Written by: REBECCA KLOCK SCHROER, JD, & MORGAN WIENER, JD

Trustees face a number of complexities when administering a trust that owns interests in a closely held business. This article focuses on two of those complexities:

(1)  Which standard of care applies to the trustee’s business decisions: the fiduciary or the corporate standard of care?

(2)  What is the trustee’s obligation to produce information about the business to the trust’s beneficiaries?

Because there is no national consensus on either of these issues, this article will first provide an overview of each issue and then review leading cases exemplifying the different approaches taken by courts.

One-size-fits-all estate plans are impracticable due to the differences and varying complexities in each person’s estate. It is imperative to tailor an estate plan to meet each client’s needs and goals, so the drafting attorney must understand the character of the assets in the client’s estate and the planning options best suited for each client. Because high net worth clients are often very protective of their assets, planning objectives and recommendations for clients with large estates will almost always differ and be more complex than those for other clients.

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