• Uncategorized

    Breach of Trustees’ Fiduciary Duty – Part 3: Duty to Administer Trusts Prudently and Duty to Inform, Report, and Maintain Adequate Records

              In Part 2 of this series, we examined trustees’ duties of loyalty and impartiality.  This post will examine the duty to administer trusts prudently and Part 4 will discuss the duty to delegate – or not delegate – in more depth.  The duty to administer trusts involves the basic values of good faith, while the duty to inform, report, and maintain adequate records involves the reasonableness of a trustee’s actions.  While these principals seem straight forward, they are a bit nuanced in practice.     Duty to Administer Trusts Prudently             The duty to administer trusts prudently mandates trustees carry…

  • Blog Post

    Breach of Trustees’ Fiduciary Duty – Part 1: General Considerations

              This is the first of a four-part series examining trustee’s fiduciary duties and the circumstances that could result in litigation.  To begin, we will discuss basic principles that will lay a groundwork to inform our larger discussion.     What is a Trust and a Trustee?[1]             A trust is a financial instrument or tool through which people can transfer their assets to others over time.  People who create trusts are called “settlors,” because they “settle” or initially put assets into the trust.  Those who stand to benefit from the assets in the trust are known as “beneficiaries.”  The person…

  • Blog Post

    Six Basic Questions and Answers about Executors

              If you have a will or have ever dealt with estate administration, you are probably familiar with the term “executor.”   However, most people don’t know what an executor is or what the executor’s role is.  Additionally, what do you do if you suspect an executor is behaving fraudulently or contrary to the deceased person’s wishes?   What is an executor?             An executor is a person or institution appointed to carry out the terms of a person’s will.  They are appointed by the person who wrote the will, the testator, to conclude the business and financial arrangements the testator had…

  • Blog Post

    North Carolina Court of Appeals Clarifies Reach of Clerk of Court’s Original Jurisdiction

              A recent decision by the North Carolina Court of Appeals reinforced the distinction between claims over which the trial divisions have original jurisdiction and claims which are properly brought before the Clerk of Court.[1]             In Morgan-McCoart v. Matchette, an elderly woman, Ms. Simpson, created a revocable trust and executed a Durable Power of Attorney in 2008.  Her daughter, Julie, was named as her trustee and attorney-in-fact, and her other daughter, Claudia, was named as the alternate trustee and attorney-in-fact.   Ms. Simpson was declared incompetent in 2009.  Julie lived in California, making it difficult to fulfil her duties.  Accordingly, Julia…

  • Blog Post

    On Mandating Trustees’ Duty to Inform and Report

    Twenty-three years ago, Clark “CB” Bagby, Jr. assumed control of his father’s already successful demolition and grading company and grew it into one of the largest in the Southeast.  Only one of his four children showed any promise or passion for the family business, the others content to enjoy its fruits.  CB, the sole shareholder of the eponymously named CBDG, Inc., is acutely aware of his need for succession planning and is equally determined to make it as painless for himself as possible.   “I want them to know I’ve taken care of them, but I don’t want to be pestered about what I gave them, whether it’s enough, or…

  • Blog Post

    Creating a Successful Wealth Management Plan: Is a Corporate Trustee Right for You?

         As the aging baby boomer generation reaches retirement age and beyond, their wealth management decisions will significantly influence the demand for fiduciary services. Twenty-first century technology makes it easier than ever to retrieve up-to-date financial information and self-help investment guides. Accordingly, baby boomers and subsequent generations are more financially sophisticated than their parents, and increasingly responsible for their own savings, income, and financial future.        While many “boomers” feel comfortable managing their own assets, they are almost three times more likely to appoint a corporate trustee to manage wealth and inheritance for future generations.1 Motivations behind this decision include the increasing complexity of wealth management, reluctance…