Malpractice Suit Against Trustees Who Failed to Inform Beneficiaries of Potential Policy Lapse
This case highlights some advantages of a professional corporate trustee – who is likely to have an organized process and organized infrastructure for payment of life insurance premiums and warning procedures in the case of impending policy lapses over other types of trustees.
This case also provides an important lesson about malpractice coverage – emphasizing both the importance of having it and the importance of honestly and fully answering the questions in the application and completing any policy requirements in a timely manner.
The best practice is for every estate and business planning professional to have adequate malpractice coverage and to understand its limitations and exclusions, including any exclusion for acting as a fiduciary.