Dealing with Toxic Succession Issues
Those serving as trustees for estates that include contaminated real property have good reason to ensure that the potential passing of environmental cleanup liabilities at death (toxic succession) is addressed up front as part of the succession planning and trust administration process. Independent trustees – those with no personal financial interest in the distributed assets – are typically protected by law from government-mandated environmental cleanup liabilities. However, the trust’s assets do not receive these protections. This means that trust assets are often the target of government and third party environmental cleanup litigation, and toxic tort lawsuits, as well as environmental cleanup litigation between and among the heirs and beneficiaries of the estate.
Trustees serve as a crucial line of defense for clients with potential toxic succession concerns. However, when toxic succession issues are ignored, trustees may find themselves facing otherwise unnecessary disputes that drain trust resources, and may find themselves facing personal accusations of mismanagement regarding the trust assets and the contaminated property.
Trustees can easily incorporate toxic succession issues into their oversight activities through a) proactive toxic succession planning, and b) a periodic review of client assets. Trustees may also want to explore specialized insurance protections, including enhanced errors and omissions coverage and pollution legal liability (PLL) insurance, where available. With a little additional planning and some strategic advice from toxic succession professionals, trustees can help clients avoid major environmental cleanup consequences, and can mimimize the finger-pointing and litigation often associated with toxic succession.
•Campaign 5000: Toxic Succession Whitepaper
•Planned Giving Today article by Kevin Daehnke
•Contaminated Property: Proactive Planning Strategies to Maximize Estate Value and Avoid Draconian Results
•Environmental Cleanup Costs: Professional Negligence for Failure to Warn Successors and Beneficiaries