March 27, 2014
Authored by: Luke Lantta
As part of wealth planning, trustees are frequently put in charge of corporate entities in which the trust owns an interest. When it comes to the trustee’s corporate duties and actions with respect to the corporate entity, what is the appropriate standard of care? Is it a corporate level fiduciary standard or is it the heightened trustee level fiduciary standard? Jurisdictions are split on this issue. The Georgia Supreme Court in the case of Rollins v. Rollins, is the latest state to weigh in on the issue. In reaching its opinion, the Georgia Supreme Court resolved some issues, set some thresholds, and left open a few questions.
To understand the Court’s opinion, we must first understand the structure of the trusts and family entities involved. O. Wayne Rollins established ten irrevocable trusts, the Rollins Children’s Trust (“RCT”), and nine Subchapter S-trusts, each for the