Since 1953, Narcotics Anonymous has maintained a Fellowship for which the sole membership requirement is a “desire to stop using.” After 40 years, the Fellowship created a revocable charitable trust to help manage its literature, along with other intellectual property assets.
When a renegade group known as the Autonomous Region of Narcotics Anonymous filed suit claiming breach of trust and violation of fiduciary duties, the probate court shut them down, finding that they lacked standing. On appeal, the Second Appellate District affirmed the lower court’s decision, emphasizing their concern that costly litigation initiated by “officious intermeddlers” would divert trust resources away from charitable purposes.
Designating the trust document as “the heart of the case,” the court diagnosed Autonomous Region’s arguments as “two infirm theories,” destined to collapse beneath the weight of overwhelming evidence.
As one of many delegates to the Fellowship, Autonomous Region claimed status as settlor, with full power to revoke the trust. The probate court rejected this position as “absurd,” and the higher court agreed, pointing out that the trust document named the collective Fellowship, “as given voice by its groups,” as the singular settlor. Just as one student in a class of many can’t individually claim to be the entire class, Autonomous Region had no basis for claiming settlor status as one delegate in the larger group.
Autonomous Region next argued that they were entitled to special interest standing. The decision noted the purpose of the special standing doctrine: to provide adequate supervision and enforcement of charitable trusts. With a revocable trust, the settlor can provide that very supervision and enforcement, and can even shut down the entire trust at the snap of the fingers. The settlor’s ongoing power over a revocable trust effectively eliminates the problem the special standing doctrine was created to solve, and if there’s no problem, the doctrine doesn’t apply, the opinion concluded. By this logic, the Second District found that special interest standing does not exist for revocable charitable trusts.
Ephemeral visions of special standing and control over trust assets were not enough. Autonomous Region may not have recognized the power of the trust document to shape the outcome of lawsuits decades into the future, but a carefully guided estate plan will raise awareness of this essential truth: there is no substitute for knowing your trust language.
Autonomous Region of Narcotics Anonymous v. Narcotics Anonymous World Services, Inc., as Trustee, California, Second District, B309376 (2022)
About the Author:
John O’Grady leads a full-service estate and trust law firm in San Francisco. His practice includes Estate Planning & Administration, Probate and Trust Litigation.