Harrell v. Badger

Rita Wilson's will created a trust for her son David, naming Harrell and Dake (plaintiffs) as trustees with power to invade principal for David's support and naming Harrell and Dake as remainder beneficiaries when David died. After disputes, David had Badger (defendant), his neighbor, appointed trustee instead; to help David qualify for government benefits, Badger transferred the trust's assets into a sub-account of a pooled special-needs trust (the FFSNT) whose joinder agreement redirected any funds remaining at David's death to other FFSNT beneficiaries, eliminating Harrell and Dake's remainder interest, all without court approval or notice to them. Badger also had his realtor wife sell the trust's main asset, a house, paying her a 5% commission and wiring proceeds into the FFSNT, whose administrators later misappropriated the funds and were imprisoned. When Badger later moved to terminate the original trust and disclosed the transaction, Harrell and Dake counter-petitioned for breach of trust; the trial court sided with Badger, retroactively approved the self-dealing sale, and awarded him roughly $85,000 in attorney's fees, prompting their appeal.