Background
George J. Kubat retained attorney Thomas R. Pansing in 2009 to draft his revocable trust and will. Over the following years, Pansing prepared several amendments, initially providing for a $500,000 bequest to Maureen Walsh, George’s girlfriend. In April 2021, while hospitalized after suffering heart attacks and on life support, George directed Pansing to dramatically increase Walsh’s bequest. Pansing’s office drafted amendments raising the bequest from $1 million to $3 million on April 6, then to $6 million on April 12. George executed a new will on April 12 that same day, married Walsh that afternoon, and died that evening on life support.
George’s children challenged the validity of the April 12 Trust amendment and will on grounds of testamentary incapacity and undue influence. Following a jury trial in September 2023, the jury found George had testamentary capacity but was unduly influenced by Walsh to execute both the April 12 amendment and the will—those documents were invalidated. Christine K. Reilly, one of George’s four children, participated individually in that litigation and incurred attorney fees. She then demanded that Security National Bank, appointed as trustee and special administrator, sue Pansing for attorney malpractice to recover litigation costs. Security National declined, stating such action would not be in the best interests of the Trust or Estate.
Reilly subsequently filed suit individually and derivatively on behalf of both the Estate and the Trust, seeking to recover the attorney fees she had personally incurred. Pansing and his firm moved for summary judgment on standing and duty grounds. The district court granted summary judgment, finding Reilly lacked standing to pursue derivative actions and that the attorneys owed no duty to her as a non-client.
The Court’s Holding
The Nebraska Court of Appeals affirmed summary judgment. On the critical issue of standing, the court held that Reilly had standing to sue in her individual capacity—she had personally participated in the underlying litigation, retained her own counsel, and incurred fees. However, the court found she had no standing to bring derivative actions on behalf of either the Estate or the Trust.
Regarding derivative standing on behalf of the Estate: Under Nebraska’s Probate Code, only the appointed personal representative or special administrator has the right and duty to sue and recover assets for an estate. Although pre-Uniform Probate Code Nebraska law permitted heirs to maintain actions when an administrator refused to act, the court determined this exception does not apply because Reilly had two statutory mechanisms available: she could petition to remove Security National as special administrator for cause, or she could seek appointment of a special administrator solely to bring the malpractice action. The court emphasized that Reilly pursued neither option and failed to demonstrate that Security National’s refusal to participate was improper—Security National had reasonably determined the action was not in the Estate’s best interests.
On derivative standing for the Trust: The trustee, not beneficiaries, is the proper person to sue on behalf of a trust. Although beneficiaries may occasionally sue when the trustee cannot or will not act, they must show the trustee is improperly refusing or neglecting to bring an action. Reilly’s demand to Security National was declined, but she presented no evidence that the refusal was improper. The court found that even assuming a derivative action were permissible under Nebraska’s Uniform Trust Code, Reilly failed to meet her burden of proving improper conduct by the trustee.
Key Takeaways
- Heirs and beneficiaries lack standing to sue on behalf of an estate or trust unless they are the appointed representative or can demonstrate the representative is improperly refusing to act.
- An appointed personal representative or trustee’s good-faith business judgment to decline litigation—even when requested by a beneficiary—does not constitute improper conduct that would permit a beneficiary to supersede the representative’s authority.
- Beneficiaries who disagree with a representative’s decisions have statutory remedies (removal petitions, appointment of successor representatives) rather than unilateral rights to litigate on the entity’s behalf.
- Attorneys do not automatically owe duties to non-clients, even those who are indirect beneficiaries of the attorney’s work.
Why It Matters
This decision reinforces strict gatekeeping principles in probate and trust administration. Even though Reilly was harmed by Pansing’s conduct—he drafted documents that a jury found were procured through undue influence—she cannot recover against the attorney because she was neither a client nor the proper legal representative to sue on behalf of the decedent’s estate. The holding protects the integrity of probate administration by preventing individual beneficiaries from circumventing appointed fiduciaries and pursuing collateral claims.
For estate planning practitioners, the decision clarifies that liability exposure for drafting challenged documents is limited primarily to claims brought by the estate or trust through their appointed representatives. It also underscores the importance of fiduciaries making sound independent judgments about whether to pursue professional negligence claims against drafting counsel—courts will defer to those judgments absent clear evidence of impropriety. Beneficiaries dissatisfied with such decisions must pursue removal or succession of the fiduciary rather than attempting to litigate independently.