Thursday, April 17, 2014
Actions of a Trustee as Manager of Entity in Which Trust Holds an Interest Will Be Judged by Corporate Standards
The settlor created trusts for the benefit of family members which held minority interests in entities carrying on various family businesses. The settlor’s son was the trustee of nine of the trusts which were Sub S trusts and managed the entities with his brother. Some of the beneficiaries sued the trustee alleging breach of trust and the trial court granted summary judgment to the trustee. On appeal, the judgment was reversed and remanded. The Georgia Supreme Court granted certiorari and reversed the intermediate appellate court holding that with regard to the entities, the trustee is to be held to a corporate fiduciary standard because the settlor did not give the trustee control over the entities and because the trusts held minority interests in the entities. Rollins v. Rollins, No. S13G1162, 2014 WL 819500 (Ga. Mar. 3, 2014).
Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.