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ST. PAUL, Minn. — A late Rochester developer's children continue a years-long battle over inheritance in recent briefings intended for the State Supreme Court.

In early June, Ann Chafoulias, the daughter of the late real estate mogul Gus Chafoulias, asked the Supreme Court to expand trust law to rule whether she could petition for removal of her brother, Andrew Chafoulias, as trustee and put the estate under court supervision.

In 2024, Ann Chafoulias asked Olmsted County Court to review Andrew's activities using their father's trust money and determine whether he could be removed.

A later petition sought judgment on whether she could ask for his removal at all, without triggering a no-contest clause that would remove any beneficiary who tried to remove or invalidate portion of the written trust.

Olmsted County Court and the Minnesota Court of Appeals ruled that by asking for judicial review, Ann Chafoulias did indeed trigger the no-contest clause .

In a June 22 filing to the Supreme Court, Ann Chafoulias and her attorneys argue that while neither of the lower courts could expand Minnesota law to hear out trust beneficiaries operating in "good faith," the Supreme Court does have that power.

In the past month, there have been several filings arguing for and against that extension.

Elder Law pros side with Ann

In late June, the Minnesota Chapter of the National Academy of Elder Law Attorneys (MN-NAELA) filed an amicus curiae (friend of the court) brief urging the court to bring the rights around trusts more in line with those around wills.

Both types of estate planning broadly manage finances and property. Trusts are often enacted later in life, while a will only comes into play after death.

Even if a will has a no-contest provision, a person with probable cause can ask the court for review. A trust beneficiary has no such right if there is a no-contest provision.

MN-NAELA argued that Minnesota Trust Code does state that the terms of a trust prevail over all except “the power of the court to take such action and exercise such jurisdiction as may be necessary in the interests of justice.” Meaning, the attorneys argue, that the Legislature gave the court power to act in the interests of justice "regardless of trust terms."

The lower courts' Chafoulias decisions "produce the opposite outcome," MN-NAELA wrote. "...If the Court does not extend the probable cause exception, there will be a chilling effect on legitimate disputes, and trustees can run roughshod over beneficiaries without being held accountable."

MN-NAELA is interested in the case, representatives wrote, because senior citizens control more than half of the total wealth in the U.S. and the transfer of those resources is ripe for exploitation by bad actors.

Andrew urges court to uphold lower rulings

In a 65-page response to Ann Chafoulias' first petition to the Supreme Court, Andrew's attorneys said the Supreme Court should uphold the no-contest clause written into Gus Chafoulias' trust before his death.

The briefing argues that the no-contest clause is unambiguous, and instead of going to the court, Ann could have sought mediation or arbitration, asserted a claim for "breach of fiduciary duty," or sought the advice of Joe Powers, the named Trust Advisor — without trying to remove Andrew Chafoulias as trustee.

However, since Ann violated the no-contest clause and was removed as a beneficiary, she no longer has any standing to ask for relief, the filing argues.

In previous filings, Ann Chafoulias argued that in the six years since her father's death, she has received one $170,000 payment out of the estate, which was worth about $30 million in 2020.

She further claimed Andrew mocked and belittled her, refuses to negotiate splitting the trust outside of court and may have taken out personal loans from the estate and/or given away valuable items without consulting her or other beneficiaries.

Andrew Chafoulias' filing does not directly address those specific claims other than saying Ann "asserted a litany of falsehoods — some of them bizarre — in an effort to smear Respondent publicly."

However, it notes that the first steps Andrew had to take as trustee involved paying Gus Chafoulias' last expenses, any claims against him, and any estate taxes.

Andrew was also required to "preserve existing business interests" before splitting any remaining assets into four separate trusts — two for Ann, and two for Andrew.

Andrew Chafoulias' filing claims that in 2024, the trust was still in the "administrative" stage, which preceded larger payouts.

"If the case had proceeded beyond the pleadings stage, (Andrew) would have mounted a vigorous defense to the allegations raised by (Ann), many of which are unsupported, reflect her failure to understand which assets are held by the Trust, or ignore the largely illiquid nature of the Trust assets, which necessitated holding them in an administrative trust in order to allow (Andrew) enough time to pay claims and estate taxes and settle the Trust’s debts before making distributions to beneficiaries," the filing reads.

Ann reiterates argument

A reply to Andrew Chafoulias' attorneys, filed Wednesday, Aug. 5, reiterates that Ann Chafoulias' amended petition did not explicitly ask for Andrew Chafoulias to be removed from the trust.

Instead, Ann's attorneys claim, she wanted a ruling on whether or not she could seek that outcome in the future.

"...A declaration from the court stating that (Ann) is prohibited from seeking (Andrew's) removal obviously does not void, nullify, or set aside any provisions of the Trust. To the contrary, such a ruling would actually confirm the validity (as well as the scope) of the no-contest clause," her attorneys write. "Conversely, if the Trust allows Petitioner to seek the Trustee’s removal through a judicial process, then a declaration from the court stating as much cannot, by its nature, void, nullify, or set aside any provision of the Trust because, in that case, the court has already concluded that no provision stands in the way of seeking removal."