Thursday, Jan 19,2012, 04:16PM

On August 18, 2010, following a twenty-nine-day trial, Judge Gary Cassavechia of the Hillsborough County Probate Court issued an order dismissing the petitioners’ claims in the matter of Shelton v. Tamposi.  Petitioner Elizabeth Tamposi, one of six children of Samuel Tamposi, challenged the terms of trusts that her father established to benefit his children and grandchildren after his death. Samuel Tamposi named two of his sons as investment directors and authorized them to manage operations of the Tamposi Company, a family business focused largely on commercial real estate. Samuel Tamposi specified that a major portion of the trusts’ portfolios could be held in real estate. At the time of trial, the Tamposi Company’s assets were valued at $146 million.

                 Frank Kenison, Lisa Lee and John Alexander represented two Tamposi siblings who intervened in the action Elizabeth Tamposi and her trustee brought against the investment directors, and they played an integral role in the joint defense. The petitioners alleged, in part, that the investment directors breached their fiduciary duties by failing to adequately diversify the trusts’ holdings. Along with other relief, they asked the court to remove the investment directors and to require the other beneficiaries to buy out Elizabeth Tamposi’s interest in the trusts. Prior to trial, Ransmeier & Spellman briefed an argument that by bringing this action Elizabeth Tamposi violated the trusts’ “in terrorem” or “no-contest” clause, which stated that anyone who brought a legal challenge to any provision of the trusts automatically forfeited all interest in the trusts.

                No-contest clauses are controversial, and have been rejected or limited in a number of jurisdictions. New Hampshire has been clear, however, that the settlor’s intent is the sovereign guide in construing a trust, unless that intent is contrary to a statute or to public policy. In addition to finding that the investment directors greatly increased the trusts’ assets while providing substantial income for the beneficiaries, the probate court ruled that Elizabeth Tamposi violated the no-contest clause. It dismissed her action, ordered her to return all amounts received from the trusts since the institution of the litigation, and granted an award of attorney fees.

                The court’s order represents a resounding victory for our clients, and makes several significant rulings in areas of trust law that have been less than fully settled. It confirms the principle that one who voluntarily gives money in trust to another may condition that gift on the beneficiary accepting it without complaint, and without depleting trust resources and causing family strife by challenging the terms of the gift.  In addition, the ruling confirms that a settlor’s desire to keep a family business going into the future is not contrary to public policy, and can justify limiting the diversification of trust assets.

                Elizabeth Tamposi and her trustee, Julie Shelton, both appealed the court’s order to the New Hampshire Supreme Court.  Tamposi subsequently withdrew her appeal with prejudice, but Shelton has maintained her appeal. Ransmeier & Spellman participated in briefing the arguments in support of the court’s order. The parties expect the Supreme Court to schedule oral argument on the case in the spring of 2012.