Accounting by JP Morgan Chase Bank NA
NEW YORK COUNTY
Trusts and Estates
Surrogate Kristin Booth Glen
In a case revealing a severely disabled, institutionalized young man, Mark, dependent on Medicaid and virtually abandoned, despite a multi-million dollar trust established by his deceased mother for his care, important questions regarding the obligations of fiduciaries, including institutional trustees, to beneficiaries, with disabilities, of trusts seeking to provide for these beneficiaries' welfare, were raised. The court noted that after a "serendipitous" Surrogate's Court Procedure Act Article 17-A proceeding, the co-trustees, were "called to task," after the court found that only .1 percent of an almost $3 million trust was actually expended on Mark. Accordingly, a certified care manager was hired to attend to Mark's needs, and such intervention significantly improved his quality of life, and functional capacity to enjoy a "near normal" existence in the community, including reunification with his brother. The court noted the words "absolute discretion" did not insulate trustees from liability, finding the trustees failed to exhibit a reasonable degree of diligence towards Mark, abusing their discretion by failing to exercise it. It concluded the trustees' failure to fulfill their fiduciary obligations should result in denial or reduction of their commissions for the period of their inaction.