Trustees make difficult decisions about estate or trust investments, distributions and requests for disclosure of financial information. If an estate holder’s investment portfolio is comprised of assets held by onshore and offshore institutions, trustee decisions are especially at risk of an inquiry giving rise to significant claims. Where ambiguities exist, the prudential authority of an estate or trust entity must follow the laws of all jurisdictions involved. An estate attorney can provide a trustee with legal representation in a petition for court instructions in an estate or trust litigation matter.
In the United States, the common law of estates provides trustees with prudential authority unless there Is reasonable doubt that the discretionary powers or duties are unreasonable (Restatement (Second) of Trusts § 259 (1959)). The Uniform Trust Code (UTC) allows for “judicial proceeding[s]] involving a trust may relate to any matter involving the trust’s administration, including a request for instructions[.]” (UTC § 201(c) (2010)). U.S. courts generally do not interfere prior to the exercise of a trustee’s discretionary authority, and trustees are entitled to request court instructions absent of a legal dispute.
Offshore jurisdictions offering tax-exempt investment and asset protection from creditors through banking and financial services, generally do not prohibit any significant decision by a trustee within the confines of the law of the land. In other words, offshore jurisdiction’ courts have never found trustees to not have such authority. Trustees can generally petition for court review of “momentous decisions,” however, if there is some question about the right to, or regulation of, those assets. Offshore courts generally do not require actual dispute between parties for review of such requests as it is considered of substantial value to the jurisdictions where those accounts are held.
New York law does not provide the same creditor asset protections as an offshore jurisdiction would (NY CLS EPTL § 7-3.1). Nevertheless, the New York statutes authorize state courts to exercise broad discretion with trustees seeking advisory. The state also recognizes the latest the Employee Retirement Income Security Act 1974 (ERISA) reforms in 2017, binding all trustees of sponsored pension fund assets as fiduciaries. The expansion of prudential authority to all financial services professionals, including investment advisers to fiduciary responsibility under federal law, has important effect on estate trustees in their capacity to act on behalf of trust funds.
A trustee of an estate or trust portfolio holding offshore assets? An attorney at law specializing in estate planning can assist a client with investment planning, administration, distributions, and disclosure of changes to an estate or trust.
Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about a trust investment related matter.
Estate Planning content and filler articles for your newsletters.
Trustees make difficult decisions about estate or trust investments, distributions and requests for disclosure of financial information.
This is the definitive resource for professional gift planners. It covers all of the relevant information you’ll ever need as far as technical details go.