Probate-Exhaustion Rule for Intentional Interference with Inheritance from Inter Vivos Trusts

Introduction

In Berol Dewdney and Cordelia Dewdney v. Ralph E. Duncan, IV, 2025 VT 26, the Vermont Supreme Court confronted multiple tort and contract claims arising out of amendments to an inter vivos trust created by children’s-book author Anna Dewdney. After Anna’s death, her daughters alleged that her longtime partner, Ralph Duncan, unduly influenced her to increase his share of the trust income from 20% to 50% in exchange for an oral promise that he would name the daughters as his sole heirs. The daughters sued in civil court for intentional interference with an expectation of inheritance (IIEI), breach of contract, promissory estoppel, unjust enrichment, and constructive fraud. The trial court granted summary judgment for Duncan on all counts. The Supreme Court majority affirmed, recognized IIEI as a new tort under Vermont law, adopted the Restatement (Third) of Torts definition, and imposed a “probate-exhaustion” requirement even where the interference involved a nonprobate transfer—the inter vivos trust.

Summary of the Judgment

The Court held that Vermont will recognize the tort of IIEI, adopting the Restatement (Third) of Torts: Liability for Economic Harm § 19(1), which requires (a) a reasonable expectancy, (b) an independent legal wrong, (c) intent to interfere, (d) causation, and (e) economic loss.
The Court imposed the Restatement’s § 19(2) “probate-exhaustion” rule: a plaintiff may not bring an IIEI claim in civil court if she had the right to seek the same remedy in probate court.
Applying that rule, the Court concluded that the Dewdney daughters should have first pursued relief in probate (challenging trust administration) and so barred their IIEI claim in civil court.
The Court affirmed summary judgment on all remaining counts:
- Breach of contract—no anticipatory repudiation because defendant’s lone statement that he was “under no legal obligation” did not amount to a positive, unequivocal refusal.
- Promissory estoppel—unavailable where an underlying contract governs or, in the alternative, no detrimental reliance proved (promise not yet broken; no harm shown).
- Unjust enrichment and constructive fraud—claims challenging trust distributions also fell within probate’s exclusive jurisdiction over trust administration.
Justice Waples dissented on the IIEI claim. She would have distinguished inter vivos trusts from wills, followed the Massachusetts Sacks decision, and held civil IIEI claims permissible where no probate decree on trust validity exists.

Analysis

Precedents Cited

Restatement (Second) of Torts § 774B (1979) – early definition of IIEI.
Restatement (Third) of Torts: Liability for Economic Harm § 19 (2020) – modern definition, including probate-exhaustion.
Kneebinding, Inc. v. Howell, 2018 VT 101 – Vermont’s tortious interference with contract cases.
Stone v. Town of Irasburg, 2014 VT 43 – extension to interference with performance of office.
Collins v. Collins, 2017 VT 70 – probate division’s exclusive jurisdiction over trust administration disputes.
Uniform Trust Code § 604 comment & 14A V.S.A. § 604 official comment—carve-out for non-probate torts vs. trust contests.
Sacks v. Dissinger, 178 N.E.3d 388 (Mass. 2021) – Massachusetts rule distinguishing wills (probate-exhaustion) from trusts.

Legal Reasoning

1. Adoption of IIEI Tort. Recognizing IIEI as analogous to tortious interference with contract, the Court held that Vermont should follow the Restatement (Third) definition, which modernizes and refines the Second Restatement’s approach. This recognized a cause of action where a defendant uses tortious means to deprive an expected beneficiary of an inheritance or gift.

2. Probate-Exhaustion Rule. The Third Restatement limits IIEI suits when probate relief is available, to avoid collateral challenges to probate decrees and ensure consistent treatment of testamentary transfers. Even though an inter vivos trust is a non-probate transfer, Vermont’s Trust Code vests exclusive jurisdiction over trust administration in the probate division (14A V.S.A. § 203(a)). The Court thus extended probate-exhaustion to trust-based IIEI claims to prevent piecemeal litigation and conflicting judgments.

3. Contract and Estoppel Claims. The Court stressed that anticipatory repudiation requires a “positive and unequivocal refusal” to perform, which was absent here. It reiterated that promissory estoppel cannot coexist with an enforceable contract and, alternatively, no detrimental reliance was proven.

4. Unjust Enrichment & Constructive Fraud. Recognizing these as restitutionary and tort-based challenges to trust distributions, the Court ruled they too implicated trust administration and belonged in probate court.

Impact

• IIEI established. Lawyers can now plead IIEI in Vermont, using the Restatement (Third) framework.

• Probate-exhaustion extended to trusts. Even non-probate transfers now require plaintiffs to exhaust probate remedies before civil litigation, shaping forum strategy in estate-related disputes.

• Narrower remedies in civil court. Many trust-related tort claims will be directed to probate, streamlining trust contests but potentially delaying tort relief.

• Dissent signals future debate. The Waples dissent—citing Sacks—may spur legislative or scholarly reconsideration of carving out trusts from probate-exhaustion.

Complex Concepts Simplified

Inter vivos trust: A living trust created by a grantor during her lifetime, avoiding probate upon death.
IIEI (Intentional Interference with Expectation of Inheritance): A tort where someone uses wrongful means to deprive an expected heir of a gift or inheritance.
Probate-exhaustion rule: Before suing in tort, a claimant must first seek relief in the probate forum if available, to prevent conflicting outcomes.
Anticipatory repudiation: A clear, unequivocal refusal to perform a contract before performance is due.
Promissory estoppel: A remedy enforcing a promise when someone reasonably relies to their detriment, but only when no contract governs the promise.
Unjust enrichment: A restitution claim when one party unfairly benefits at another’s expense.
Constructive fraud: A claim arising when someone gains an unfair advantage in circumstances requiring the highest good faith, even absent intentional deceit.

Conclusion

Berol Dewdney v. Duncan marks a landmark in Vermont estate and trust litigation. For the first time, Vermont courts officially recognize IIEI as a standalone tort, aligning with modern Restatement principles. By imposing a probate-exhaustion requirement on trust-related interference claims, the Court emphasized legislative intent to concentrate trust administration disputes in the probate division and avoid conflicting remedies. Though practical estate-planning disputes—such as undue influence over trust amendments—now may require dual-forum navigation, the decision provides clear doctrinal guidance. The dissent’s call for a carve-out for non-probate transfers highlights an emerging debate that may shape future statutes or case law.