Thursday, February 26, 2015
In In re Estate of Stuchlik, the Nebraska Supreme Court affirmed dismissal of all the actions relating to the estate because it was already closed but reversed and remanded on the issue of trustee removal based on the co-trustees’ management of a partnership in which the trust held both a minority limited partnership interest and a one percent general partnership interest. Another one percent general partnership interest was held by the mother in her own right and together with the trust interest effectively gives mother all of the general partnership interest.
The Court reasoned that because trustees must deal with entities held in trust in the best interests of the beneficiaries, a trustee’s management of the entity may violate the duty of loyalty and the duty to act impartially between beneficiaries, and therefore is an appropriate subject of inquiry in a removal proceeding so long as the evidence offered pertains to the co-trustees’ actions in their capacity as trustees.
Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.