Matter of Turner
Annotate this CaseDecided on March 22, 2005
Surrogate's Court, Nassau County
In the Matter of Ernest Turner, Deceased,
234348
John B. Riordan, J.
A petition has been filed by Fiduciary Trust Company International to resign as co-trustee and for the appointment of AG Edwards Trust Company as successor trustee.
The decedent died a resident of Nassau County on November 14, 1984 leaving a Last Will and Testament dated November 8, 1978. Pursuant to Article III of the Will, the decedent exercised a limited power of appointment granted to him under the Last Will and Testament of his mother, Ernestine Tappey Sumner, who died on November 21, 1963, by appointing the entire principal from that trust in three equal shares: one for his wife, Mary G. Turner, who survived the decedent but died on January 23, 2003, and one share each for his two children, James M. Turner and Mary T. Tackett. The decedent appointed his son, James M. Turner, and the petitioner, Fiduciary Trust Company International, as co-executors and co-trustees. Letters of trusteeship were issued to petitioner and to James M. Turner.
Petitioner seeks to resign as a trustee of the trust created under decedent's Will for the benefit of Mary T. Tackett citing "philosophical differences" with the income beneficiary concerning the trust administration as reason for its resignation. Initially, petitioner requested that Mary T. Tackett be appointed as the successor co-trustee. In the court's prior decision (Dec. No. 553), the court denied petitioner's application with leave to "renew the application should another corporate fiduciary with comparable facilities to those of the petitioner be ready to serve and to perform the same services as does the corporate trustee ...."
Accordingly, petitioner now seeks the appointment of AG Edwards Trust Company to act in its place and stead should its resignation be accepted. All of the interested parties are adults and have consented to the relief requested.
AG Edwards Trust Company FSB is a federally chartered bank and trust company whose principal place of business is in St. Louis, Missouri. Banking Law §200 sets forth the necessary requirements a foreign banking corporation must meet in order to transact business in this state. However, a bank chartered under the laws of the United States is exempt from those requirements. Accordingly, the proposed trustee, although a foreign banking corporation, correctly asserts that it need not comply with the requirements of Banking Law §200. [*2]
National banks, however, can exercise only the authority that has been expressly or impliedly granted to them by Congress (Investment Co. Institute v Camp, 401 US 617 [1971]). A national bank is authorized to act as a fiduciary only "when not in contravention of state or local law" (12 U.S.C. §92a[a] and [b]). The purpose of 12 U.S.C. §92a(a) and (b) was to place national banks on an equal competitive basis with state banks and trust companies in the state where the national bank is situated (Blaney v Florida Nat. Bank, 357 F2d 27 [1966]). Thus, a national bank having its principal place of business in Missouri and a Missouri state bank may not be treated differently under any state law.
Pursuant to Banking Law §131, in order for a foreign banking corporation or trust company to act as a trustee in New York, a New York domestic corporation similarly must be permitted to act as a trustee in the state where the foreign banking corporation or trust company has its principal place of business (Matter of Westpfal, 140 Misc 2d 487 [1988]; Matter of Edwards, 56 Misc 2d 902 [1968]; Matter of Walbridge, 178 Misc 32 [1942]). Essentially, AG Edwards Trust Company may qualify as a successor co-trustee in the instant case only if New York banks and trust companies are afforded reciprocity under Missouri law.
Pursuant to Section 362.600 of the Missouri Business and Financial Institutions Law, a New York corporation may act as a trustee in Missouri provided that a Missouri corporation has the authority to act as a trustee in New York. Thus, both New York and Missouri require reciprocity. Accordingly, AG Edwards Trust Company may qualify as a trustee in New York.
The grant of a fiduciary's application to resign rests within the court's sound discretion (SCPA 715; Matter of Busto, 173 Misc 25 [1939], aff'd 258 App Div 980 [1940]). Here, the decedent made provision for the administration of the trust by a corporate trustee along with an individual trustee. The appointment of AG Edwards Trust Company as a successor co-trustee is consistent with the testamentary scheme of the decedent. Under such circumstances, Fiduciary Trust Company International is permitted to resign as trustee (SCPA 715). The appointment of AG Edwards Trust Company will not contravene the express terms of the Will (SCPA 1502). Accordingly, letters of trusteeship issued to Fiduciary Trust Company International and James M. Turner are revoked and successor letters of trusteeship shall issue to AG Edwards Trust Company and James M. Turner upon AG Edwards Trust Company duly qualifying under the law. Pursuant to Banking Law §131(3), in order to qualify, a foreign banking corporation or trust company must file a copy of its charter certified by its secretary under its corporate seal, together with the post office address of its principal office. Banking Law §100-a(5), which provides that no bond or other security shall be required from any trust company, applies only to banking institutions which are qualified and licensed under the laws of the state (Matter of Weber, 22 Misc 2d 290 [1959]). Consequently, a foreign trust company must file a bond unless the court, in its discretion, permits it to act without doing so. All of the interested parties have consented to the successor co-trustee acting without bond. The Will provides that no bond or other security shall be required of "any Executor or Trustee under this Will." Accordingly, the court dispenses with the filing of a bond. The resigning trustee shall account.
The court notes that the decedent's Will set forth the compensation to which Fiduciary Trust Company would be entitled for acting as a trustee. The petitioner has not indicated whether the fee structure set forth in the Will shall apply to AG Edwards Trust Company. Nonetheless, the interested parties, who are all adults, have consented to the appointment, and presumably to [*3]the fee structure of AG Edwards Trust Company.
A proposed order has been submitted to the court and will be signed if in proper form.
Dated: March 22, 2005
JOHN B. RIORDAN
Judge of the
Surrogate's Court
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