneficiary who challenges the proposed exercise or nonexercise has the burden of establishing that it will result in an abuse of discretion.