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Oct 18, 2010

Trustee of The Hershey Trust Investigated for Alleged Sweet Deal

Authored by: Paul J. Sowell, Esq. A few weeks back, we took a look at some pertinent sections of the Restatement (Third) of Trusts: Prudent Investor Rule.  As discussed, Section 170 deals with a trustee’s duty of loyalty and states as follows: (1) The trustee is under a duty to administer the trust solely in the interest of the beneficiaries. (2) The trustee in dealing with a beneficiary on the trustee’s own account is under a duty to deal fairly and to communicate to the beneficiary all material facts the trustee know or should know in connection with the transaction…. 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 2, 2010

Court Finds That Corporate Trustee Prudently Managed A Concentrated Stock Position

Authored by: Paul J. Sowell, Esq. The recent case of Karo v. Wachovia Bank, N.A., 2010 WL 1930118 is a prime example of how a bank acting as a co-trustee successfully defended against a claim that it breached its duty of prudence by holding a concentrated stock position. In 1966, Rosalie S. Karo established the Karo Inter Vivos Residual Trust for the benefit of her husband, Toney, and her descendants. Through a series of mergers, Wachovia ended up as a co-trustee of the trust along with Rosalie’s husband, Toney.  At the time Wachovia Bank became a co-trustee, the trust owned… Read more