Can a Remainder Beneficiary Challenge Trustees for Poor Investment Returns? Dill v. Offray and the Limits of Prudent Investor Claims

Albert Dill as Executor/Co-Trustee v. Claude V. Offray III, 2026 WL 742118 (N.J. Super. Ct. App. Div., Mar. 17, 2026)

When a parent creates a comprehensive estate plan worth over $22 million, and a remainder beneficiary believes the trustees are not generating enough income, can that beneficiary sue? According to a recent New Jersey appellate decision, the answer is yes — but only if the beneficiary can allege specific facts showing a breach, not just disappointment with the numbers.

Background: A Multi-Trust Estate Plan

Claude V. Offray, Jr. created a Revocable Trust Agreement (RTA) in 2011, later amended in 2013 and 2014, before passing away in May 2014. His estate plan established multiple trusts — a Credit Shelter Trust, an Exempt Marital Trust, a Non-Exempt Marital Trust, and generation-skipping transfer trusts — funded with assets totaling approximately $22.8 million. Albert Dill served as executor of the estate and co-trustee alongside Bank of America.

The Marital Trusts were designed to pay all income to Offray's surviving spouse, Gloria Ann Offray (G.A.O.), for her lifetime, with principal available for her health, education, maintenance, and support. Upon G.A.O.'s death in March 2021, the remaining trust assets were to be divided equally between the couple's two children — Claude V. Offray III (the defendant-appellant) and Denise Offray — as remainder beneficiaries.

The Dispute: Were the Returns Adequate?

After receiving the trustees' accountings in 2024, Claude III amended his counterclaims, alleging breach of fiduciary duty and violations of New Jersey's Prudent Investor Act (PIA). His central complaint: in the two years following G.A.O.'s death, the trusts generated only approximately $1.1 million in total income, which he deemed inadequate for a portfolio of that size. He also noted that the trustees failed to adjust the trusts' investment approach to generate a reasonable rate of return.

The trial court dismissed these counterclaims, finding that Claude III lacked standing, failed to state a cognizable PIA claim, and did not name his adult children — who held powers of attorney — as indispensable parties.

The Appellate Court's Analysis

Standing: Remainder Beneficiaries Can Sue. The appellate court parted ways with the trial court on standing. Under New Jersey's Uniform Trust Code (UTC), a trust beneficiary is defined broadly as any person with a present or future interest, whether vested or contingent. Citing the statutory framework, the court held that a remainder beneficiary with a future contingent interest has standing to challenge trustee conduct. The court emphasized that trustees owe a duty not only to make trust property productive for current income beneficiaries, but also to preserve trust assets for remainder beneficiaries.

The PIA Claim: Conclusory Allegations Are Not Enough. Despite recognizing standing, the court affirmed dismissal of the PIA claim on the merits. Under the Prudent Investor Act, a fiduciary must invest and manage trust assets as a prudent investor would, considering the purposes, terms, distribution requirements, and other circumstances of the trust. Investment decisions must be evaluated not in isolation, but in the context of the overall portfolio strategy.

Here, Claude III's allegations fell short. He pointed to $1.1 million in income over two years and argued that the rate of return was inadequate, but he identified no specific error in the accountings, no particular investment decision that was deficient, and no accepted standard that was breached. Critically, he conceded that the overall trust value had actually increased — from $21.68 million to $22.82 million — during the period in question. The court found these bare allegations insufficient to state a PIA claim.

The Trust Document Matters. The court also noted an important provision in the RTA itself: under Article X, Section 10.1(i), the trustees were expressly permitted to disregard any principle of investment diversification. This provision aligned with the PIA's own framework, which allows trust instruments to expand, restrict, or eliminate the prudent investor rule. Without specific facts showing that the trustees' investments were unreasonable — and absent any allegation of actual depreciation — the court concluded that the PIA claim was properly dismissed.

Key Takeaways for Trustees and Beneficiaries

Remainder beneficiaries have standing. Even if your interest is contingent on a life beneficiary's death, you may challenge trustee conduct under the UTC. Trustees cannot assume that only current income beneficiaries can hold them accountable.

Conclusory allegations will not survive a motion to dismiss. A beneficiary who believes returns are inadequate must plead specific facts — which investment decisions were imprudent, what accepted standards were violated, and how the trustee's conduct caused actual harm. Simply pointing to a dollar figure and calling it inadequate is not enough.

Trust documents can expand trustee discretion. Provisions permitting trustees to disregard diversification principles or granting broad investment authority are enforceable under the PIA. Beneficiaries challenging trust management must account for these provisions in their claims.

Overall portfolio performance matters. Courts evaluate investment decisions in the context of the entire trust portfolio, not individual assets. If the trust's overall value increased during the relevant period, that undercuts claims of mismanagement — even if income generation was modest.

If you are a trustee, executor, or beneficiary with questions about trust administration, fiduciary duties, or the Prudent Investor Act, contact Riefkohl Law for a consultation.