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Legal Memorandum: Trustees' Duties for QTIP Trusts

Issue: What is the law governing trustees’ duties with regard to QTIP trusts in New York state?

Area of Law: Estate Planning & Probate, Tax Law
Keywords: Suspension of income distributions; Trustee's duties; QTIP trusts
Jurisdiction: New York
Cited Cases: None
Cited Statutes: None
Date: 03/01/2010

Estate of Louis Weisman, New York Surrogate’s Court, New York County, 660 N.Y.S.2d 652 (1997) (A trustee who had misread the tax apportionment law and improperly withheld trust income to meet the estate’s tax liability did not willfully breach his fiduciary responsibilities, and his conduct did not warrant his removal.  The trustee refused to co-sign trust income checks payable to the beneficiaries of two qualified terminable interest property trusts established by a surviving spouse because the trustee had been using the income to pay the estate taxes.  The income beneficiaries subsequently filed a petition to revoke the trustee’s letters.  It was determined that the trustee’s suspension of income distributions was not supported by the law or by the circumstances, and the trustee was ordered to immediately distribute the withheld amounts to the beneficiaries.  However, it was also determined that the trustee’s conduct did not warrant his removal.)

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