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Limits Of Exculpatory Clauses In Trusts

August 12, 2015

Authors

Luke Lantta

Limits Of Exculpatory Clauses In Trusts

August 12, 2015

by: Luke Lantta

Many trustors want to give their trustees wide berth to administer the trust.  In a lot of cases that makes sense because the trustee does not need someone second guessing every discretionary act taken during the life of a trust.  One way a trustor may try to give a trustee room in administering the trust is by including an exculpatory clause in the trust that relieves the trustee from liability for actions that might otherwise be considered a breach of duty.  Of course, trustees appreciate these kind of clauses.  Some jurisdictions defer to these clauses; some do not.  In Rafert v. Meyer, the Supreme Court of Nebraska invalidated a provision in a trust that provided that the trustee had no duty to pay the insurance premiums on 3 insurance policies that constituted the corpus of

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Actions Taken In Partnership May Affect Fitness To Serve As Trustee

April 29, 2015

Authors

Luke Lantta

Actions Taken In Partnership May Affect Fitness To Serve As Trustee

April 29, 2015

by: Luke Lantta

For how long estate planners have been using interconnections between trusts and family entities as estate planning techniques, only recently have appellate courts outside of New York started to tackle these issues in reported decisions.  In In re Estate of Stuchlik (as modified, in part, here), the Supreme Court of Nebraska addressed – but did not answer – a question left open by the Supreme Court of Georgia in Rollins v. Rollins: what’s the appropriate standard of care when a trust holds a controlling interest in a family entity?

Edward J. Stuchlik, Jr. and his wife, Margaret, had a pretty common estate plan.  They formed a limited partnership into which they conveyed all the farm real

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Conflict Of Interest Warranted Judicial Removal Of Personal Representative And Trustee

October 31, 2013

Authors

Luke Lantta

Conflict Of Interest Warranted Judicial Removal Of Personal Representative And Trustee

October 31, 2013

by: Luke Lantta

Individual trustees who must administer real property often attempt to save the trust money by personally making certain improvements, repairs, or maintenance to the property.  They then charge the trust for the work they performed.  As the Nebraska Court of Appeals points out in In re Estate of Robb, however, these acts – however well-intentioned – may be self-dealing and can put the trustee in a position of a conflict of interest, which can warrant removal from that fiduciary position.

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