Trustees Everywhere- Be Afraid

A New York judge’s recent decision in Estate of Dumont’ should give trustees reason to pause and re-evaluate the investment policies and procedures of any trust for which they act, that is governed by or may come to be governed by New York law The judge held a trustee liable-to the tune of $21 million-for failing to diversify Eastman Kodak stock when its share prices fell in the 1970s, even though the trust’s settlor specifically instructed that the Kodak stock not be sold solely for diversification reasons.