Apr 13, 2018

Repairing a Broken Trust

Irrevocable Trust

A trust usually forms a critical part of one’s estate plan. For example, it is often used to transfer: Family wealth to the younger generation in a tax efficient manner; Interests in family businesses; Property in a way that protects a beneficiary from his or her otherwise unfettered spending; Property so that it is protected from a beneficiary’s creditors; and Property so that it is protected in the event of divorce. Broadly speaking, there are two types of trusts, i.e., revocable and irrevocable. A revocable trust can be amended or revoked by the grantor – the person who set up… Read more

Sep 15, 2010

Three Rules Never to Forget if You Are a Beneficiary (or Trustee)

Posted by: Paul J. Sowell, Esq. We have previously commented on the proliferation of fiduciary litigation and in particular the growth of lawsuits against trustees.  We believe the reasons for this rise are both subtle and at the same time complex.  Among the most prominent reasons (but by no means exclusive) is that non-professional trustees lack sophisticated knowledge of the Prudent Investor Rule and its application.  Moreover, family members serving as trustee usually have little knowledge in investment management and seldom have any background in law or accounting. With this in mind, we thought it would be useful to review… Read more

Jun 1, 2010

Constructive Fraud Claim May Prevent Children from Chopping Widow out of Benihana Fortune

Authored by: Michael C. Levy, Esq. When a fiduciary relationship exists, whether between a trustee and beneficiaries or a lawyer and their clients, it is incumbent upon the fiduciary to keep the people they represent informed and to ensure that the represented parties understand the actions being taken on their behalf.  Failure to do so could have very negative consequences and, as shown in a recent decision by the New York Surrogate’s Court, may allow aggrieved parties to raise claims of constructive fraud. In 2002, Rocky Aoki, the founder of the Benihana restaurant chain, married for the third time.  Prior… Read more

May 14, 2010

Trust Beneficiaries Get One Bite of the Apple

Authored by: Paul J. Sowell, Esq. With the recent volatility in the economy and markets, wealth advisers have been preaching to trustees the need to have well defined investment protocols which fully address risk.  On the flip side of the coin, it is incumbent on trust beneficiaries to fully understand what actions have been taken by their trustee in managing their trust account and to only sign off on such actions after thoughtful reflection and professional advice. A recent example of this need for vigilance is the Matter of HSBC Bank U.S.A., 2010 N.Y. App. Div. LEXIS 1120.  In this… Read more