Feuding FiduciariesFeuding Fiduciaries
Being a trustee entails risk of personal liability. Being one of a number of trustees can increase the risk. In the legendary Matter of Rothko,1 a fiduciary that failed to try to prevent his co-fiduciaries from breaching their duties was surcharged $6 million. This cautionary tale sends a clear message: Know the state law that governs when a group or pair of fiduciaries disagree or even deadlock.
Charles F. Gibbs, partner, and Maureen S. Bateman, partner, Holland & Knight LLP, New York and Bo
Being a trustee entails risk of personal liability. Being one of a number of trustees can increase the risk. In the legendary Matter of Rothko,1 a fiduciary that failed to try to prevent his co-fiduciaries from breaching their duties was surcharged $6 million.
This cautionary tale sends a clear message: Know the state law that governs when a group or pair of fiduciaries disagree or even deadlock.
JOINT OR SEVERAL POWERS
Trustees sometimes disagree on how to exercise their joint powers. What to do? First, determine whether the power to be exercised is joint or several. Powers that are ministerial in nature, such as collecting assets and dischargi...
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