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Legal Memorandum: Estate Co-Trustee's Obligations

Issue: What are an Estate Co-Trustee’s Obligations to Cooperate or Share Information?

Area of Law: Estate Planning & Probate
Keywords: Co-trustee; Standard of honesty
Jurisdiction: New York
Cited Cases: 616 N.Y.S.2d 684; 41 N.Y. 117; 260 N.Y.S.2d 989; 30 N.Y.2d 510; 63 N.E.2d 117; 280 N.E.2d 887; 274 A.D. 244; 321 N.Y.S.2d 438; 242 A.D.2d 202; 269 N.Y.S.2d 989; 258 A.D.2d 382; 662 N.Y.S.2d 5; 164 N.E. 545
Cited Statutes: Restatement (Second) Trusts § 107
Date: 11/01/2007

Co-fiduciaries are regarded in law as one entity. Zimmerman v. Pokart, 242 A.D.2d 202, 662 N.Y.S.2d 5, 7 (1st Dep’t 1997).  A strict standard of honesty is required from a trustee in dealing with his co-trustee.  Estate of Lipsit, 50 Misc. 2d 289, 269 N.Y.S.2d 989, 992 (Surr. Ct. 1966).  Many courts and treatises addressing the responsibilities of co-trustees to cooperate have cited Judge Cardozo’s famous statement of this standard:

Many forms of conduct permissible in a workaday world for those acting at arm’s length, are forbidden to those bound by fiduciary ties.  A trustee is held to something stricter than the morals of the market place.  Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior * * * the level of conduct for fiduciaries * * * will not consciously be lowered by any judgment of this court.

Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545 (1928), quoted in Estate of Lipsit, 269 N.Y.S.2d at 992.

The Lipsit court then stated:

Where friction between the trustee and beneficiary, or between the trustee and his co-trustee, interferes with the proper administration of the trust, or if future cooperation between the trustees is improbable, or if the trustee’s continuing to act as such would be detrimental to the interests of the beneficiary, said trustee may be removed by the court. 

Id. at 293, 269 N.Y.S.2d at 993 (citing Quackenboss v. Southwick, 41 N.Y. 117 […]

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