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A Tense Time For Trust AdministrationA Tense Time For Trust Administration
In 2006, courts spoke to two important issues in trust administration. The Dumont case was overturned,1 providing a brief respite for trustees that own large stock concentrations. And Rudkin was affirmed,2 seeming to confirm that, at least in the Second Circuit, investment management fees incurred by trusts cannot be fully deducted for income tax purposes. These cases involve two of the most difficult
January 1, 2007
Gail E. Cohen, executive vice president and general trust counsel, Fiduciary Trust Company Intern
In 2006, courts spoke to two important issues in trust administration. The Dumont case was overturned,1 providing a brief respite for trustees that own large stock concentrations. And Rudkin was affirmed,2 seeming to confirm that, at least in the Second Circuit, investment management fees incurred by trusts cannot be fully deducted for income tax purposes. These cases involve two of the most difficult issues in trust administration: investing a trust with an undiversified asset concentration and deducting investment management fees. Even with these decisions, trustees do not have complete certainty about these key responsibilities, diversific...
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