Early Detection of Possible Pitfalls in Fiduciary Obligations Can Prevent Later Problems – Journal | January 2002
January 05, 2002
From the fiduciary’s perspective, the conflicts of interest that generally arise are traceable to the fiduciary relationship itself. Early recognition and treatment of the potential legal and ethical pitfalls can avoid later problems and expensive litigation.
The basic principles that govern the relationship between and among fiduciaries are embodied in New York Estates, Powers and Trust Law (hereinafter “EPTL”) 10-10.7, which requires that fiduciaries act by majority rule in important matters. (See box, page 23.)
The statute draws a distinction between the exercise of “joint” and “several” powers, without defining them. “Several” powers are those that are purely ministerial in nature and do not involve the exercise of fiduciary discretions. The cases hold that matters such as collecting estate assets, paying debts, compromising a claim, selling personal property at fair market value and paying of funeral expenses are ministerial in nature and may be exercised by a single fiduciary.1
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Reprinted with permission from: New York State Bar Association Journal, January 2002, Vol. 74, No. 1, published by the New York State Bar Association, One Elk Street, Albany, NY 12207.
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