Wells Fargo Bank, N.A. v. Rose McNeill

• Court: Court of Appeals of Georgia
• Decided: October 29, 2025
• Docket: A25A1421
• Status: Published

Opinion

SECOND DIVISION RICKMAN, P. J., GOBEIL and DAVIS, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. https://www.gaappeals.us/rules

October 29, 2025

In the Court of Appeals of Georgia A25A1421. WELLS FARGO BANK, N.A. v. MCNEILL. A25A1422. MCNEILL et al. v. MCNEILL.

RICKMAN, Presiding Judge.

Following a bench trial, the trial court issued an order in which it concluded

that Wells Fargo Bank, N. A., as trustee, had misinterpreted certain language in a trust

established in the Last Will and Testament of David A. McNeill, Jr., and ordered that

numerous distributions be made to one of the trust beneficiaries, Rose McNeill. In

Case No. A25A1421, Wells Fargo appeals and contends, inter alia, that the trial court

erred by substituting its judgment for that of the trustee in the absence of a finding of

bad faith or abuse of discretion. In Case No. A25A1422, Jack R. McNeill, Judith K.

McNeill, Donald T. McNeill, Virginia Ruth McNeill Vaughn, and the D. T. McNeill

Foundation (the “remainder beneficiaries”) appeal from the same trial court order. They contend, inter alia, that the trial court erred by ordering distributions of trust

principal to Rose McNeill when Wells Fargo did not abuse its discretion in denying

her requests for those distributions. For the reasons that follow, we reverse.

“The trial court is the trier of fact in a bench trial, and its findings will be

upheld on appeal if there is any evidence to support them.” (Citation and punctuation

omitted.) Rose v. Waldrip, 316 Ga. App. 812, 815 (1) (730 SE2d 529) (2012). As

recognized by the trial court, the record shows that in his September 15, 1999 Last

Will and Testament, David A. McNeill, Jr. bequeathed stock, his residence, and other

items to his wife from a second marriage, Rose McNeill. He also made several

bequests to his three sons from his first marriage, David A. McNeill, III, Jack R.

McNeill, and Donald T. McNeill. Pursuant to Item X of his will, the remainder of his

property was bequeathed to First Union National Bank of Georgia, as trustee,1 with

the following pertinent instructions:

a) The Trustee shall pay to my wife, ROSE MARIE McNEILL, all income from the property, in monthly installments, from the time of my death until her death.

1 In 2001, First Union merged with Wachovia, and Wachovia Corporation assumed First Union’s duties as trustee. In 2008, Wachovia merged into Wells Fargo, and Wells Fargo became the trustee. 2 b) The Trustee may also encroach on the principal of this trust at any time and from time to time in such amounts as the Trustee may deem necessary to provide for the support of my wife in her accustomed manner of living, taking into consideration any other means of support that she may have to the knowledge of the Trustee.

c) On the death of my wife, the Trustee shall distribute all property then remaining in the trust (other than accrued or undistributed income, which shall be distributed to her estate), to my three sons, DAVID A. McNEILL, III, JACK R. McNEILL, and DONALD T. McNEILL, in equal parts share and share alike. Should any son die before said distribution, the share which would have been distributed to such son shall be distributed, per stirpes, among the person designated in the Last Will and Testament of such deceased son, and if no such designation is made, then such share shall be distributed in accordance with the residuary clause of such deceased son’s Last Will and Testament.

Rose and David A. McNeill, Jr. were married for over 18 years before David

died on December 19, 2000. His son Donald T. McNeill died in 2009, and his interest

in the trust was divided between his daughter, Virginia Ruth McNeill Vaughn (25%),

his son, Donald T. McNeill, Jr. (25%), and the D. T. McNeill Foundation (50%).

David A. McNeill, III died in 2018, and his interest in the trust passed to his wife,

Judith K. McNeill.

3 When First Union was administering the trust, Rose was nearly able to maintain

the lifestyle to which she had been accustomed when her husband David was living.

And when First Union merged with Wachovia, Rose did not notice any changes in the

way that the trust was being administered. During Wachovia’s tenure as trustee, Rose

requested and was permitted to obtain distributions of principal from the trust. Those

distributions continued under Wells Fargo, but in 2012, Wells Fargo reduced the

monthly amount distributed to Rose. And in a letter dated December 23, 2019, Wells

Fargo completely denied Rose’s request for monthly distributions from the trust

principal. In that letter, Wells Fargo set out its position that the trust language

requiring it to take into account any “other means of support” before encroaching on

the trust principal meant that it must consider all of Rose’s assets. Pursuant to that

interpretation, Wells Fargo informed Rose that the trust required her to “utilize [her]

outside resources (through conversion to liquid funds) until encroachment” upon the

principal of the trust became necessary, and that it was unlikely that she would receive

any distributions of principal until all of her “own available resources [we]re

approaching exhaustion.”

4 In September 2021, Rose filed a verified petition to remove Wells Fargo as

trustee, alleging that Wells Fargo had acted in bad faith in failing to take action to

allow her to maintain her standard of living. She subsequently amended her petition

to assert claims for breach of fiduciary duty and, in response to an order from the trial

court, added the remainder beneficiaries as second defendants. Following discovery,

Wells Fargo moved for summary judgment, arguing that Rose had failed to show that

it had acted in bad faith or breached its fiduciary duties, that it had acted in accordance

with the trust’s terms and had administered the trust impartially, and that certain of

Rose’s claims were barred by the statute of limitation. The trial court conducted a

hearing on the motion for summary judgment and subsequently denied it.

During the two-day bench trial, Rose submitted evidence regarding her standard

of living while she was married to David, which included employing people to prepare

meals, clean the house, maintain the yard, and service the pool, as well as receiving a

new car every two to three years, and receiving regular gifts from David. Prior to

David’s death, she was also receiving an allowance of $6,000 per month for groceries

or whatever else she wanted to buy. Following her husband’s death, Rose held

personal assets that included investment accounts and real property, some parcels of

5 which she gifted to family members. At the time of trial, 84-year-old Rose had sold

some of her real property and most of her liquid assets to pay her living expenses. Her

remaining real property included one rental property that had sustained severe storm

damage, a one-half undivided interest in a house where her brother was living, and her

personal residence where she had lived with David.

A business accountability specialist with Wells Fargo testified that the trust

required Wells Fargo to consider the interests of all beneficiaries.2 With respect to the

trust language requiring consideration of any “other means of support” before making

a distribution of trust principal, Wells Fargo’s interpretation was that it had to

consider all available means of support. For Rose, that meant that she would not be

entitled to any distributions of principal until she had first liquidated all of her

personal assets, apart from her primary residence. With respect to the December 23,

2019 denial letter, the Wells Fargo representative testified that the bank’s decision

was based on information provided by Rose, including her income, expenses, non-

liquid real estate assets, liquid assets, and expenses.

2 While Wachovia was administering the trust, the remainder beneficiaries complained that Rose had no interest in preserving trust assets and should not receive further distributions of principal while she still had assets of her own. 6 At the conclusion of the plaintiff’s case and again at the end of trial, Wells

Fargo moved for a directed verdict on the grounds that it had not acted in bad faith or

abused its discretion in denying Rose’s requests for encroachment upon the trust

principal based on the information it had been given about Rose’s other assets. The

trial court denied the motion for directed verdict.

In its subsequently issued order granting judgment in favor of Rose, the trial

court concluded that the encroachment provisions in Item X (b) of David’s will were

ambiguous as to whether the trustee should consider Rose’s personal assets and, if so,

what assets should be considered. The trial court then relied on evidence presented

at trial to reach its conclusion that “David’s intent was to provide support to his wife

in the manner of living she enjoyed prior to his death, and that David did not intend

for his wife to deplete her own resources in order to preserve principal for the benefit

of the remainder beneficiaries.” As a result, the trial court concluded that Wells Fargo

had misinterpreted the encroachment provision by interpreting it to require Rose to

“first exhaust, or nearly exhaust, all of her personal assets before the trustee [would

be] authorized to use its discretion to invade principal in order to provide for her

support,” and that Rose was entitled to recover the amounts she would have received

7 if the distributions of principal had not been “wrongfully discontinued.” Specifically,

the trial court awarded Rose $336,400, representing monthly payments of $5,800

from December 2019 to October 2024; living expenses, including the reasonable cost

of providing housekeeping, pool service, and yard service, but not including expenses

for food and clothing; future monthly payments of $5,800 until Rose’s death or

further order of the court; amounts needed to make repairs to Rose’s residence; and

additional distributions for reasonable expenses, such as property taxes, insurance,

medical expenses, automobile maintenance, and home maintenance. The trial court

specifically instructed Wells Fargo that in making distributions from trust principal

it may consider other income available to Rose, but not the value of her personal

assets. These appeals followed.

Case No. A25A1421.

1. Wells Fargo contends that the trial court erred by substituting its judgment

for that of the trustee in the absence of a finding of bad faith or abuse of discretion.

In construing the terms of a trust, several principles are relevant. First and

foremost is that the intention of the settlor is to be followed. See Peterson v. Peterson,

303 Ga. 211, 214 (2) (811 SE2d 309) (2018). In keeping with that requirement, the

8 trustee has a duty to administer the trust in accordance with its terms and purposes.

Id.; see also OCGA § 53–12–241 (a) (“In administering a trust, the trustee shall

exercise the judgment and care of a prudent person acting in a like capacity and

familiar with such matters, considering the purposes, provisions, distribution

requirements, and other circumstances of the trust.”). And where a trust has

successive beneficiaries, “[e]xcept to the extent that the governing trust instrument

clearly manifests an intention that the trustee shall or may favor one or more of the

beneficiaries, a trustee shall administer a trust impartially based on what is fair and

reasonable to all of the beneficiaries and with due regard to the respective interests of

income beneficiaries and remainder beneficiaries.” OCGA § 53-12-247.

When determining whether to distribute trust property to a beneficiary, as a

general rule, a trustee is not “under any duty to investigate the resources of [the]

beneficiary.” OCGA § 53-12-245. But the “other means of support” language found

in the trust here expands the trustee’s discretion by enabling the trustee to consider

the other means of support of the beneficiary before encroaching upon the trust

principal. See Griffith v. First Nat. Bank & Trust, 249 Ga. 143, 145 (1) (287 SE2d 526)

(1982). A trustee’s discretionary powers must, however, be exercised in good faith.

9 See McPherson v. McPherson, 307 Ga. App. 548, 550 (1) (a) (705 SE2d 314) (2011);

OCGA § 53-12-260 (“Notwithstanding the breadth of discretion granted to a trustee

in the trust instrument, . . . the trustee shall exercise a discretionary power in good

faith.”). And when “the exercise of discretion by the trustee is infected with fraud or

bad faith, misbehavior, or misconduct, arbitrariness, abuse of authority or

perversion of the trust, oppression of the beneficiary, or want of ordinary skill or

judgment,” a court will interfere. (Citation and punctuation omitted.) Citizens &

Southern Nat. Bank v. Haskins, 254 Ga. 131, 142 (II) (9) (327 SE2d 192) (1985).

Here, the parties offered different interpretations of what “other means of

support” Wells Fargo could consider before encroaching on the principal of the trust

to provide support for Rose in the same standard of living to which she was

accustomed while David was living. Rose took the position that Wells Fargo could

only consider other sources of income available to her. Wells Fargo construed the

language to include all available means of support, which could require liquidation of

her personal assets. In resolving this conflict, the trial court recognized that Wells

Fargo had discretion to consider Roses’s other sources of support but held that, as

trustee, it had misinterpreted the trust language and instructed that going forward, it

10 could consider Rose’s other sources of income but not the value of all of her personal

assets in determining whether to make encroachments from trust principal. In

addition, the trial court required Wells Fargo to provide past, present, and future

distributions to Rose. But the trial court made no finding of fraud, bad faith, or abuse

of discretion on the part of Wells Fargo.

We recognize that Section 50 of the Restatement (Third) of Trusts (2003)

states that “[a] discretionary power conferred upon the trustee to determine the

benefits of a trust beneficiary is subject to judicial control only to prevent

misinterpretation or abuse of the discretion by the trustee.” Id. at (1) (emphasis

supplied). But we have not found Georgia case law authorizing judicial intervention

when a trustee has misinterpreted trust language, without more. Instead, existing

Georgia authority provides that when a trial court concludes that a trustee has

discretion with regard to encroaching on trust property, the trial court may

“substitute[] its judgment for that of the trustee only if the trustee ha[s] exhibited

some abuse of discretion such as bad faith or fraud or if the conduct of the trustee is

infected with some other abuse of discretion.” Griffith, 249 Ga. at 146 (1); see also

Otwell v. First Nat. Bank of Gainesville, 268 Ga. 547, 552 (4) (491 SE2d 785) (1997)

11 (declining to interfere with a trustee’s exercise of discretion where trustee may not

have acted strictly in accordance with the grantor’s directives, but trustee did not

abuse its discretion or act in bad faith); McPherson, 307 Ga. App. at 552 (1) (b) (holding

that without some evidence of bad faith, we cannot authorize judicial intervention into

trustees’ exercise of discretionary power). Accordingly, absent a finding of “bad faith

or fraud or [that] the conduct of the trustee is infected with some other abuse of

discretion,” the trial court lacked authority to substitute its interpretation of the trust

language for Wells Fargo’s interpretation. Griffith, 249 Ga. at 146 (1). Because our

review of the existing record has not revealed evidence that would support such a

finding, we must reverse.

2. Given our holding in Division 1, we need not address Wells Fargo’s

remaining enumerations of error.

Case No. A25A1422

3. The remainder beneficiaries contend that the trial court erred by ordering

distributions of trust principal to Rose when Wells Fargo did not abuse its discretion

in denying her requests for those distributions.

12 Given our holding in Division 1, reversing the trial court order appealed from,

we need not address this enumeration of error or the remaining enumerations of error

asserted by the remainder beneficiaries.

Judgments reversed. Gobeil and Davis, JJ., concur.