Want of Understanding

Want of Understanding

When by reason of dishonesty, drunkenness, improvidence or "want of understanding" a fiduciary is unfit for the execution of her office, she can have her letters suspended, modified or revoked.  SCPA 711(2).  A lifetime trustee can also be removed for the same reasons.  SCPA 719(10); SCPA 711(2).  Drunkenness and dishonesty are readily apparent and definable terms.  Improvidence is derived from the old Surrogate Court Act which defined the term as "incompetent by reason of improvidence."  Emerson v. Bowers, 14 N.Y. 449 (1856) [enhanced version available to lexis.com subscribers].  A gambler was prima facie incompetent to be a fiduciary.  McMahon v. Harrison, 6 N.Y. 443 (1852) [enhanced version].

Want of understanding remains an amphorous concept.  It has been held to be nothing less than a mental or physical disability rendering the fiduciary incapable of performing her duties.  Matter of Jung, 205 A.D. 37, 199 N.Y.S. 122 (1st Dep't 1923) [enhanced version].  Total loss of mental capacity or Alzheimer's disease have recently been determined to constitute the lack of understanding under SCPA 707(1)(e), which makes a person ineligible for letters as a fiduciary (Matter of Witkin, N.Y.L.J., January 31, 2008, at 36, col. 6, 2008 N.Y. Misc. LEXIS 839 [enhanced version], 2008 N.Y. Misc. LEXIS 856 [enhanced version] (Sur. Ct. New York County); Matter of Faust, N.Y.L.J., March 5, 2007, at 31, col. 6, 2007 N.Y. Misc. LEXIS 1526 (Sur. Ct. New York County)) [enhanced version].

In Matter of Britton and Blank, N.Y.L.J. June 18, 1997 at 33, col. 5 (Sur. Ct. Westchester County) [enhanced version], the Court held that an attorney suspended from the practice of law for commingling assets and commencing a groundless lawsuit lacked understanding of what it means to be a fiduciary and was thus disqualified to receive letters.  This case seems to be more a case of "dishonesty" rather than "want of understanding."  On the other hand, the feeble health and want of business ability of a widow were not grounds for revocation of her letters of administration.  Matter of Ireland, 47 Misc. 545, 95 N.Y.S. 1079 (Sur. Ct. Saratoga County 1906) [enhanced version].

In a recent case exploring something on the continuum between total loss of mental capacity and lack of business experience, Surrogate Czygier found an apparent "want of understanding" concerning trust assets and management threatened the proper administration of the trust.  (Matter of Mack, N.Y.L.J., September 8, 2010, at 29, col. 1 (Sur. Ct. Suffolk County)).  After hearing the testimony of the decedent's son, who became the successor trustee of his father's revocable trust, the Surrogate found that the trustee could not describe how the trust assets passed, could not describe how he managed other trust assets, failed to follow up on the sale of property in France, and failed to appreciate or understand another asset which may be partially owned by the trust.  The Court found the trustee's testimony vague and contradictory and was especially troubled "by his inability to articulate in a coherent fashion how and why trust monies were being expended," including payments to himself and his own personal expenses.  The Court suspended the trustee pending qualification of an agreed upon successor.  The Mack case gives some guidance as to what 'want of understanding" means beyond total mental disability and under what circumstances lack of business ability can morph into an actual threat to the proper administration of the estate or trust.

. . . .

Explore the LEXIS.com Estates, Gifts & Trusts and Elder Law resources

Discover the features and benefits of LexisNexis® Tax Center