Trustees Beneficiaries

News & Analysis as of

Eleventh Circuit Holds No Duty to Defend Directors Serving in Mixed Capacities

On June 22, 2015, the 11th Circuit affirmed a Georgia federal court decision that there was no coverage under a director’s and officer’s (D&O) insurance policy for claims asserted by beneficiaries of a family trust against a...more

A trust is not an agency

The trustee is not an agent of the beneficiary. The trustee's duty not to delegate the administration of the trust could well be implicated if the trustee without authority were to behave as if he were the beneficiary's...more

Trustees Beware: Which Fiduciary Standard Applies to Your “Business Judgments”?

To what legal standard must a trustee adhere when he or she also participates in the control of a family or closely held business? Courts continue to grapple with this question. The high courts in both Georgia and Nebraska...more

The Evolving Duty of Trustee Communication with Beneficiaries

Trustee communications with beneficiaries have followed an interesting legal path in Kentucky. The original Kentucky statute regarding communication with the beneficiaries required that the trustee must keep the beneficiaries...more

The Trustee's Power to Loan

Trust agreements often give trustees the power to make loans. When and how to exercise the power should be given significant thought. Upholding the fiduciary duty owed to all beneficiaries is always a key concern. ...more

Beneficiaries Lack Standing to Challenge Trustee's Actions in Bankruptcy Court

In a recent ruling on In re Land Securities Investors, Ltd., the United States Bankruptcy Court for the District of Colorado ruled that trust beneficiaries do not have standing to appear in a bankruptcy case even when the...more

Trustee Selection: Choose Wisely if Your Family-owned Business Will Be Held in a Trust

Let’s assume that you and your spouse are the sole owners of a very successful business. You have established an estate plan with trusts in place to utilize the estate tax exemptions of both spouses for Washington state and...more

Laches as a Limit on the Duty of a Trustee to Account

Doris Corya was a trustee (or co-trustee) of four trusts that failed to provide fiduciary accountings to a beneficiary otherwise entitled to receive accountings under Florida law. The failure to account went back many years –...more

Amendments to Virtual Representation Statute Take Effect on January 1, 2015

There is increasing interest among trustees and beneficiaries to resolve disputes and modify trust documents without going to court. For many years, the primary mechanism to accomplish that in Illinois has been the Virtual...more

National Estate Planning Awareness Week

This week is National Estate Planning Awareness Week. It is a common misconception that only the very wealthy need estate plans. This may explain why 55% of Americans do not have estate plans. However, the truth is...more

The fiduciary exception to the attorney-client privilege: A recent development

In a suit by the beneficiary against the trustee, is the trustee entitled to assert the attorney-client privilege against the beneficiary, or is there a fiduciary exception to the attorney-client privilege? As to...more

T&E Litigation Newsletter – August 2014 #2

In Lowell v. Talcott et al., Case No. 13-p-1053, 2014 Mass. App. LEXIS 98 (August 18, 2014), the Appeals Court considered whether a child born in the 1960s while her mother was married to a man who is not the child’s father...more

Choosing a Trustee for a Special Needs Trust

Choosing a trustee is one of the most important and difficult issues in creating a special needs trust (SNT). Trustees must have the necessary expertise to manage the trust, including making proper investments, paying bills,...more

New Investment Thinking for Trustees?

Traditionally, trustees invest the assets within a trust to ensure the assets are preserved for when they are distributed to the beneficiaries, often when the beneficiaries reach a certain age. However, this “cautious”...more

Does the settlor of a trust have standing to seek its enforcement in the courts?

As a general rule, any beneficiary of a trust would have standing to seek its enforcement in the courts. The Restatement (Third) of Trusts is sending mixed signals as to whether the settlor of a trust, qua settlor, would have...more

How the New Washington Trust Act and its 2013 Amendments Affect You and Your Clients - December 2013

In 2011, the legislature adopted a new Washington Trust Act (the “2011 Act”). The 2011 Act took effect on January 1, 2012, and codified many changes to the duties of trustees and the rights of trust beneficiaries. Within 18...more

Wealth Management Update - December 2013

The December § 7520 rate for use with estate planning techniques such as CRTs, CLTs, QPRTs and GRATs is 2.0%, which is unchanged from last month. The December applicable federal rate ("AFR") for use with a sale to a defective...more

Now, How Do I Decant a Trust?

Decanting has been Texas law for almost three months and several articles have discussed what can be accomplished by decanting (e.g., Bill Pargaman’s 2013 Legislative Update). This article will discuss the documents needed...more

The Uniform Trust Code’s stealth attack on the Trustee’s time-honored duty to defend his trust

One of the critical duties of a trustee traditionally has been to defend his trust against internal attacks. By that I mean to defend the trust against those who, in contravention of the settlor’s intentions as expressed in...more

The Limits of Discretion: Trust Distributions for Health, Education, Maintenance and Support

Trustees are often granted the power to distribute trust property “in the Trustee’s discretion” for a beneficiary’s “general well-being,” “best interests,” “comfort,” or, most commonly, “health, education, maintenance and...more

C. Court Did Not Abuse Discretion In Denying Attorney's Fees To Successful Beneficiary In Declaratory Judgment Action

In Estate of Richardson, a remainder beneficiary of a trust filed a declaratory judgment action to declare that the trust would terminate five years after its creation. No. 14-12-00516-CV, 2013 Tex. App. LEXIS 2664 (Tex....more

Offshore Professional Risks - June 2013

Sedgwick’s Offshore Professional Risks practice offers a unique and global perspective on professional risk. As the only law firm in the world with offices in the key insurance jurisdictions of Bermuda, London and the U.S.,...more

Does Attorney-Client Privilege Belong to the Trustee or the Beneficiary?

Attorney-client privilege has long been protected in California and U.S. courts. Its origins go as far back as legal practices used in ancient Rome and later in English Common Law. The U.S. Supreme Court has reaffirmed the...more

Trustee Empowered To Void Foreclosure Sale Where Error Discovered Before Delivery Of Trustee’s Deed

California’s Supreme Court affirmed a trustee’s right to void a non-judicial foreclosure sale based on mistakes in the foreclosure process discovered before delivery of a trustee’s deed to the successful bidder. ...more

Whose Standing Is It, Anyway?

Does the trustee of a revocable trust ever have a duty to account to the remainder beneficiaries of the trust? The Supreme Court of California says yes, but not until after the death of the settlor. In a recent decision, In...more

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