USA – NEW YORK Law and Practice Contributed by: John M Teitler, Nancy A Murphy, Constance E Shields and Von Sanborn, Teitler & Teitler LLP
6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries Corporate fiduciaries are often used. There is no high - er standard of conduct, as all trustees are held to a fiduciary duty. Fees can be high but are subject to negotiation. 6.2 Fiduciary Liabilities A fiduciary owes a duty of care and prudence and may be personally liable for a breach of fiduciary duty. A fiduciary cannot be exculpated from acting in bad faith, but provisions can be included in the operative instrument to limit exposure to the fiduciary, such as an express provision that a fiduciary will not incur lia - bility in the absence of bad faith and indemnification In the United States, particularly in New York, fiduci - aries are required to use prudent judgment to invest trust assets. Typically, trustees contract with third- party advisors to make investment decisions. 6.4 Fiduciary Investment It is common for the trust or similar legal document to grant a fiduciary broad authority over the invest - ment of trust assets, while also explicitly excluding any requirement to diversify those investments. Addi - tionally, a trust may hold ownership of a closely held business, as specified by the terms outlined in the trust instrument. 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship A person can have only one domicile at a given time, and it is generally considered to be the place with which a person has a sufficient degree of permanent contacts and to which a person intends to return and/ or has a permanent home. Indicia of domicile can include a driver’s license, voter’s registration, and vehicle registration, as well as club memberships and affiliations with religious houses of worship, among other things. of the trustee by the trust. 6.3 Fiduciary Regulation
Residence is a place of abode, and an individual can have multiple residences. An individual is considered a New York resident for tax purposes if New York is the individual’s domicile or the individual’s perma - nent place of abode is in New York and the individual spends 184 days or more there. Even if an individual is considered a non-resident, the individual may remain subject to income tax on New York-sourced income. 7.2 Expeditious Citizenship There are no expeditious means for an individual to obtain citizenship in the United States. 8. Planning for Minors, Adults with Disabilities and Elders 8.1 Special Planning Mechanisms For minors or adults with special needs, a common planning mechanism is a special needs or supple - mental needs trust. The intent of the special needs or supplemental needs trust is to supplement and not In the event of a party’s incapacity, the court would have to be petitioned to appoint a guardian for the person and/or property. Various planning mechanisms can be put in place to minimise the need or scope of a guardianship proceeding, such as: • a revocable trust; • a durable power of attorney; • a health care proxy; and • a living will. diminish federal or state benefits. 8.2 Appointment of a Guardian • If it is desired to have a non-US resident or citizen appointed as a guardian, specialised planning may be required. 8.3 Elder Law There is no applicable information in this jurisdiction.
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