Successor Trustee LiabilitySuccessor Trustee Liability
In recent years, as the economy has faltered and banks have failed, merged and re-emerged, the fiduciary business with its annuity revenue stream seems more attractive than ever. But is it, really? The fact is that the fiduciary business can be a bit of a minefield. Issues that could destroy profits (and peace of mind) include surcharges, loss of fiduciary commissions resulting from a predecessor's
Irina S. Shea & Kevin Matz
In recent years, as the economy has faltered and banks have failed, merged and re-emerged, the fiduciary business with its annuity revenue stream seems more attractive than ever. But is it, really? The fact is that the fiduciary business can be a bit of a minefield. Issues that could destroy profits (and peace of mind) include surcharges, loss of fiduciary commissions resulting from a predecessor's errors, plus additional risk management costs.
What's a successor trustee to do? There are some practical preventatives and solutions — ranging from exculpatory and indemnification clauses to decanting and alternative dispute resolution procedures. Here are the general rules of the road.
Legal Backdrop
As a general princ...
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