Thirty-six grandchildren are currently engaged in a legal battle, alleging they have been deprived of their rightful inheritance from a family trust. The dispute involves the university where their grandfather, a noted scientist, was employed.
Edward Lyon, a distinguished urologist affiliated with the University of Chicago, had earmarked his substantial estate for his 36 grandchildren via a trust established through his retirement benefits from the university.
Lyon passed away in 2019, aged 93, at his residence in Wisconsin. The trust, originally set up in 1988, was updated in 2014 to appoint his children as the successor trustees, as detailed in a civil lawsuit.
The arrangement specified that the grandchildren would receive annual distributions during Christmas and on their birthdays, transitioning to monthly payments once they reached the age of 60.
However, the Teachers Insurance and Annuity Association of America (TIAA) has asserted that an essential beneficiary designation form lacked a signature, resulting in the suspension of payments from the trust.
In a related development, Lyon’s wife, Valerie, had designated Dan Davies, their son-in-law, as the power of attorney.
The lawsuit stated that Davies had signed a form to change the beneficiaries to the couple’s grandchildren and waive Valerie’s spousal rights, as the couple intended.
TIAA disputed that, claiming that Davies did not have the authority to sign the spousal waiver on her behalf.
Edward Lyon, a longtime scientist at the University of Chicago, left a trust to his grandchildren, but a paperwork problem prevented them from ever receiving it
Lyon, pictured above, left a $1.7 million trust from his retirement benefits to his 36 grandchildren after his death in 2019
The University of Chicago, pictured above, has been named as a defendant in the lawsuit filed by the family
When the family protested, Davies was ‘given a variety of shifting and changing reasons for non-acceptance’ of the trust’s inheritance, according to the lawsuit.
The family then submitted a claim to the University of Chicago, asking that the retirement benefits be redistributed to the grandchildren’s trust.
Estate attorney Patrick Agnew submitted the letter in 2022 explaining Lyon’s intent for establishing the trust for his grandchildren so they could receive tax benefits.
Estate lawyer Patrick Agnew, pictured above, submitted a claim explaining Lyon’s intent for the trust in 2022
He added that, in his expert legal opinion, Davies had the authority to sign a waiver of Valerie’s spousal rights, citing Wisconsin statutes.
Agnew also proposed that the University of Chicago draft a new agreement for all 12 children to sign.
Alice Lyon, one of the couple’s 12 children, told the Wall Street Journal: ‘They said “No” to anything that would resolve it.’
‘It’s supposed to go to the grandchildren. It’s his legacy and this hits us all to the core.’
The decision to allocate the trust to the younger generation increases the tax benefits. The retirement account has grown tax-deferred for decades.
TIAA has denied the family’s claims of negligence. The university has said that it followed the beneficiary rules.
If the family loses the lawsuit, the money would be given to Valerie’s estate and the trust. The grandchildren could still get their share, but would lose the tax benefits. The trust has been accruing interest and is now almost $2 million.
Lyon’s wife, Valerie, pictured above, made her son-in-law her power of attorney, who signed a waiver for her for the retirement benefits
Lyon obtained multiple degrees at the University of Chicago, pictured above, but the school is now stuck in a lawsuit with his family
Lyon had spent a lifetime at the University of Chicago, starting with his high school tenure at the college’s Laboratory High School.
He obtained a Bachelor of Philosophy, Bachelor of Science and completed his postgraduate medical training at the university, according to his obituary.
Lyon married Valerie in 1951 after a stint with the Navy and Air Corps. While researching at the university, he studied the diagnosis, treatment and prevention of kidney stones.
‘He flourished during retirement with a never-ending agenda of hobbies and projects with his wife, children, 36 grandchildren and 4 great grandchildren,’ his obituary said.
The Daily Mail has reached out to the family’s representation and lawyers for TIAA and the University of Chicago for comment.
