Millionaire financier Jeffrey Epstein killed himself on August 10, 2019 while in prison awaiting trial for charges including federal sex trafficking. Shortly before his death, Epstein signed a pour-over will placing approximately $577 million in assets into a trust. Many believe the creation of this trust was an attempt by Epstein to shield his vast wealth from civil lawsuits brought by his many accusers. What is a pour-over will, and will Epstein’s attempt prove successful? Pour-Over Wills Pour-over wills are common tools for estate planning. They are wills used in conjunction with a living trust. When a settlor (the creator of a trust) creates a living trust, certain…
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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…
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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…
