George Michael and Justices Kern, Friedman, Kapnick, Shulman, and Hagler agree on one thing: you gotta have faith. The real question is to whom that faith belongs.
For George Michael, the answer is yourself. Think twice before giving your heart away. Know the games being played. Do not let emotion take over.
New York law takes a different view when it comes to trustees. Trustees owe a duty of loyalty to the trust and its beneficiaries, not to their own interests. That duty is strict. Trustees cannot put their own interests ahead of the people they are supposed to serve.
When a trustee does not meet that standard, the consequences can be significant, including the possible loss of commissions. New York courts apply what is known as the “faithless servant” doctrine, which allows recovery of compensation paid during a period of disloyalty. The Chen case confirms that this principle applies in the trust context.
The case also shows that a trustee may have to return commissions even if the trust cannot point to a specific financial loss.
Blood may be thicker than water, but sewage – or at least the family business disposing of it – is thicker than both. The decedent in Matter of Bates owned the family septic tank business. Following her death, her children and grandchildren engaged in a trust contest to sit on the porcelain throne, i.e., control the company.