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Prudent Investor Rule, Asset Management, Fiduciary Litigation

A fiduciary (e.g., trustee, personal representative, etc.) has an obligation to invest and manage assets as a “prudent investor” would. When making investment and management decisions, the fiduciary should consider the purposes, terms, distribution requirements and other circumstances of the trust or fiduciary relationship. O’Riley v. US Bank, NA, 412 S.W.3d 400, 414 (Mo. Ct. App. […]

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Trustee Good Faith Discretion, Breach of Trust

A trustee has the duty to exercise the requisite care, skill and diligence of a person of ordinary prudence would exercise. Jarvis v. Boatmen’s National Bank of St. Louis, 478 S.W.2d 266, 273 (Mo. 1972). The specific actions necessary to accomplish this goal depends on the nature of the trust, particularly its assets and distribution schemes. […]

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Special Skills/Expertise of a Trustee

A trustee owes an array of fiduciary duties to trust beneficiaries. The nature and extent of these duties can potentially be enlarged if the trustee possesses special skills or expertise. Under Section 456.8-806, RSMo, “[a] trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that the trustee […]

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Trust Opportunities, Trustee Breach of Loyalty

Corporate directors/officers and trustees are similar in that they are both fiduciaries and owe others (i.e., shareholders or beneficiaries, respectively) a duty of loyalty. As part of the duty of loyalty, the “corporate opportunity doctrine” forbids a corporate director from acquiring for his or her own benefit an opportunity that would have been valuable and […]

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Trust Litigation

Trust litigation is becoming more frequent. This is due to a number of factors, such as changes in trust laws and an ageing segment of the population who created trusts. Another important factor is that the Uniform Trust Code, which has been mostly adopted in Missouri, permits a broad range of individuals to file lawsuits […]

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Missouri Trust Litigation: Proposed Distribution, Objecting to Distribution

Sometimes a trustee is unsure of how to distribute the assets. This can occur even where the terms of the trust are clear. This sometimes is caused by the nature of the assets (e.g., difficult to divide real estate), threats of litigation, or disputes on how things should be divided among the beneficiaries. There are Court […]

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Delegation by Trustee, Agents

A trust administration can be complex, particularly if it includes securities, real estate or business interests. Sometimes more than just the trustee is needed to make decisions. As a general rule, trustees are entitled to delegate to an agent duties and powers that a prudent trustee could properly delegate under the circumstances. Lorimont Place, Inc. v. […]

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Trustee Removal Lawsuits, Litigation

If you are unhappy with a trustee, can you remove the trustee? The answer to that question is “yes,” but there needs to be a specific legal basis for it. You will not prevail on a trustee removal case in court simply because you do not like the trustee(s).  Section 456.7-706, RSMo governs trustee removal in […]

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Exculpatory Trustee Clauses

Being a trustee is a difficult job. The trustee owes a litany of fiduciary duties to the beneficiaries, but the beneficiaries do not have any similar duties to the trustee. It is a one way street. The job is made all the more difficult depending on the terms of a particular trust instrument. To make […]

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Trusts: Trustee Duty to Report & Inform

As part of a trustee’s general fiduciary duty, a trustee must keep qualified beneficiaries reasonably informed about the status of the trust and of facts necessary for them to protect their interests. Section 456.8-813, RSMo. Because this is a fuzzy standard and is quite fact intensive, the Missouri Trust Code states that a trustee presumptively […]

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