Minnesota Supreme Court Takes Up Chafoulias Estate Dispute

St. Paul, MN (KROC-AM News) - The Minnesota Supreme Court has agreed to take up a case involving the estate of a wealthy Rochester businessman.

High Profile Rochester Family Dispute

Ann Chafoulias, daughter of the late Gus Chafoulias, appealed a decision handed down by the Minnesota Court of Appeals in February that upheld an Olmsted County judge's decision to deny her request to remove her brother, prominent local businessman Andy Chafoulias, as the trustee of their father's estate. In her petition to the court, Ann Chafoulias alleged that her brother had misappropriated trust assets.

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Allegations of Mismanaged Trust Assets

According to court documents, a 2020 accounting of the trust assets disclosed that Andy Chafoulias had taken nearly $17 million in loans from the trust without making any repayments. Her petition included  his 2021 inventory of their father's personal property, which she argued omitted various items, including gold bars and valuable artwork.

Ann Chafoulias also claimed that her brother gifted trust property to multiple beneficiaries. She further argued that, as trustee of her separate discretionary trusts, he made only a single distribution to her between 2020 and 2024 despite her losing health insurance and experiencing a decline in income.

The Legal Fight Over the No-Contest Clause

In addition to her petition to remove her brother as trustee, Ann Chafoulias also asked the court to protect her from the trust's no-contest clause. According to court documents, the clause caused her to be disinherited because of her request to strip her brother of his trusteeship. The lower court also ruled that even requesting an interpretation of the no-contest clause would trigger it,and also result in her removal as a beneficiary of the trust.

Why the Minnesota Supreme Court Agreed to Hear the Case

In its decision to hear her appeal, the Supreme Court agreed to consider whether the judge in the case erred by ruling that "merely requesting interpretation of a no-contest provision constituted an effort to void that provision, making it impossible for trust beneficiaries to ask for guidance regarding no-contest provisions without losing their rights as beneficiaries."

Gus Chafoulias died in December 2020 at age 85. The Rochester native was well known for his ownership and development of numerous properties in the city, including a major redevelopment that transformed downtown Rochester in the 1980s.