Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: February 5, 2014
The Firm
201-896-4100 info@sh-law.comIt is difficult to ascertain when a claim against a trustee arises because the act giving rise to the claim may not be disclosed to the beneficiary. Therein lies the tension between the common law traditions of statute of repose (limitations) and the Doctrine of Laches (“Laches”).
Laches attempts to impose a standard that recognizes a reasonable balance of the interests of the two sides. The beneficiary may not be aware of he trustee’s breach of duty for many years after the event so it is unfair to impose a deadline measured from the date of the breach. It is also unfair that a trustee face potential liability forever. Laches attempts to balance the competing interests by requiring the beneficiary to bring an action within a reasonable time of learning of the event of breach giving rise to the claim.
When does a beneficiary learn of the breach and gain sufficient knowledge of the law to know he or she has a claim against the trustee? This intensely factual inquiry consumes considerable resources before the alleged breach of duty is analyzed and debated.
The Uniform Trust Code (UTC) attempts to provide a greater measure of certainty in this murky area with a bright-line five (5) year statute of repose (limitations). The UTC calls for a trust beneficiary to bring an action against a trustee for breach of trust within five (5) years of: (1) removal, resignation of death of trustee; (2) termination of the beneficiary’s interest; (3) termination of the trust.
Two issues arise from the UTC’s five-year rule. First, a trustee that fails to report to the beneficiaries or adequately disclose sufficient information may not be able to avail itself of the rule. Some view this as encouraging a trustee not to disclose. Others believe the requiring the trustee to report annually is sufficient. Second, it is unclear what state law exceptions apply to the five year rule of the UTC.
We expect that three (3) exceptions toll the UTC’s five (5) year rule. Fraud is one exception, however, is not a specified exception in the UTC. Unjust enrichment may or may not toll the statute from running. Finally, trust reformation may avoid the five-year rule.
What happens when an attorney represents a trustee who has breached a duty? Does the attorney protect the trustee as an individual or as a fiduciary? Would the trustee have the benefit of the five-year statute yet the trustee’s agent and attorneys might not? So far, it appears the UTC does not cover attorneys. Is the imputation of knowledge of an agent to the trustee enough to overcome the five-year rule and snare the trustee?
At times, it is difficult to draw a bright line through equity’s maze of duty and doctrines.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
NYC Real Estate and Litigation Attorney Ryan O. Miller and Team Join Scarinci Hollenbeck, LLC New York City, NY – August 13, 2025 – Scarinci Hollenbeck, LLC has strengthened its Real Estate and Litigation practices with the addition of four New York City-based attorneys. Ryan Miller, who joins as a partner, is well known for […]
Author: Scarinci Hollenbeck, LLC
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!