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CT Law Tribune - Help Fledgling Fiduciaries Learn To Fly.

Article Excerpt
Attorneys' advice can keep parties from falling prey to lawsuits

Fiduciary litigation is on the rise, as evidenced by the U.S. Supreme Court's ruling in LaRue v. DeWolff, Boberg & Assoc. Inc., last month, which opened the door to previously disallowed claims by individual ERISA plan participants for breaches of fiduciary duty. Researchers estimate that by 2052, up to $136 trillion dollars will have been transferred from the retiring baby boomer generation to the next. Countless fiduciaries, including trustees, executors, financial professionals, or attorneys, will be involved in transferring and managing this wealth. Their actions will be subject to increasing legal challenges by beneficiaries and others.

Claims should not be unexpected as even "sophisticated" individuals will usually have little experience with such matters. Fiduciaries are often treated like nestlings. Ready or not, they are named fiduciaries and are suddenly pushed out of the nest, forced to learn to fly on their own. The fiduciaries assume their positions without knowing what their duties are, how best to perform them, and the risks for failing to do so. With preparation and advance planning, you can help these fiduciaries take flight and soar over the potential litigation traps beneath them.

Who is A Fiduciary? A fiduciary is a person or entity that, by virtue of a "fiduciary relationship" between two or more parties, owes the other party certain legal duties involving good faith, trust, confidence, and candor. Fiduciary relationships involve much more than just the typical situations involving trustees and executors. Courts have tended to broaden...

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