Riggs National Bank of Washington, D.C. v. Zimmer
Riggs National Bank of Washington, D.C. v. Zimmer, 355 A.2d 709 (Del. Ch. 1976), is the leading American case addressing the non-applicability of the privilege to trust beneficiaries.
In Riggs, the beneficiaries of a trust sought to compel production of a legal memorandum prepared by an attorney named Workman. Workman's legal fees were paid from the corpus of the trust estate.
The trustee refused to produce the document and claimed it was protected under the attorney-client and work product privileges. The document was prepared "in anticipation of potential tax litigation on behalf of the trust with the State of Delaware." 355 A.2d at 710.
However, the case before the court was an unrelated surcharge claim initiated by the beneficiaries.
The Riggs court concluded: "the trustee's invocation of the privileges cannot shield the document involved herein from the beneficiaries' desire to examine it." 355 A.2d at 712.
The court explained:
The trustee has been described as a mere representative whose function is to attend to the disposition and maintenance of the trust property so that it may be enjoyed by the beneficiaries in the manner provided by the settlor. In order for the beneficiaries to hold the trustee to the proper standards of care and honesty and procure for themselves the benefits to which they are entitled, their knowledge of the affairs and mechanics of the trust management is crucial. See Bogert on Trusts, 2d Ed., s 961. And, when the beneficiaries desire to inspect opinions of counsel for which they have paid out of trust funds effectively belonging to them, the duty of the trustees to allow them to examine those opinions becomes even more compelling. The distinction has often been drawn between legal advice procured at the trustee's Own expense and for his Own protection and the situation where the trust itself is assessed for obtaining opinions of counsel where interests of the beneficiaries are presently at stake. See Restatement of Trusts, 2d, 173 comment b. (355 A.2d at 712.)