TRUST & FIDUCIARY LITIGATION

A fiduciary duty is the highest duty imposed by law, and is imposed on trustees, as well as on executors and administrators of estates.

Carmen D. Caruso has obtained a recovery in excess of $1.5 million on behalf of a trust beneficiary who was victimized by two of his brothers, who were co-trustees of a trust created by their father, where the co-trustees arranged for the transfer of valuable real estate to a new trustee in which they, but not their brother, was a beneficiary.  The trustee-defendants argued, without success, that this transfer was a permitted “Starker” exchange under the Internal Revenue Code.  In fact, the transfer was not permitted because the trustees had taken advantage of their beneficiary, without his knowledge or consent.

Mr. Caruso has also litigated claims by trustees against their co-trustees for breaching their fiduciary duties, which allegedly resulted in injury to some of the trust beneficiaries.  In a recent 2003 case, the Circuit Court held that one co-trustee would lack standing to sue the other co-trustees, absent affirmative evidence that the injured beneficiaries were in favor of the litigation.  Mr. Caruso and his client disagreed with that ruling and filed an appeal, on the grounds that family members should not be forced to take sides in litigation, and that the avoidance of family disputes had been an important reason why the property had been placed in trust in the first place.  This case was settled while the appeal was pending.