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Delegating investment and management functions
EPTL 11-2.3(c) provides that a trustee may delegate investment and management functions, exercising care, skill and caution in selecting a suitable delegee, in establishing the scope and terms of the delegation consistent with the purposes of the instrument, in periodically reviewing the delegee's exercise of the function, and in controlling the overall cost of the delegation.
The delegee owes the trustee and the trust a duty to comply with the scope and terms of the delegation and to exercise the function with reasonable care, skill and caution, and an attempted exoneration of the delegee from liability for failing to meet that duty is void (EPTL 11-2.3(c)). Delegating does not remove the trustee's own duty to select and to monitor.
Custodians and the costs of administration
EPTL 11-1.1(b)(9) allows a fiduciary to employ a qualifying bank or trust company as custodian of the securities held as fiduciary, and EPTL 11-1.1(b)(22) allows the payment of the reasonable and proper expenses of administration from the trust, including the reasonable counsel fees the fiduciary necessarily incurs.
Whether an expense was reasonable and proper is measured when the account is settled, which is one reason trustees keep each engagement letter and invoice with the ledger.
The court's review of attorney fees
SCPA 2110 provides that the Surrogate's Court may, at any time during administration, fix and determine the compensation of an attorney for services to a fiduciary or a person interested, direct its payment from the estate, and order a refund of any amount paid beyond the fair value of the services.
Communications between a trustee and the trustee's own attorney are protected: CPLR 4503(a)(2) provides that where an attorney represents a lifetime trustee in that capacity, a beneficiary is not the client by status alone, and the fiduciary relationship does not by itself waive the privilege.
What stays with the trustee
Agents carry out functions; the trustee keeps the duties. The trustee still keeps the property separate (EPTL 11-1.6), allocates between principal and income impartially (EPTL 11-A-1.3), and answers for the selection and monitoring of every delegee (EPTL 11-2.3(c)). A licensed New York attorney of the trustee's choosing can explain how a particular engagement fits those duties.
Lwa yo, mo pou mo
Attorney
CPLR 4503 ↗Eksplikasyon klè e senp; tèks egzak lwa a poko ateste nan bibliyotèk nou an. Gade lwa ofisyèl la nan lyen ki anwo a.
Fiduciaries' powers
EPTL 11-1.1 ↗Eksplikasyon klè e senp; tèks egzak lwa a poko ateste nan bibliyotèk nou an. Gade lwa ofisyèl la nan lyen ki anwo a.
Prudent investor act
EPTL 11-2.3 ↗Eksplikasyon klè e senp; tèks egzak lwa a poko ateste nan bibliyotèk nou an. Gade lwa ofisyèl la nan lyen ki anwo a.
Compensation of attorneys
SCPA 2110 ↗Eksplikasyon klè e senp; tèks egzak lwa a poko ateste nan bibliyotèk nou an. Gade lwa ofisyèl la nan lyen ki anwo a.
Kesyon moun poze souvan
Can a New York trustee hire an investment manager?
Yes. EPTL 11-2.3(c) allows a trustee to delegate investment and management functions with care in selecting the delegee, setting the scope and terms, and reviewing the delegee's actions; an attempted exoneration of the delegee is void.
Can a New York trustee pay a lawyer from the trust?
The reasonable counsel fees a fiduciary necessarily incurs are an expense of administration (EPTL 11-1.1(b)(22)), and the Surrogate's Court may fix an attorney's compensation and order a refund of any excess (SCPA 2110).
Are a New York trustee's talks with their lawyer confidential?
Generally yes. Where an attorney represents a lifetime trustee in that capacity, a beneficiary is not the client by status alone, and the fiduciary relationship does not by itself waive the privilege (CPLR 4503(a)(2)).
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