Article Archives >> Lead Stories >> October 1-15, 2009
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Trustee Not Liable
For Losses on CRUT Investments
Choosing 90% equities in trust
expected to last 50 years was reasonable
The trustee of a charitable remainder unitrust that lost more than 60% of its value during the stock market decline of 2000 to 2002 is not liable for breach of fiduciary duty for investing almost entirely in equities, a Chancery Court in Delaware has held. (Merrill Lynch Trust Company v. Campbell, Ct. of Chancery, DE, No. 1803, 9/2/09.)
The CRUT required a 10% payout to the settlor and lifetime income to her three children before the remainder went to five charities, which was expected to be nearly half a century later. The only investment strategy that could reasonably be expected to prevent the complete depletion of the remainder, the Court said, required substantial equity investments and choosing a mix of 90% or more was within the reasonable discretion provided to the trustee under the instrument.
Article Archives >> Lead Stories >> October 1-15, 2009
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