trustee-succession-memo.docx

1026-00005 · Briarwood Family Office LLC · Analyses

trustee-succession-memo.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law One Liberty Plaza, 44th Floor New York, New York 10006

MEMORANDUM

TO: Patricia Dunmore, Partner, Calderwood & Harkness LLP

FROM: Grace Nakamura, Lead Associate, Real Estate Practice Group Rafael Dominguez, Working Associate, Real Estate Practice Group

DATE: January 18, 2024

RE: Trustee Succession Under Article VII of the Eldon M. Briarwood Irrevocable Family Trust Agreement dated June 12, 1998 (as amended by First Amendment dated March 3, 2008, and Second Amendment dated December 31, 2015)

MATTER NO.: 1026-00005

CLIENT: Briarwood Family Office LLC

I. EXECUTIVE SUMMARY

The purpose of this memorandum is to analyze the trustee succession provisions triggered by the incapacity of Eldon M. Briarwood ("Eldon" or the "Grantor"), the original individual trustee of the Eldon M. Briarwood Irrevocable Family Trust (the "Trust"), and to confirm that the appointment of Margot S. Briarwood ("Margot") as successor individual trustee satisfies all requirements of the Trust instrument (the "Trust Agreement") and applicable New York law, including the New York Estates, Powers and Trusts Law ("EPTL") and the Surrogate's Court Procedure Act ("SCPA").

Based upon our review of the Trust Agreement (as amended), the physician's certification of incapacity issued by Dr. Annette Volkov on December 3, 2023, and Margot's written acceptance of her appointment as successor individual trustee dated January 22, 2024, we conclude the following:

1. Margot S. Briarwood's acceptance of appointment as successor individual trustee, effective January 22, 2024, properly satisfies all conditions under Article VII of the Trust Agreement and the EPTL. The incapacity certification provided by Dr. Volkov meets the requirements of Section 7.2 of the Trust Agreement, and Margot's written acceptance, delivered to and acknowledged by the institutional co-trustee, completes the self-executing succession mechanism prescribed by Section 7.3.

2. Caldwell Fiduciary Services Inc. ("Caldwell") continues in its role as institutional co-trustee without interruption. The trustee succession occasioned by Eldon's incapacity pertains solely to the individual trustee position. Caldwell's ongoing service as institutional co-trustee is unaffected by this transition.

3. No court proceeding is required to effectuate the succession. The Trust instrument provides a self-executing mechanism for the appointment of a successor individual trustee, subject to the conditions analyzed at length below. Neither the EPTL nor the SCPA requires judicial approval or confirmation of the succession where the trust instrument itself provides an adequate succession mechanism and the successor trustee accepts in accordance with the instrument's terms.

4. Margot's dual status as successor trustee and beneficiary is permissible under both the Trust Agreement and New York statutory law, given that she does not serve as sole trustee of the Trust and that Caldwell provides continuing institutional oversight.

This memorandum sets forth the detailed factual background, the legal analysis supporting these conclusions, and the procedural steps necessary to complete the succession and the associated administrative transition.

II. BACKGROUND

A. The Trust Instrument

The Trust at issue is the Eldon M. Briarwood Irrevocable Family Trust, an irrevocable inter vivos trust created pursuant to a Trust Agreement dated June 12, 1998. Eldon M. Briarwood executed the Trust Agreement in his capacity as both Grantor and original individual trustee. Caldwell Fiduciary Services Inc. was appointed as institutional co-trustee at the Trust's inception and has served continuously in that role since June 12, 1998.

The Trust Agreement is governed by the laws of the State of New York, including the EPTL and applicable common law. The situs of the Trust is New York County, New York. The Trust's federal employer identification number is 13-7284915.

Since its creation, the Trust Agreement has been amended on two occasions:

(1) First Amendment, dated March 3, 2008. The First Amendment modified certain investment-related provisions and updated the schedule of permissible investments to include interests in private investment funds and alternative-asset vehicles. It also adjusted the allocation of fiduciary responsibilities between the individual trustee and the institutional co-trustee to give the individual trustee broader discretion over investment direction, consistent with the co-trusteeship structure established in Article V.

(2) Second Amendment, dated December 31, 2015. The Second Amendment relates principally to the relinquishment by Eldon of his power to substitute trust assets of equivalent value, as reserved under Section 4.7 of the original Trust Agreement. This swap power, which had caused the Trust to be classified as a "grantor trust" for federal income-tax purposes under Internal Revenue Code ("IRC") § 675(4), was released in its entirety. As a result, the Trust's grantor-trust status terminated effective December 31, 2015, and the Trust thereafter became a separate taxable entity filing its own federal and state fiduciary income-tax returns (Form 1041).

Neither the First Amendment nor the Second Amendment modified the trustee succession provisions set forth in Article VII of the Trust Agreement, which remain as originally drafted and executed on June 12, 1998. The trustee succession provisions are therefore analyzed herein with reference to the original Trust Agreement.

As of December 31, 2023, the Trust holds a total corpus of approximately $41,500,000, comprising the following asset categories:

The real-estate holdings are of particular significance to this engagement because the client has indicated that the successor trustee, once properly appointed, will consider in-kind distributions of one or more of these parcels to the beneficiaries in satisfaction of their respective beneficial interests. The legal and tax analysis relating to those anticipated in-kind distributions will be addressed in a separate memorandum; however, the proper succession of the individual trustee is a necessary precondition to the exercise of the distribution authority conferred by the Trust Agreement.

B. The Parties

The following individuals and entities are relevant to this analysis:

Eldon M. Briarwood — Grantor and original individual trustee of the Trust. Eldon is 87 years of age and resides at 27 Fenimore Road, Larchmont, New York 10538. As discussed in Section II.C below, Dr. Annette Volkov, Eldon's attending physician, certified on December 3, 2023 that Eldon is permanently incapacitated and unable to manage his personal and financial affairs. Eldon's incapacity triggered the trustee succession mechanism set forth in Article VII of the Trust Agreement.

Caldwell Fiduciary Services Inc. — Caldwell is a New York–chartered trust company that has served as institutional co-trustee of the Trust since the Trust's inception on June 12, 1998. Caldwell is located at 401 Lexington Avenue, 14th Floor, New York, New York 10174. The trust officer assigned to this Trust is Howard R. Phelan, Senior Vice President. The Caldwell trust account number assigned to the Trust is CFT-00298174. As institutional co-trustee, Caldwell is responsible for the custody of the Trust's marketable securities and cash assets, the maintenance of Trust records, and the preparation and filing of the Trust's fiduciary income-tax returns in coordination with the Trust's outside accounting firm, Halford & Kline CPAs. Caldwell does not hold custody of or exercise management authority over the Trust's real-estate parcels, which are administered directly by the individual trustee.

Margot S. Briarwood — Margot is Eldon's daughter, age 56, and a resident of 14 Waverly Place, Unit 4W, New York, New York 10003. She serves as Managing Director of Briarwood Family Office LLC, the client entity in this engagement, which is located at 780 Park Avenue, Suite 22A, New York, New York 10021. Margot is designated as the first successor individual trustee under Article VII, Section 7.3 of the Trust Agreement. In addition to her role as successor trustee, Margot is a primary beneficiary of the Trust, holding a 45% beneficial interest in the Trust corpus (approximately $18,675,000 based on the December 31, 2023 valuation). Margot's dual status as both successor trustee and beneficiary is discussed in detail in Section III.C below.

Tobias E. Briarwood — Tobias is Eldon's son, age 52, and a resident of 88 Round Hill Road, Greenwich, Connecticut 06831. Tobias serves as an advisory board member of Briarwood Family Office LLC. He is a primary beneficiary of the Trust, holding a 35% beneficial interest in the Trust corpus (approximately $14,525,000 based on the December 31, 2023 valuation). We note that Tobias has separately retained Reedlaw & Stein LLP (Janet C. Okonkwo, Partner, 55 East 59th Street, Suite 1800, New York, New York 10022), as of February 5, 2024, to evaluate the Trust administration and the anticipated in-kind distributions. Calderwood & Harkness represents Briarwood Family Office LLC in this matter and does not represent Tobias individually.

Nadia Briarwood-Chen — Nadia is Eldon's younger daughter, age 48, and a resident of 341 Sterling Place, Apt. 3, Brooklyn, New York 11238. Nadia is a primary beneficiary of the Trust, holding a 20% beneficial interest in the Trust corpus (approximately $8,300,000 based on the December 31, 2023 valuation). Nadia has not retained separate counsel in connection with the trustee succession or the anticipated distributions.

C. The Incapacity Event

On December 3, 2023, Dr. Annette Volkov, Eldon's attending physician (private practice, Larchmont, New York), issued a written certification (the "Incapacity Certification") stating that Eldon M. Briarwood is permanently incapacitated and unable to manage his personal and financial affairs. Dr. Volkov's certification is based upon her ongoing medical treatment and evaluation of Eldon and reflects her professional medical judgment that his condition is permanent in nature. A copy of the Incapacity Certification is attached hereto as Appendix B.

The Incapacity Certification was delivered to Caldwell Fiduciary Services Inc. on or about December 5, 2023. Howard R. Phelan, Senior Vice President at Caldwell, has confirmed receipt of the certification on that date. The delivery of the Incapacity Certification to the institutional co-trustee constitutes the triggering event under Article VII, Section 7.2 of the Trust Agreement, which sets in motion the trustee succession mechanism analyzed in Section III below.

It bears emphasis that the Trust Agreement does not require a judicial determination of incapacity, a separate court proceeding, or a second physician's opinion. The Incapacity Certification issued by Eldon's attending physician is the sole trigger required under Section 7.2. This approach is consistent with the modern trend in trust drafting, which favors private, non-judicial mechanisms for addressing trustee incapacity in order to avoid the expense, delay, and public nature of court proceedings.

D. Engagement Context

Calderwood & Harkness LLP was engaged by Briarwood Family Office LLC on January 15, 2024 to advise on the trustee succession and the subsequent in-kind distribution of Trust real-estate holdings to the beneficiaries. The matter was opened under Matter Number 1026-00005. The responsible partner is Patricia Dunmore; the billing partner is George Trujillo; and the tax specialist assigned to the matter is Sylvia Hartwell, who will provide separate analysis regarding the tax consequences of the anticipated in-kind distributions and any related valuation considerations.

The scope of this memorandum is limited to the trustee succession analysis. The tax and distribution analysis will be addressed in a forthcoming companion memorandum.

III. ANALYSIS OF TRUSTEE SUCCESSION PROVISIONS

A. Article VII, Section 7.2 — Incapacity Standard and Certification

Section 7.2 of the Trust Agreement establishes the standard for determining the incapacity of an individual trustee and the mechanism by which such a determination is made. This provision is the threshold requirement for triggering the trustee succession process: unless the incapacity standard of Section 7.2 is satisfied, the succession mechanism of Section 7.3 is not activated.

Section 7.2 defines "incapacity" for purposes of the Trust Agreement as a determination by the individual trustee's attending physician that the trustee is unable, by reason of physical or mental impairment, to manage the trustee's personal and financial affairs, and that such condition is expected to be permanent. The definition is deliberately self-contained and does not incorporate or cross-reference any statutory definition of incapacity under the EPTL, the SCPA, or New York Mental Hygiene Law. This is significant because it means that the standard for triggering the succession is set exclusively by the Trust instrument itself, rather than by operation of law.

The Trust Agreement imposes three formal requirements for a valid incapacity certification under Section 7.2:

(i) The certification must be in writing;

(ii) The certification must be signed by the attending physician of the individual trustee; and

(iii) The certification must be delivered to the institutional co-trustee (i.e., Caldwell Fiduciary Services Inc.).

We have reviewed the Incapacity Certification issued by Dr. Annette Volkov on December 3, 2023 (attached hereto as Appendix B) and conclude that it satisfies each of these formal requirements:

First, the Incapacity Certification is a written instrument. It is prepared on Dr. Volkov's professional letterhead and sets forth, in clear and unambiguous terms, her medical determination regarding Eldon's condition.

Second, the Incapacity Certification bears the original signature of Dr. Annette Volkov, M.D. Dr. Volkov is identified in the certification as Eldon's attending physician and has treated Eldon in that capacity for a period in excess of fifteen years. The Trust Agreement does not require a particular medical specialty or board certification; it requires only that the certifying physician be the trustee's "attending physician." Dr. Volkov satisfies this requirement.

Third, the Incapacity Certification was delivered to Caldwell Fiduciary Services Inc. on or about December 5, 2023. Howard R. Phelan, Senior Vice President at Caldwell, has confirmed receipt of the certification on that date and has documented the receipt in the Trust's records maintained by Caldwell.

In addition, the Incapacity Certification expressly states that Eldon's incapacity is permanent — that is, Dr. Volkov has determined that his physical or mental impairment is of a nature that precludes recovery to a state in which he would be capable of managing his personal and financial affairs. This permanency determination is required by the Trust Agreement's definition of incapacity, and Dr. Volkov's certification addresses it directly and without qualification.

We note several things the Trust Agreement does not require, each of which is relevant to the sufficiency of the Incapacity Certification:

• The Trust does not require a judicial determination of incapacity. There is no requirement that a court of competent jurisdiction adjudicate Eldon's capacity or enter an order of incapacity under Article 81 of the New York Mental Hygiene Law or any other statute.

• The Trust does not require a second physician's opinion. Some trust instruments require confirmatory opinions from two independent physicians; this Trust requires only the certification of the attending physician.

• The Trust does not require any court proceeding or judicial confirmation of the certification. The certification mechanism is entirely private and non-judicial.

The absence of these additional requirements reflects the Grantor's intent, expressed in the Trust Agreement, to provide a streamlined and efficient mechanism for addressing trustee incapacity without the delay, expense, and public scrutiny associated with court proceedings.

Conclusion as to Section 7.2: Dr. Volkov's Incapacity Certification dated December 3, 2023 is sufficient under Article VII, Section 7.2 of the Trust Agreement to trigger the trustee succession mechanism. All three formal requirements — written certification, signature by the attending physician, and delivery to the institutional co-trustee — have been satisfied. The Trust's incapacity standard has been met, and the succession mechanism of Section 7.3 is properly activated.

B. Article VII, Section 7.3 — Successor Trustee Designation

Having established that the incapacity standard of Section 7.2 has been satisfied, we turn to the succession mechanism itself, which is set forth in Article VII, Section 7.3 of the Trust Agreement.

Section 7.3 provides a hierarchy of named successor individual trustees who are designated to serve in the event that the individual trustee is removed, resigns, dies, or is determined to be incapacitated under Section 7.2. The provision is structured as a sequential list of named individuals, each of whom is entitled to serve as successor individual trustee in order of priority. If the first-named successor is unable or unwilling to serve, the next-named successor in the hierarchy is entitled to accept the appointment, and so on.

The first named successor individual trustee under Section 7.3 is Margot S. Briarwood. Because Margot is willing and able to serve, there is no need to proceed further down the hierarchy of named successors.

Section 7.3 provides, in pertinent part, that the named successor "shall serve as individual trustee upon acceptance of such appointment in writing delivered to the institutional co-trustee." This language establishes two conditions for the succession to become effective:

(i) The named successor must accept the appointment; and

(ii) The acceptance must be in writing and delivered to the institutional co-trustee (Caldwell).

Critically, the Trust Agreement does not condition the effectiveness of the succession on any of the following:

• The approval or consent of any beneficiary of the Trust;

• The approval or consent of the departing (incapacitated) trustee;

• Any court appointment, confirmation, or judicial proceeding; or

• The approval of any third party.

The absence of these additional conditions underscores the self-executing nature of the succession mechanism. Once the triggering event (incapacity certification under Section 7.2) has occurred and the named successor has delivered a written acceptance to the institutional co-trustee, the succession is complete. No further action is required to vest the successor trustee with the powers, duties, and responsibilities of the individual trusteeship.

Section 7.3 further provides that the institutional co-trustee is directed to "acknowledge receipt of such acceptance and record the succession in the Trust records." This acknowledgment and recording function is ministerial in nature; it does not constitute a condition precedent to the effectiveness of the succession but rather serves as an administrative step to document the transition and maintain the integrity of the Trust's records.

As discussed in Section IV.C below, Margot S. Briarwood executed a written instrument accepting her appointment as successor individual trustee on January 22, 2024, and this acceptance was delivered to Howard R. Phelan at Caldwell on the same date. Caldwell acknowledged the succession and recorded it in the Trust's records.

Conclusion as to Section 7.3: The succession mechanism under Article VII, Section 7.3 is self-executing upon (i) the occurrence of the triggering event (the incapacity certification under Section 7.2, which occurred on December 3, 2023), and (ii) the named successor's written acceptance delivered to Caldwell (which occurred on January 22, 2024). Both conditions have been satisfied. Margot S. Briarwood is properly appointed as successor individual trustee of the Trust, effective January 22, 2024.

C. Margot S. Briarwood's Dual Role as Successor Trustee and Beneficiary

An issue that warrants careful analysis is Margot's dual status as both the designated first successor individual trustee and a primary beneficiary of the Trust, holding a 45% beneficial interest in the Trust corpus. The question is whether this dual role creates a conflict of interest or is otherwise impermissible under the Trust Agreement or applicable New York law.

The Trust Agreement. The Trust Agreement itself expressly contemplates Margot's dual role. Section 7.3 designates Margot as the first successor individual trustee, and the Trust Agreement separately identifies her as a primary beneficiary holding a specified percentage interest in the Trust corpus. The Grantor, in drafting the Trust Agreement, was presumably aware that the individual designated as first successor trustee was also a beneficiary, and the Trust Agreement contains no provision that would disqualify a beneficiary from serving as trustee or that would require the successor trustee to disclaim or relinquish a beneficial interest as a condition to serving. To the contrary, the express designation of Margot as both successor trustee and beneficiary reflects the Grantor's intent that she serve in both capacities simultaneously.

New York Law. Under EPTL § 7-2.4, a beneficiary may serve as trustee of a trust, subject to certain limitations designed to prevent a merger of legal and equitable interests. Specifically, the statute provides that a beneficiary who is the sole trustee of a trust in which the beneficiary holds a beneficial interest in income or principal may cause a merger of the legal and equitable estates, thereby terminating the trust — unless the trustee's power over income or principal is limited by an ascertainable standard relating to the beneficiary's health, education, maintenance, or support. The purpose of this rule is to prevent a situation in which a single individual holds both the entire legal interest (as sole trustee) and a beneficial interest (as beneficiary), which could be argued to collapse the trust relationship.

Here, however, Margot is not the sole trustee of the Trust. Caldwell Fiduciary Services Inc. continues to serve as institutional co-trustee, and its appointment is unaffected by the trustee succession. The co-trusteeship structure ensures that the legal interest in the Trust's assets is held jointly by Margot (as individual trustee) and Caldwell (as institutional co-trustee), rather than being vested in Margot alone. Accordingly, no merger of legal and equitable interests arises under EPTL § 7-2.4, and Margot's service as successor individual trustee while simultaneously holding a 45% beneficial interest does not create a disqualifying conflict under New York statutory law.

Moreover, the continuing co-trusteeship with Caldwell provides meaningful fiduciary checks and institutional oversight. As discussed in Section VI below, Caldwell retains responsibility for the custody of the Trust's marketable securities and cash assets, record-keeping, tax reporting, and certain ministerial functions. Caldwell's continuing involvement ensures that the Trust's administration is subject to institutional oversight and accountability, even though the individual trustee (Margot) also holds a substantial beneficial interest.

We further note that New York courts have consistently upheld the validity of trust arrangements in which a beneficiary serves as one of multiple co-trustees, particularly where the trust instrument itself authorizes such service and where adequate fiduciary safeguards are in place. See, e.g., In re Wallens, 9 N.Y.3d 117 (2007) (discussing the permissibility of beneficiary-trustees under New York law); In re Estate of Donner, 82 N.Y.2d 574 (1993) (examining the scope of a co-trustee's fiduciary duties where one co-trustee holds a beneficial interest). While the factual circumstances of the Briarwood Trust are distinguishable in certain respects from the cited authorities, the underlying principles are applicable and support the conclusion that Margot's dual role is permissible.

Conclusion as to Dual Role: Margot S. Briarwood's simultaneous service as successor individual trustee and 45% beneficiary of the Trust is permissible under both the express terms of the Trust Agreement and EPTL § 7-2.4. The continuing co-trusteeship with Caldwell Fiduciary Services Inc. ensures that no merger of interests arises and provides adequate institutional oversight of the Trust's administration.

IV. REQUIREMENTS UNDER NEW YORK LAW (EPTL) FOR ACCEPTANCE OF TRUSTEESHIP

A. Statutory Framework

The acceptance of a trusteeship under New York law is governed by EPTL § 7-2.1 and related provisions. EPTL § 7-2.1 provides that an individual nominated or designated as trustee may accept or decline the position. The statute does not impose a rigid formal requirement for acceptance; rather, acceptance may be either express (by a written instrument or oral declaration) or implied (by conduct consistent with the assumption of trustee duties, such as taking possession of trust assets, exercising trustee powers, or otherwise acting in a manner that manifests an intent to serve).

Notwithstanding the flexibility afforded by the statutory framework, best practice — and, critically, the Trust Agreement itself — calls for express written acceptance of the trusteeship. A written acceptance provides certainty as to the date on which the succession becomes effective, eliminates ambiguity regarding the successor's intent, and creates a documentary record that can be relied upon by third parties such as financial institutions, title companies, counterparties to Trust transactions, and, if necessary, courts.

Under the Surrogate's Court Procedure Act (SCPA) § 1502 and related provisions, no court proceeding is required to effectuate the appointment of a successor trustee where the trust instrument provides a succession mechanism and the successor accepts in accordance with the instrument's terms. SCPA § 1502 provides for the appointment of a successor trustee by the Surrogate's Court in situations where the trust instrument does not designate a successor or where the designated successor is unable or unwilling to serve. Because the Trust Agreement here provides a comprehensive succession mechanism (Article VII, Sections 7.2 and 7.3), and the first-named successor (Margot) has accepted the appointment, the judicial appointment provisions of the SCPA are inapplicable.

In summary, the statutory framework supports the conclusion that the succession can be — and has been — effectuated entirely through the private, non-judicial mechanism provided by the Trust Agreement, without the need for court involvement.

B. Formal Requirements of the Trust Instrument

As set forth above, Article VII, Section 7.3 of the Trust Agreement establishes the following formal requirements for the effective succession of the individual trusteeship:

1. Written acceptance by the successor trustee. The acceptance must be in writing and must express the successor's intent to assume the duties and responsibilities of the individual trusteeship.

2. Delivery of such acceptance to the institutional co-trustee (Caldwell Fiduciary Services Inc.). The delivery of the written acceptance to Caldwell is the act that completes the succession and vests the successor with the authority of the individual trustee.

3. Acknowledgment by Caldwell of the succession. As discussed above, this acknowledgment is ministerial in nature and is not a condition precedent to the effectiveness of the succession. However, it serves to document the transition in the Trust's records and to confirm Caldwell's awareness of the change in individual trusteeship.

In addition to these requirements imposed by the Trust Agreement, we recommend the following additional steps, which, although not strictly required by the Trust instrument, are advisable in light of the Trust's asset composition (in particular, its real-estate holdings) and the anticipated distribution transactions:

• Notarized acceptance instrument. Although the Trust Agreement does not require notarization of the written acceptance, a notarized acceptance is useful for recording with the county clerk's office and for title-insurance purposes related to the Trust's real-estate holdings. Title companies and recording offices routinely require notarized documentation to verify the authority of individuals acting in a fiduciary capacity with respect to real property.

• Certificate of Successor Trustee Appointment. We recommend the preparation and execution of a formal Certificate of Successor Trustee Appointment, which can be presented to third parties, financial institutions, title companies, and counterparties as evidence of Margot's authority to act on behalf of the Trust. The certificate will reference the Trust Agreement, the Incapacity Certification, and the written acceptance, and will be executed by Margot and acknowledged by Caldwell.

• Notice to all beneficiaries. As discussed in Section V below, the Trust Agreement requires written notice of the succession to all current beneficiaries, and such notice is also advisable under applicable provisions of the EPTL.

C. Margot's Acceptance — January 22, 2024

On January 22, 2024, Margot S. Briarwood executed a written instrument (the "Acceptance") accepting her appointment as successor individual trustee of the Eldon M. Briarwood Irrevocable Family Trust, effective immediately upon execution and delivery. A copy of the Acceptance is attached hereto as Appendix C.

The Acceptance was delivered to Howard R. Phelan, Senior Vice President at Caldwell Fiduciary Services Inc., on the same date, January 22, 2024. Mr. Phelan, acting on behalf of Caldwell in its capacity as institutional co-trustee, acknowledged receipt of the Acceptance and recorded the trustee succession in the Trust's records maintained by Caldwell. A copy of Caldwell's acknowledgment letter is attached hereto as Appendix D.

Calderwood & Harkness is currently preparing a formal Certificate of Successor Trustee Appointment for Margot's execution. The certificate will be notarized and will be circulated to all relevant parties, including Caldwell, the Trust's financial institutions, the Trust's title company, and any counterparties to Trust transactions. The certificate will reference the following documents:

(i) The Trust Agreement (as amended);

(ii) The Incapacity Certification issued by Dr. Annette Volkov, dated December 3, 2023; and

(iii) The written Acceptance executed by Margot S. Briarwood, dated January 22, 2024.

Conclusion as to Acceptance: Margot's written Acceptance, delivered to and acknowledged by Caldwell on January 22, 2024, satisfies all requirements of Article VII, Section 7.3 of the Trust Agreement and the applicable provisions of the EPTL. The succession of the individual trusteeship from Eldon M. Briarwood to Margot S. Briarwood is effective as of January 22, 2024.

V. NOTICE REQUIREMENTS TO BENEFICIARIES

A. Trust Instrument Requirements

Article VII, Section 7.4 of the Trust Agreement imposes a notice requirement in connection with any trustee succession. Specifically, Section 7.4 provides that the successor trustee must deliver written notice of the trustee succession to all current beneficiaries of the Trust within thirty (30) days of the effective date of the succession. The required notice must identify the following:

(i) The departing trustee and the reason for the vacancy (in this case, Eldon M. Briarwood and his incapacity as certified by Dr. Volkov);

(ii) The identity of the successor trustee (Margot S. Briarwood); and

(iii) The effective date of the succession (January 22, 2024).

Importantly, the notice required by Section 7.4 is informational only. Beneficiary consent or approval is not a condition to the effectiveness of the trustee succession. The succession took effect upon Margot's written acceptance and its delivery to Caldwell, as analyzed above, and the notice obligation is a post-succession administrative requirement that does not affect the validity of the succession itself.

The purpose of the notice requirement is to ensure that the Trust's beneficiaries are informed of the change in fiduciary leadership and have an opportunity to raise any concerns or objections through appropriate channels. While the notice does not confer a veto power or approval right on the beneficiaries, it serves the important function of transparency and is consistent with the general fiduciary duty of a trustee to keep beneficiaries reasonably informed of the administration of the trust.

B. Statutory Notice Under EPTL

In addition to the contractual notice requirement imposed by the Trust Agreement, we have considered whether any statutory notice obligation applies. EPTL § 7-A-7, which applies to lifetime trusts with a New York situs to the extent the Trust constitutes an "express trust" under the statute, may require notification to "qualified beneficiaries" of a change in trusteeship. The statute defines "qualified beneficiaries" to include current beneficiaries and first-line remainder beneficiaries who would be entitled to distributions of income or principal if the trust were terminated on the date in question.

The three beneficiaries of the Trust — Margot S. Briarwood, Tobias E. Briarwood, and Nadia Briarwood-Chen — are all "qualified beneficiaries" within the meaning of the statute and are entitled to notice of the trustee succession. The form and content of the statutory notice substantially overlap with the notice required by Section 7.4 of the Trust Agreement, and a single notice instrument can be designed to satisfy both the contractual and statutory requirements.

Best practice is to provide written notice by certified mail, return receipt requested, or by hand-delivery with written acknowledgment of receipt. These methods of delivery create a documentary record of the notice and its receipt, which may be important if any beneficiary later contends that adequate notice was not provided.

C. Recommended Steps

Based on the foregoing analysis, we recommend the following steps to satisfy the notice requirements:

1. Notice to Tobias E. Briarwood. Calderwood & Harkness will draft a formal notice letter for Margot, in her capacity as successor trustee, to deliver to Tobias at his residence at 88 Round Hill Road, Greenwich, Connecticut 06831. Given that Tobias has separately retained Reedlaw & Stein LLP (Janet C. Okonkwo, Partner, 55 East 59th Street, Suite 1800, New York, New York 10022) as of February 5, 2024 to evaluate the Trust administration, notice should also be delivered to Reedlaw & Stein as counsel of record for Tobias. The notice to Tobias and his counsel should be sent by certified mail, return receipt requested, and, if practicable, by email with a request for written confirmation of receipt.

2. Notice to Nadia Briarwood-Chen. Calderwood & Harkness will draft a corresponding notice letter for delivery to Nadia at her residence at 341 Sterling Place, Apt. 3, Brooklyn, New York 11238. The notice should be sent by certified mail, return receipt requested. To date, Nadia has not retained separate counsel in connection with the trustee succession or the anticipated distributions, and no notice to counsel is required.

3. Documentation of Margot's awareness. Because Margot is both the successor trustee and a beneficiary of the Trust, she need not formally give notice to herself. However, a record of her awareness of the succession — which is self-evident from her execution of the Acceptance — should be documented in the Trust's records for completeness.

The notice letters should be sent within 30 days of January 22, 2024, the effective date of the succession — that is, by no later than February 21, 2024. Calderwood & Harkness will prepare the draft notice letters for Margot's review and execution and will coordinate the delivery of the notices within this timeframe.

VI. CALDWELL FIDUCIARY SERVICES INC. — CONTINUING ROLE AS INSTITUTIONAL CO-TRUSTEE

A. Continuity of Appointment

Caldwell Fiduciary Services Inc. was appointed as institutional co-trustee of the Trust upon its creation on June 12, 1998, and has served continuously in that capacity for over twenty-five years. The trustee succession occasioned by Eldon's incapacity affects only the individual trustee position; Caldwell's role as institutional co-trustee is entirely unaffected by the transition, and Caldwell continues to serve in that capacity without interruption.

Article V, Section 5.1 of the Trust Agreement defines the respective roles and responsibilities of the individual trustee and the institutional co-trustee. The division of responsibilities is as follows:

Individual trustee (now Margot S. Briarwood): The individual trustee is responsible for investment direction, including the selection and monitoring of the Trust's investments; distribution decisions, including the exercise of any discretionary distribution authority conferred by the Trust Agreement; overall administration of the Trust, including the management of the Trust's real-estate holdings; and the exercise of any special powers reserved to the individual trustee under the Trust Agreement.

Institutional co-trustee (Caldwell Fiduciary Services Inc.): The institutional co-trustee is responsible for the custody of the Trust's marketable securities and cash assets held in the Caldwell trust account (Account No. CFT-00298174); the maintenance of the Trust's official records, including records of all transactions, distributions, and receipts; the preparation and filing of the Trust's federal and state fiduciary income-tax returns (Form 1041 and New York Form IT-205) in coordination with the Trust's outside accounting firm, Halford & Kline CPAs; and the performance of ministerial functions, including the execution of trades and settlements at the direction of the individual trustee and the issuance of account statements and reports.

Caldwell's annual administrative fee for its services as institutional co-trustee is set at 0.12% of the Trust corpus, as provided in the fee schedule attached to the Trust Agreement and most recently confirmed by Caldwell's engagement letter dated January 2023. Based on the December 31, 2023 corpus valuation of $41,500,000, Caldwell's current annual administrative fee is approximately $49,800 per year. This fee is payable quarterly from Trust assets and is deducted from the Trust's cash and money-market fund balances.

B. Caldwell's Acknowledgment

Howard R. Phelan, Senior Vice President at Caldwell and the trust officer assigned to the Briarwood Trust, has confirmed Caldwell's acknowledgment of the trustee succession and its continued willingness to serve as institutional co-trustee of the Trust. Mr. Phelan's acknowledgment was communicated to Calderwood & Harkness in writing on January 22, 2024 (a copy of which is attached hereto as Appendix D), and Caldwell has updated the Trust's records to reflect Margot S. Briarwood as successor individual trustee effective January 22, 2024.

Caldwell has not raised any concerns or objections regarding the trustee succession or Margot's appointment as successor individual trustee. Caldwell has confirmed that the transition does not affect any existing custody arrangements, investment positions, or pending transactions of the Trust and that it will continue to perform its duties as institutional co-trustee in accordance with the Trust Agreement and its engagement letter.

C. Administrative Coordination

The transition to a new individual trustee requires certain administrative steps to update the Trust's relationships with financial institutions, counterparties, and service providers. Specifically, Margot, as successor individual trustee, will need to:

• Execute updated signatory cards with Caldwell, authorizing Margot to direct investment transactions, approve distributions, and execute other instructions on behalf of the Trust;

• Execute updated custody agreements and authorization forms with Caldwell, reflecting the change in individual trusteeship and confirming the terms of the existing custody arrangement;

• Provide updated trustee certifications to financial institutions holding Trust assets or accounts, including any banks, brokerage firms, or other custodians;

• Provide updated trustee certifications to title companies and recording offices in connection with the Trust's real-estate holdings; and

• Coordinate with Halford & Kline CPAs regarding the Trust's tax-reporting obligations and the filing of the Trust's fiduciary income-tax returns for the taxable year ending December 31, 2023.

Calderwood & Harkness will coordinate with Caldwell on the delivery of updated trustee certifications and will prepare the necessary documentation for Margot's execution.

VII. PROCEDURAL STEPS FOR COMPLETING THE SUCCESSION

A. Completed Steps

The following steps in the trustee succession process have been completed as of the date of this memorandum:

With the completion of these steps, the succession of the individual trusteeship from Eldon M. Briarwood to Margot S. Briarwood has been legally effectuated. The remaining steps identified in Section VII.B below are administrative in nature and do not affect the validity or effectiveness of the succession.

B. Pending Steps

The following administrative steps remain pending and should be completed within the target dates indicated:

Calderwood & Harkness will monitor the completion of each pending step and will coordinate with Margot and Caldwell to ensure timely execution. We will report to Patricia Dunmore upon the completion of each material milestone.

VIII. CONCLUSION

Based upon our analysis of the Trust Agreement, the Incapacity Certification, Margot's written Acceptance, and applicable provisions of New York law, we reach the following conclusions:

1. The trustee succession has been properly effectuated. The physician's certification of Eldon M. Briarwood's permanent incapacity, issued by Dr. Annette Volkov on December 3, 2023, satisfies the incapacity standard and certification requirements of Article VII, Section 7.2 of the Trust Agreement. This certification triggered the self-executing succession mechanism of Section 7.3.

2. Margot S. Briarwood is properly appointed as successor individual trustee. Margot's written acceptance of her appointment, delivered to and acknowledged by Caldwell Fiduciary Services Inc. on January 22, 2024, satisfies all conditions under Article VII, Sections 7.2 and 7.3 of the Trust Agreement and the requirements of the New York Estates, Powers and Trusts Law. The succession is effective as of January 22, 2024.

3. No court proceeding is required. The Trust instrument provides a comprehensive, self-executing succession mechanism that does not require judicial approval, confirmation, or any other court proceeding. The provisions of the SCPA regarding judicial appointment of successor trustees are inapplicable where, as here, the trust instrument designates a successor and the successor has accepted in accordance with the instrument's terms.

4. Margot's dual status is permissible. Margot's simultaneous service as successor individual trustee and 45% beneficiary of the Trust is permissible under the express terms of the Trust Agreement and under EPTL § 7-2.4, particularly given the continuing co-trusteeship with Caldwell Fiduciary Services Inc., which ensures adequate institutional oversight and prevents any merger of legal and equitable interests.

5. Remaining steps are administrative. The remaining steps — including the execution and circulation of the Certificate of Successor Trustee Appointment, the delivery of beneficiary notices, and the updating of signatory documentation — are procedural and administrative in nature and do not affect the legal effectiveness of the succession. These steps should be completed within the timelines identified in Section VII.B above.

Calderwood & Harkness will proceed immediately with the preparation of the Certificate of Successor Trustee Appointment and the beneficiary notice letters. We will coordinate with Margot and Caldwell on the execution and delivery of these documents and on the subsequent administrative steps necessary to effect a smooth transition of fiduciary responsibilities from Eldon to Margot.

In addition, Calderwood & Harkness will continue to work with Sylvia Hartwell on the forthcoming companion memorandum addressing the tax and legal considerations relating to the in-kind distribution of Trust real-estate holdings to the beneficiaries, which is contemplated as the next phase of this engagement.

We are available to discuss this memorandum and the recommended next steps at your convenience.

Respectfully submitted,

Grace Nakamura Lead Associate, Real Estate Practice Group Calderwood & Harkness LLP One Liberty Plaza, 44th Floor New York, New York 10006 (212) 555-4280 gnakamura@calderwoodharkness.com

Rafael Dominguez Working Associate, Real Estate Practice Group Calderwood & Harkness LLP One Liberty Plaza, 44th Floor New York, New York 10006 (212) 555-4293 rdominguez@calderwoodharkness.com

APPENDICES / ATTACHMENTS (Referenced)

The following appendices are referenced in this memorandum and are attached hereto or maintained in the matter file:

Appendix A: Eldon M. Briarwood Irrevocable Family Trust Agreement dated June 12, 1998 (as amended by First Amendment dated March 3, 2008 and Second Amendment dated December 31, 2015) — Article VII excerpts (Trustee Succession Provisions, Sections 7.1 through 7.5)

Appendix B: Physician's Certification of Incapacity — Dr. Annette Volkov, M.D., dated December 3, 2023 (certifying the permanent incapacity of Eldon M. Briarwood)

Appendix C: Written Acceptance of Successor Trustee Appointment — Margot S. Briarwood, dated January 22, 2024 (accepting appointment as successor individual trustee of the Trust, effective immediately)

Appendix D: Caldwell Fiduciary Services Inc. Acknowledgment Letter — Howard R. Phelan, Senior Vice President, dated January 22, 2024 (acknowledging receipt of Margot's written acceptance and recording the trustee succession in the Trust records)

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT Matter No. 1026-00005	Client: Briarwood Family Office LLC Calderwood & Harkness LLP	One Liberty Plaza, 44th Floor	New York, New York 10006
Asset Category	Approximate Fair Market Value
Marketable securities (equities, fixed income, ETFs)	$18,340,000
Real-estate parcels (three properties, aggregate FMV)	$19,100,000
Cash and money-market funds	$2,210,000
Private-fund interests (Ashgrove Capital Partners Fund III LP)	$1,850,000
Total	$41,500,000
Step	Status	Date
Physician's Incapacity Certification (Dr. Annette Volkov)	Complete	December 3, 2023
Delivery of Incapacity Certification to Caldwell Fiduciary Services Inc.	Complete	~December 5, 2023
Engagement of Calderwood & Harkness LLP by Briarwood Family Office LLC	Complete	January 15, 2024
Margot S. Briarwood's written acceptance of successor trusteeship	Complete	January 22, 2024
Caldwell's acknowledgment of succession and update of Trust records	Complete	January 22, 2024
Step	Target Date	Responsible Party
Execution of Certificate of Successor Trustee Appointment (notarized)	By January 31, 2024	Calderwood & Harkness to prepare; Margot to execute; Caldwell (Howard R. Phelan) to acknowledge
Formal written notice to Tobias E. Briarwood	By February 21, 2024	Margot (as successor trustee) / Calderwood & Harkness
Formal written notice to Nadia Briarwood-Chen	By February 21, 2024	Margot (as successor trustee) / Calderwood & Harkness
Updated signatory cards and authorization forms at Caldwell	By February 28, 2024	Margot / Caldwell
Delivery of trustee certification to financial institutions, title companies, and counterparties as needed	Ongoing	Calderwood & Harkness
Circulation of Trustee Succession Certificate to Reedlaw & Stein LLP (Janet C. Okonkwo, counsel for Tobias)	As applicable	Calderwood & Harkness

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is protected by the attorney-client privilege and the work-product doctrine. It is intended solely for the use of the addressee and the client identified herein. Any dissemination, distribution, or copying of this memorandum without the express written consent of Calderwood & Harkness LLP is strictly prohibited.
CALDERWOOD & HARKNESS LLP Attorneys at Law One Liberty Plaza, 44th Floor New York, New York 10006
MEMORANDUM
TO: Patricia Dunmore, Partner, Calderwood & Harkness LLP
FROM: Grace Nakamura, Lead Associate, Real Estate Practice Group Rafael Dominguez, Working Associate, Real Estate Practice Group
DATE: January 18, 2024
RE: Trustee Succession Under Article VII of the Eldon M. Briarwood Irrevocable Family Trust Agreement dated June 12, 1998 (as amended by First Amendment dated March 3, 2008, and Second Amendment dated December 31, 2015)
MATTER NO.: 1026-00005
CLIENT: Briarwood Family Office LLC
I. EXECUTIVE SUMMARY
The purpose of this memorandum is to analyze the trustee succession provisions triggered by the incapacity of Eldon M. Briarwood ("Eldon" or the "Grantor"), the original individual trustee of the Eldon M. Briarwood Irrevocable Family Trust (the "Trust"), and to confirm that the appointment of Margot S. Briarwood ("Margot") as successor individual trustee satisfies all requirements of the Trust instrument (the "Trust Agreement") and applicable New York law, including the New York Estates, Powers and Trusts Law ("EPTL") and the Surrogate's Court Procedure Act ("SCPA").
Based upon our review of the Trust Agreement (as amended), the physician's certification of incapacity issued by Dr. Annette Volkov on December 3, 2023, and Margot's written acceptance of her appointment as successor individual trustee dated January 22, 2024, we conclude the following:
1. Margot S. Briarwood's acceptance of appointment as successor individual trustee, effective January 22, 2024, properly satisfies all conditions under Article VII of the Trust Agreement and the EPTL. The incapacity certification provided by Dr. Volkov meets the requirements of Section 7.2 of the Trust Agreement, and Margot's written acceptance, delivered to and acknowledged by the institutional co-trustee, completes the self-executing succession mechanism prescribed by Section 7.3.
2. Caldwell Fiduciary Services Inc. ("Caldwell") continues in its role as institutional co-trustee without interruption. The trustee succession occasioned by Eldon's incapacity pertains solely to the individual trustee position. Caldwell's ongoing service as institutional co-trustee is unaffected by this transition.
3. No court proceeding is required to effectuate the succession. The Trust instrument provides a self-executing mechanism for the appointment of a successor individual trustee, subject to the conditions analyzed at length below. Neither the EPTL nor the SCPA requires judicial approval or confirmation of the succession where the trust instrument itself provides an adequate succession mechanism and the successor trustee accepts in accordance with the instrument's terms.
4. Margot's dual status as successor trustee and beneficiary is permissible under both the Trust Agreement and New York statutory law, given that she does not serve as sole trustee of the Trust and that Caldwell provides continuing institutional oversight.
This memorandum sets forth the detailed factual background, the legal analysis supporting these conclusions, and the procedural steps necessary to complete the succession and the associated administrative transition.
II. BACKGROUND
A. The Trust Instrument
The Trust at issue is the Eldon M. Briarwood Irrevocable Family Trust, an irrevocable inter vivos trust created pursuant to a Trust Agreement dated June 12, 1998. Eldon M. Briarwood executed the Trust Agreement in his capacity as both Grantor and original individual trustee. Caldwell Fiduciary Services Inc. was appointed as institutional co-trustee at the Trust's inception and has served continuously in that role since June 12, 1998.
The Trust Agreement is governed by the laws of the State of New York, including the EPTL and applicable common law. The situs of the Trust is New York County, New York. The Trust's federal employer identification number is 13-7284915.
Since its creation, the Trust Agreement has been amended on two occasions:
(1) First Amendment, dated March 3, 2008. The First Amendment modified certain investment-related provisions and updated the schedule of permissible investments to include interests in private investment funds and alternative-asset vehicles. It also adjusted the allocation of fiduciary responsibilities between the individual trustee and the institutional co-trustee to give the individual trustee broader discretion over investment direction, consistent with the co-trusteeship structure established in Article V.
(2) Second Amendment, dated December 31, 2015. The Second Amendment relates principally to the relinquishment by Eldon of his power to substitute trust assets of equivalent value, as reserved under Section 4.7 of the original Trust Agreement. This swap power, which had caused the Trust to be classified as a "grantor trust" for federal income-tax purposes under Internal Revenue Code ("IRC") § 675(4), was released in its entirety. As a result, the Trust's grantor-trust status terminated effective December 31, 2015, and the Trust thereafter became a separate taxable entity filing its own federal and state fiduciary income-tax returns (Form 1041).
Neither the First Amendment nor the Second Amendment modified the trustee succession provisions set forth in Article VII of the Trust Agreement, which remain as originally drafted and executed on June 12, 1998. The trustee succession provisions are therefore analyzed herein with reference to the original Trust Agreement.
As of December 31, 2023, the Trust holds a total corpus of approximately $41,500,000, comprising the following asset categories:
The real-estate holdings are of particular significance to this engagement because the client has indicated that the successor trustee, once properly appointed, will consider in-kind distributions of one or more of these parcels to the beneficiaries in satisfaction of their respective beneficial interests. The legal and tax analysis relating to those anticipated in-kind distributions will be addressed in a separate memorandum; however, the proper succession of the individual trustee is a necessary precondition to the exercise of the distribution authority conferred by the Trust Agreement.
B. The Parties
The following individuals and entities are relevant to this analysis:
Eldon M. Briarwood — Grantor and original individual trustee of the Trust. Eldon is 87 years of age and resides at 27 Fenimore Road, Larchmont, New York 10538. As discussed in Section II.C below, Dr. Annette Volkov, Eldon's attending physician, certified on December 3, 2023 that Eldon is permanently incapacitated and unable to manage his personal and financial affairs. Eldon's incapacity triggered the trustee succession mechanism set forth in Article VII of the Trust Agreement.
Caldwell Fiduciary Services Inc. — Caldwell is a New York–chartered trust company that has served as institutional co-trustee of the Trust since the Trust's inception on June 12, 1998. Caldwell is located at 401 Lexington Avenue, 14th Floor, New York, New York 10174. The trust officer assigned to this Trust is Howard R. Phelan, Senior Vice President. The Caldwell trust account number assigned to the Trust is CFT-00298174. As institutional co-trustee, Caldwell is responsible for the custody of the Trust's marketable securities and cash assets, the maintenance of Trust records, and the preparation and filing of the Trust's fiduciary income-tax returns in coordination with the Trust's outside accounting firm, Halford & Kline CPAs. Caldwell does not hold custody of or exercise management authority over the Trust's real-estate parcels, which are administered directly by the individual trustee.
Margot S. Briarwood — Margot is Eldon's daughter, age 56, and a resident of 14 Waverly Place, Unit 4W, New York, New York 10003. She serves as Managing Director of Briarwood Family Office LLC, the client entity in this engagement, which is located at 780 Park Avenue, Suite 22A, New York, New York 10021. Margot is designated as the first successor individual trustee under Article VII, Section 7.3 of the Trust Agreement. In addition to her role as successor trustee, Margot is a primary beneficiary of the Trust, holding a 45% beneficial interest in the Trust corpus (approximately $18,675,000 based on the December 31, 2023 valuation). Margot's dual status as both successor trustee and beneficiary is discussed in detail in Section III.C below.
Tobias E. Briarwood — Tobias is Eldon's son, age 52, and a resident of 88 Round Hill Road, Greenwich, Connecticut 06831. Tobias serves as an advisory board member of Briarwood Family Office LLC. He is a primary beneficiary of the Trust, holding a 35% beneficial interest in the Trust corpus (approximately $14,525,000 based on the December 31, 2023 valuation). We note that Tobias has separately retained Reedlaw & Stein LLP (Janet C. Okonkwo, Partner, 55 East 59th Street, Suite 1800, New York, New York 10022), as of February 5, 2024, to evaluate the Trust administration and the anticipated in-kind distributions. Calderwood & Harkness represents Briarwood Family Office LLC in this matter and does not represent Tobias individually.
Nadia Briarwood-Chen — Nadia is Eldon's younger daughter, age 48, and a resident of 341 Sterling Place, Apt. 3, Brooklyn, New York 11238. Nadia is a primary beneficiary of the Trust, holding a 20% beneficial interest in the Trust corpus (approximately $8,300,000 based on the December 31, 2023 valuation). Nadia has not retained separate counsel in connection with the trustee succession or the anticipated distributions.
C. The Incapacity Event
On December 3, 2023, Dr. Annette Volkov, Eldon's attending physician (private practice, Larchmont, New York), issued a written certification (the "Incapacity Certification") stating that Eldon M. Briarwood is permanently incapacitated and unable to manage his personal and financial affairs. Dr. Volkov's certification is based upon her ongoing medical treatment and evaluation of Eldon and reflects her professional medical judgment that his condition is permanent in nature. A copy of the Incapacity Certification is attached hereto as Appendix B.
The Incapacity Certification was delivered to Caldwell Fiduciary Services Inc. on or about December 5, 2023. Howard R. Phelan, Senior Vice President at Caldwell, has confirmed receipt of the certification on that date. The delivery of the Incapacity Certification to the institutional co-trustee constitutes the triggering event under Article VII, Section 7.2 of the Trust Agreement, which sets in motion the trustee succession mechanism analyzed in Section III below.
It bears emphasis that the Trust Agreement does not require a judicial determination of incapacity, a separate court proceeding, or a second physician's opinion. The Incapacity Certification issued by Eldon's attending physician is the sole trigger required under Section 7.2. This approach is consistent with the modern trend in trust drafting, which favors private, non-judicial mechanisms for addressing trustee incapacity in order to avoid the expense, delay, and public nature of court proceedings.
D. Engagement Context
Calderwood & Harkness LLP was engaged by Briarwood Family Office LLC on January 15, 2024 to advise on the trustee succession and the subsequent in-kind distribution of Trust real-estate holdings to the beneficiaries. The matter was opened under Matter Number 1026-00005. The responsible partner is Patricia Dunmore; the billing partner is George Trujillo; and the tax specialist assigned to the matter is Sylvia Hartwell, who will provide separate analysis regarding the tax consequences of the anticipated in-kind distributions and any related valuation considerations.
The scope of this memorandum is limited to the trustee succession analysis. The tax and distribution analysis will be addressed in a forthcoming companion memorandum.
III. ANALYSIS OF TRUSTEE SUCCESSION PROVISIONS
A. Article VII, Section 7.2 — Incapacity Standard and Certification
Section 7.2 of the Trust Agreement establishes the standard for determining the incapacity of an individual trustee and the mechanism by which such a determination is made. This provision is the threshold requirement for triggering the trustee succession process: unless the incapacity standard of Section 7.2 is satisfied, the succession mechanism of Section 7.3 is not activated.
Section 7.2 defines "incapacity" for purposes of the Trust Agreement as a determination by the individual trustee's attending physician that the trustee is unable, by reason of physical or mental impairment, to manage the trustee's personal and financial affairs, and that such condition is expected to be permanent. The definition is deliberately self-contained and does not incorporate or cross-reference any statutory definition of incapacity under the EPTL, the SCPA, or New York Mental Hygiene Law. This is significant because it means that the standard for triggering the succession is set exclusively by the Trust instrument itself, rather than by operation of law.
The Trust Agreement imposes three formal requirements for a valid incapacity certification under Section 7.2:
(i) The certification must be in writing;
(ii) The certification must be signed by the attending physician of the individual trustee; and
(iii) The certification must be delivered to the institutional co-trustee (i.e., Caldwell Fiduciary Services Inc.).
We have reviewed the Incapacity Certification issued by Dr. Annette Volkov on December 3, 2023 (attached hereto as Appendix B) and conclude that it satisfies each of these formal requirements:
First, the Incapacity Certification is a written instrument. It is prepared on Dr. Volkov's professional letterhead and sets forth, in clear and unambiguous terms, her medical determination regarding Eldon's condition.
Second, the Incapacity Certification bears the original signature of Dr. Annette Volkov, M.D. Dr. Volkov is identified in the certification as Eldon's attending physician and has treated Eldon in that capacity for a period in excess of fifteen years. The Trust Agreement does not require a particular medical specialty or board certification; it requires only that the certifying physician be the trustee's "attending physician." Dr. Volkov satisfies this requirement.
Third, the Incapacity Certification was delivered to Caldwell Fiduciary Services Inc. on or about December 5, 2023. Howard R. Phelan, Senior Vice President at Caldwell, has confirmed receipt of the certification on that date and has documented the receipt in the Trust's records maintained by Caldwell.
In addition, the Incapacity Certification expressly states that Eldon's incapacity is permanent — that is, Dr. Volkov has determined that his physical or mental impairment is of a nature that precludes recovery to a state in which he would be capable of managing his personal and financial affairs. This permanency determination is required by the Trust Agreement's definition of incapacity, and Dr. Volkov's certification addresses it directly and without qualification.
We note several things the Trust Agreement does not require, each of which is relevant to the sufficiency of the Incapacity Certification:
• The Trust does not require a judicial determination of incapacity. There is no requirement that a court of competent jurisdiction adjudicate Eldon's capacity or enter an order of incapacity under Article 81 of the New York Mental Hygiene Law or any other statute.
• The Trust does not require a second physician's opinion. Some trust instruments require confirmatory opinions from two independent physicians; this Trust requires only the certification of the attending physician.
• The Trust does not require any court proceeding or judicial confirmation of the certification. The certification mechanism is entirely private and non-judicial.
The absence of these additional requirements reflects the Grantor's intent, expressed in the Trust Agreement, to provide a streamlined and efficient mechanism for addressing trustee incapacity without the delay, expense, and public scrutiny associated with court proceedings.
Conclusion as to Section 7.2: Dr. Volkov's Incapacity Certification dated December 3, 2023 is sufficient under Article VII, Section 7.2 of the Trust Agreement to trigger the trustee succession mechanism. All three formal requirements — written certification, signature by the attending physician, and delivery to the institutional co-trustee — have been satisfied. The Trust's incapacity standard has been met, and the succession mechanism of Section 7.3 is properly activated.
B. Article VII, Section 7.3 — Successor Trustee Designation
Having established that the incapacity standard of Section 7.2 has been satisfied, we turn to the succession mechanism itself, which is set forth in Article VII, Section 7.3 of the Trust Agreement.
Section 7.3 provides a hierarchy of named successor individual trustees who are designated to serve in the event that the individual trustee is removed, resigns, dies, or is determined to be incapacitated under Section 7.2. The provision is structured as a sequential list of named individuals, each of whom is entitled to serve as successor individual trustee in order of priority. If the first-named successor is unable or unwilling to serve, the next-named successor in the hierarchy is entitled to accept the appointment, and so on.
The first named successor individual trustee under Section 7.3 is Margot S. Briarwood. Because Margot is willing and able to serve, there is no need to proceed further down the hierarchy of named successors.
Section 7.3 provides, in pertinent part, that the named successor "shall serve as individual trustee upon acceptance of such appointment in writing delivered to the institutional co-trustee." This language establishes two conditions for the succession to become effective:
(i) The named successor must accept the appointment; and
(ii) The acceptance must be in writing and delivered to the institutional co-trustee (Caldwell).
Critically, the Trust Agreement does not condition the effectiveness of the succession on any of the following:
• The approval or consent of any beneficiary of the Trust;
• The approval or consent of the departing (incapacitated) trustee;
• Any court appointment, confirmation, or judicial proceeding; or
• The approval of any third party.
The absence of these additional conditions underscores the self-executing nature of the succession mechanism. Once the triggering event (incapacity certification under Section 7.2) has occurred and the named successor has delivered a written acceptance to the institutional co-trustee, the succession is complete. No further action is required to vest the successor trustee with the powers, duties, and responsibilities of the individual trusteeship.
Section 7.3 further provides that the institutional co-trustee is directed to "acknowledge receipt of such acceptance and record the succession in the Trust records." This acknowledgment and recording function is ministerial in nature; it does not constitute a condition precedent to the effectiveness of the succession but rather serves as an administrative step to document the transition and maintain the integrity of the Trust's records.
As discussed in Section IV.C below, Margot S. Briarwood executed a written instrument accepting her appointment as successor individual trustee on January 22, 2024, and this acceptance was delivered to Howard R. Phelan at Caldwell on the same date. Caldwell acknowledged the succession and recorded it in the Trust's records.
Conclusion as to Section 7.3: The succession mechanism under Article VII, Section 7.3 is self-executing upon (i) the occurrence of the triggering event (the incapacity certification under Section 7.2, which occurred on December 3, 2023), and (ii) the named successor's written acceptance delivered to Caldwell (which occurred on January 22, 2024). Both conditions have been satisfied. Margot S. Briarwood is properly appointed as successor individual trustee of the Trust, effective January 22, 2024.
C. Margot S. Briarwood's Dual Role as Successor Trustee and Beneficiary
An issue that warrants careful analysis is Margot's dual status as both the designated first successor individual trustee and a primary beneficiary of the Trust, holding a 45% beneficial interest in the Trust corpus. The question is whether this dual role creates a conflict of interest or is otherwise impermissible under the Trust Agreement or applicable New York law.
The Trust Agreement. The Trust Agreement itself expressly contemplates Margot's dual role. Section 7.3 designates Margot as the first successor individual trustee, and the Trust Agreement separately identifies her as a primary beneficiary holding a specified percentage interest in the Trust corpus. The Grantor, in drafting the Trust Agreement, was presumably aware that the individual designated as first successor trustee was also a beneficiary, and the Trust Agreement contains no provision that would disqualify a beneficiary from serving as trustee or that would require the successor trustee to disclaim or relinquish a beneficial interest as a condition to serving. To the contrary, the express designation of Margot as both successor trustee and beneficiary reflects the Grantor's intent that she serve in both capacities simultaneously.
New York Law. Under EPTL § 7-2.4, a beneficiary may serve as trustee of a trust, subject to certain limitations designed to prevent a merger of legal and equitable interests. Specifically, the statute provides that a beneficiary who is the sole trustee of a trust in which the beneficiary holds a beneficial interest in income or principal may cause a merger of the legal and equitable estates, thereby terminating the trust — unless the trustee's power over income or principal is limited by an ascertainable standard relating to the beneficiary's health, education, maintenance, or support. The purpose of this rule is to prevent a situation in which a single individual holds both the entire legal interest (as sole trustee) and a beneficial interest (as beneficiary), which could be argued to collapse the trust relationship.
Here, however, Margot is not the sole trustee of the Trust. Caldwell Fiduciary Services Inc. continues to serve as institutional co-trustee, and its appointment is unaffected by the trustee succession. The co-trusteeship structure ensures that the legal interest in the Trust's assets is held jointly by Margot (as individual trustee) and Caldwell (as institutional co-trustee), rather than being vested in Margot alone. Accordingly, no merger of legal and equitable interests arises under EPTL § 7-2.4, and Margot's service as successor individual trustee while simultaneously holding a 45% beneficial interest does not create a disqualifying conflict under New York statutory law.
Moreover, the continuing co-trusteeship with Caldwell provides meaningful fiduciary checks and institutional oversight. As discussed in Section VI below, Caldwell retains responsibility for the custody of the Trust's marketable securities and cash assets, record-keeping, tax reporting, and certain ministerial functions. Caldwell's continuing involvement ensures that the Trust's administration is subject to institutional oversight and accountability, even though the individual trustee (Margot) also holds a substantial beneficial interest.
We further note that New York courts have consistently upheld the validity of trust arrangements in which a beneficiary serves as one of multiple co-trustees, particularly where the trust instrument itself authorizes such service and where adequate fiduciary safeguards are in place. See, e.g., In re Wallens, 9 N.Y.3d 117 (2007) (discussing the permissibility of beneficiary-trustees under New York law); In re Estate of Donner, 82 N.Y.2d 574 (1993) (examining the scope of a co-trustee's fiduciary duties where one co-trustee holds a beneficial interest). While the factual circumstances of the Briarwood Trust are distinguishable in certain respects from the cited authorities, the underlying principles are applicable and support the conclusion that Margot's dual role is permissible.
Conclusion as to Dual Role: Margot S. Briarwood's simultaneous service as successor individual trustee and 45% beneficiary of the Trust is permissible under both the express terms of the Trust Agreement and EPTL § 7-2.4. The continuing co-trusteeship with Caldwell Fiduciary Services Inc. ensures that no merger of interests arises and provides adequate institutional oversight of the Trust's administration.
IV. REQUIREMENTS UNDER NEW YORK LAW (EPTL) FOR ACCEPTANCE OF TRUSTEESHIP
A. Statutory Framework
The acceptance of a trusteeship under New York law is governed by EPTL § 7-2.1 and related provisions. EPTL § 7-2.1 provides that an individual nominated or designated as trustee may accept or decline the position. The statute does not impose a rigid formal requirement for acceptance; rather, acceptance may be either express (by a written instrument or oral declaration) or implied (by conduct consistent with the assumption of trustee duties, such as taking possession of trust assets, exercising trustee powers, or otherwise acting in a manner that manifests an intent to serve).
Notwithstanding the flexibility afforded by the statutory framework, best practice — and, critically, the Trust Agreement itself — calls for express written acceptance of the trusteeship. A written acceptance provides certainty as to the date on which the succession becomes effective, eliminates ambiguity regarding the successor's intent, and creates a documentary record that can be relied upon by third parties such as financial institutions, title companies, counterparties to Trust transactions, and, if necessary, courts.
Under the Surrogate's Court Procedure Act (SCPA) § 1502 and related provisions, no court proceeding is required to effectuate the appointment of a successor trustee where the trust instrument provides a succession mechanism and the successor accepts in accordance with the instrument's terms. SCPA § 1502 provides for the appointment of a successor trustee by the Surrogate's Court in situations where the trust instrument does not designate a successor or where the designated successor is unable or unwilling to serve. Because the Trust Agreement here provides a comprehensive succession mechanism (Article VII, Sections 7.2 and 7.3), and the first-named successor (Margot) has accepted the appointment, the judicial appointment provisions of the SCPA are inapplicable.
In summary, the statutory framework supports the conclusion that the succession can be — and has been — effectuated entirely through the private, non-judicial mechanism provided by the Trust Agreement, without the need for court involvement.
B. Formal Requirements of the Trust Instrument
As set forth above, Article VII, Section 7.3 of the Trust Agreement establishes the following formal requirements for the effective succession of the individual trusteeship:
1. Written acceptance by the successor trustee. The acceptance must be in writing and must express the successor's intent to assume the duties and responsibilities of the individual trusteeship.
2. Delivery of such acceptance to the institutional co-trustee (Caldwell Fiduciary Services Inc.). The delivery of the written acceptance to Caldwell is the act that completes the succession and vests the successor with the authority of the individual trustee.
3. Acknowledgment by Caldwell of the succession. As discussed above, this acknowledgment is ministerial in nature and is not a condition precedent to the effectiveness of the succession. However, it serves to document the transition in the Trust's records and to confirm Caldwell's awareness of the change in individual trusteeship.
In addition to these requirements imposed by the Trust Agreement, we recommend the following additional steps, which, although not strictly required by the Trust instrument, are advisable in light of the Trust's asset composition (in particular, its real-estate holdings) and the anticipated distribution transactions:
• Notarized acceptance instrument. Although the Trust Agreement does not require notarization of the written acceptance, a notarized acceptance is useful for recording with the county clerk's office and for title-insurance purposes related to the Trust's real-estate holdings. Title companies and recording offices routinely require notarized documentation to verify the authority of individuals acting in a fiduciary capacity with respect to real property.
• Certificate of Successor Trustee Appointment. We recommend the preparation and execution of a formal Certificate of Successor Trustee Appointment, which can be presented to third parties, financial institutions, title companies, and counterparties as evidence of Margot's authority to act on behalf of the Trust. The certificate will reference the Trust Agreement, the Incapacity Certification, and the written acceptance, and will be executed by Margot and acknowledged by Caldwell.
• Notice to all beneficiaries. As discussed in Section V below, the Trust Agreement requires written notice of the succession to all current beneficiaries, and such notice is also advisable under applicable provisions of the EPTL.
C. Margot's Acceptance — January 22, 2024
On January 22, 2024, Margot S. Briarwood executed a written instrument (the "Acceptance") accepting her appointment as successor individual trustee of the Eldon M. Briarwood Irrevocable Family Trust, effective immediately upon execution and delivery. A copy of the Acceptance is attached hereto as Appendix C.
The Acceptance was delivered to Howard R. Phelan, Senior Vice President at Caldwell Fiduciary Services Inc., on the same date, January 22, 2024. Mr. Phelan, acting on behalf of Caldwell in its capacity as institutional co-trustee, acknowledged receipt of the Acceptance and recorded the trustee succession in the Trust's records maintained by Caldwell. A copy of Caldwell's acknowledgment letter is attached hereto as Appendix D.
Calderwood & Harkness is currently preparing a formal Certificate of Successor Trustee Appointment for Margot's execution. The certificate will be notarized and will be circulated to all relevant parties, including Caldwell, the Trust's financial institutions, the Trust's title company, and any counterparties to Trust transactions. The certificate will reference the following documents:
(i) The Trust Agreement (as amended);
(ii) The Incapacity Certification issued by Dr. Annette Volkov, dated December 3, 2023; and
(iii) The written Acceptance executed by Margot S. Briarwood, dated January 22, 2024.
Conclusion as to Acceptance: Margot's written Acceptance, delivered to and acknowledged by Caldwell on January 22, 2024, satisfies all requirements of Article VII, Section 7.3 of the Trust Agreement and the applicable provisions of the EPTL. The succession of the individual trusteeship from Eldon M. Briarwood to Margot S. Briarwood is effective as of January 22, 2024.
V. NOTICE REQUIREMENTS TO BENEFICIARIES
A. Trust Instrument Requirements
Article VII, Section 7.4 of the Trust Agreement imposes a notice requirement in connection with any trustee succession. Specifically, Section 7.4 provides that the successor trustee must deliver written notice of the trustee succession to all current beneficiaries of the Trust within thirty (30) days of the effective date of the succession. The required notice must identify the following:
(i) The departing trustee and the reason for the vacancy (in this case, Eldon M. Briarwood and his incapacity as certified by Dr. Volkov);
(ii) The identity of the successor trustee (Margot S. Briarwood); and
(iii) The effective date of the succession (January 22, 2024).
Importantly, the notice required by Section 7.4 is informational only. Beneficiary consent or approval is not a condition to the effectiveness of the trustee succession. The succession took effect upon Margot's written acceptance and its delivery to Caldwell, as analyzed above, and the notice obligation is a post-succession administrative requirement that does not affect the validity of the succession itself.
The purpose of the notice requirement is to ensure that the Trust's beneficiaries are informed of the change in fiduciary leadership and have an opportunity to raise any concerns or objections through appropriate channels. While the notice does not confer a veto power or approval right on the beneficiaries, it serves the important function of transparency and is consistent with the general fiduciary duty of a trustee to keep beneficiaries reasonably informed of the administration of the trust.
B. Statutory Notice Under EPTL
In addition to the contractual notice requirement imposed by the Trust Agreement, we have considered whether any statutory notice obligation applies. EPTL § 7-A-7, which applies to lifetime trusts with a New York situs to the extent the Trust constitutes an "express trust" under the statute, may require notification to "qualified beneficiaries" of a change in trusteeship. The statute defines "qualified beneficiaries" to include current beneficiaries and first-line remainder beneficiaries who would be entitled to distributions of income or principal if the trust were terminated on the date in question.
The three beneficiaries of the Trust — Margot S. Briarwood, Tobias E. Briarwood, and Nadia Briarwood-Chen — are all "qualified beneficiaries" within the meaning of the statute and are entitled to notice of the trustee succession. The form and content of the statutory notice substantially overlap with the notice required by Section 7.4 of the Trust Agreement, and a single notice instrument can be designed to satisfy both the contractual and statutory requirements.
Best practice is to provide written notice by certified mail, return receipt requested, or by hand-delivery with written acknowledgment of receipt. These methods of delivery create a documentary record of the notice and its receipt, which may be important if any beneficiary later contends that adequate notice was not provided.
C. Recommended Steps
Based on the foregoing analysis, we recommend the following steps to satisfy the notice requirements:
1. Notice to Tobias E. Briarwood. Calderwood & Harkness will draft a formal notice letter for Margot, in her capacity as successor trustee, to deliver to Tobias at his residence at 88 Round Hill Road, Greenwich, Connecticut 06831. Given that Tobias has separately retained Reedlaw & Stein LLP (Janet C. Okonkwo, Partner, 55 East 59th Street, Suite 1800, New York, New York 10022) as of February 5, 2024 to evaluate the Trust administration, notice should also be delivered to Reedlaw & Stein as counsel of record for Tobias. The notice to Tobias and his counsel should be sent by certified mail, return receipt requested, and, if practicable, by email with a request for written confirmation of receipt.
2. Notice to Nadia Briarwood-Chen. Calderwood & Harkness will draft a corresponding notice letter for delivery to Nadia at her residence at 341 Sterling Place, Apt. 3, Brooklyn, New York 11238. The notice should be sent by certified mail, return receipt requested. To date, Nadia has not retained separate counsel in connection with the trustee succession or the anticipated distributions, and no notice to counsel is required.
3. Documentation of Margot's awareness. Because Margot is both the successor trustee and a beneficiary of the Trust, she need not formally give notice to herself. However, a record of her awareness of the succession — which is self-evident from her execution of the Acceptance — should be documented in the Trust's records for completeness.
The notice letters should be sent within 30 days of January 22, 2024, the effective date of the succession — that is, by no later than February 21, 2024. Calderwood & Harkness will prepare the draft notice letters for Margot's review and execution and will coordinate the delivery of the notices within this timeframe.
VI. CALDWELL FIDUCIARY SERVICES INC. — CONTINUING ROLE AS INSTITUTIONAL CO-TRUSTEE
A. Continuity of Appointment
Caldwell Fiduciary Services Inc. was appointed as institutional co-trustee of the Trust upon its creation on June 12, 1998, and has served continuously in that capacity for over twenty-five years. The trustee succession occasioned by Eldon's incapacity affects only the individual trustee position; Caldwell's role as institutional co-trustee is entirely unaffected by the transition, and Caldwell continues to serve in that capacity without interruption.
Article V, Section 5.1 of the Trust Agreement defines the respective roles and responsibilities of the individual trustee and the institutional co-trustee. The division of responsibilities is as follows:
Individual trustee (now Margot S. Briarwood): The individual trustee is responsible for investment direction, including the selection and monitoring of the Trust's investments; distribution decisions, including the exercise of any discretionary distribution authority conferred by the Trust Agreement; overall administration of the Trust, including the management of the Trust's real-estate holdings; and the exercise of any special powers reserved to the individual trustee under the Trust Agreement.
Institutional co-trustee (Caldwell Fiduciary Services Inc.): The institutional co-trustee is responsible for the custody of the Trust's marketable securities and cash assets held in the Caldwell trust account (Account No. CFT-00298174); the maintenance of the Trust's official records, including records of all transactions, distributions, and receipts; the preparation and filing of the Trust's federal and state fiduciary income-tax returns (Form 1041 and New York Form IT-205) in coordination with the Trust's outside accounting firm, Halford & Kline CPAs; and the performance of ministerial functions, including the execution of trades and settlements at the direction of the individual trustee and the issuance of account statements and reports.
Caldwell's annual administrative fee for its services as institutional co-trustee is set at 0.12% of the Trust corpus, as provided in the fee schedule attached to the Trust Agreement and most recently confirmed by Caldwell's engagement letter dated January 2023. Based on the December 31, 2023 corpus valuation of $41,500,000, Caldwell's current annual administrative fee is approximately $49,800 per year. This fee is payable quarterly from Trust assets and is deducted from the Trust's cash and money-market fund balances.
B. Caldwell's Acknowledgment
Howard R. Phelan, Senior Vice President at Caldwell and the trust officer assigned to the Briarwood Trust, has confirmed Caldwell's acknowledgment of the trustee succession and its continued willingness to serve as institutional co-trustee of the Trust. Mr. Phelan's acknowledgment was communicated to Calderwood & Harkness in writing on January 22, 2024 (a copy of which is attached hereto as Appendix D), and Caldwell has updated the Trust's records to reflect Margot S. Briarwood as successor individual trustee effective January 22, 2024.
Caldwell has not raised any concerns or objections regarding the trustee succession or Margot's appointment as successor individual trustee. Caldwell has confirmed that the transition does not affect any existing custody arrangements, investment positions, or pending transactions of the Trust and that it will continue to perform its duties as institutional co-trustee in accordance with the Trust Agreement and its engagement letter.
C. Administrative Coordination
The transition to a new individual trustee requires certain administrative steps to update the Trust's relationships with financial institutions, counterparties, and service providers. Specifically, Margot, as successor individual trustee, will need to:
• Execute updated signatory cards with Caldwell, authorizing Margot to direct investment transactions, approve distributions, and execute other instructions on behalf of the Trust;
• Execute updated custody agreements and authorization forms with Caldwell, reflecting the change in individual trusteeship and confirming the terms of the existing custody arrangement;
• Provide updated trustee certifications to financial institutions holding Trust assets or accounts, including any banks, brokerage firms, or other custodians;
• Provide updated trustee certifications to title companies and recording offices in connection with the Trust's real-estate holdings; and
• Coordinate with Halford & Kline CPAs regarding the Trust's tax-reporting obligations and the filing of the Trust's fiduciary income-tax returns for the taxable year ending December 31, 2023.
Calderwood & Harkness will coordinate with Caldwell on the delivery of updated trustee certifications and will prepare the necessary documentation for Margot's execution.
VII. PROCEDURAL STEPS FOR COMPLETING THE SUCCESSION
A. Completed Steps
The following steps in the trustee succession process have been completed as of the date of this memorandum:
With the completion of these steps, the succession of the individual trusteeship from Eldon M. Briarwood to Margot S. Briarwood has been legally effectuated. The remaining steps identified in Section VII.B below are administrative in nature and do not affect the validity or effectiveness of the succession.
B. Pending Steps
The following administrative steps remain pending and should be completed within the target dates indicated:
Calderwood & Harkness will monitor the completion of each pending step and will coordinate with Margot and Caldwell to ensure timely execution. We will report to Patricia Dunmore upon the completion of each material milestone.
VIII. CONCLUSION
Based upon our analysis of the Trust Agreement, the Incapacity Certification, Margot's written Acceptance, and applicable provisions of New York law, we reach the following conclusions:
1. The trustee succession has been properly effectuated. The physician's certification of Eldon M. Briarwood's permanent incapacity, issued by Dr. Annette Volkov on December 3, 2023, satisfies the incapacity standard and certification requirements of Article VII, Section 7.2 of the Trust Agreement. This certification triggered the self-executing succession mechanism of Section 7.3.
2. Margot S. Briarwood is properly appointed as successor individual trustee. Margot's written acceptance of her appointment, delivered to and acknowledged by Caldwell Fiduciary Services Inc. on January 22, 2024, satisfies all conditions under Article VII, Sections 7.2 and 7.3 of the Trust Agreement and the requirements of the New York Estates, Powers and Trusts Law. The succession is effective as of January 22, 2024.
3. No court proceeding is required. The Trust instrument provides a comprehensive, self-executing succession mechanism that does not require judicial approval, confirmation, or any other court proceeding. The provisions of the SCPA regarding judicial appointment of successor trustees are inapplicable where, as here, the trust instrument designates a successor and the successor has accepted in accordance with the instrument's terms.
4. Margot's dual status is permissible. Margot's simultaneous service as successor individual trustee and 45% beneficiary of the Trust is permissible under the express terms of the Trust Agreement and under EPTL § 7-2.4, particularly given the continuing co-trusteeship with Caldwell Fiduciary Services Inc., which ensures adequate institutional oversight and prevents any merger of legal and equitable interests.
5. Remaining steps are administrative. The remaining steps — including the execution and circulation of the Certificate of Successor Trustee Appointment, the delivery of beneficiary notices, and the updating of signatory documentation — are procedural and administrative in nature and do not affect the legal effectiveness of the succession. These steps should be completed within the timelines identified in Section VII.B above.
Calderwood & Harkness will proceed immediately with the preparation of the Certificate of Successor Trustee Appointment and the beneficiary notice letters. We will coordinate with Margot and Caldwell on the execution and delivery of these documents and on the subsequent administrative steps necessary to effect a smooth transition of fiduciary responsibilities from Eldon to Margot.
In addition, Calderwood & Harkness will continue to work with Sylvia Hartwell on the forthcoming companion memorandum addressing the tax and legal considerations relating to the in-kind distribution of Trust real-estate holdings to the beneficiaries, which is contemplated as the next phase of this engagement.
We are available to discuss this memorandum and the recommended next steps at your convenience.
Respectfully submitted,
Grace Nakamura Lead Associate, Real Estate Practice Group Calderwood & Harkness LLP One Liberty Plaza, 44th Floor New York, New York 10006 (212) 555-4280 gnakamura@calderwoodharkness.com
Rafael Dominguez Working Associate, Real Estate Practice Group Calderwood & Harkness LLP One Liberty Plaza, 44th Floor New York, New York 10006 (212) 555-4293 rdominguez@calderwoodharkness.com
APPENDICES / ATTACHMENTS (Referenced)
The following appendices are referenced in this memorandum and are attached hereto or maintained in the matter file:
Appendix A: Eldon M. Briarwood Irrevocable Family Trust Agreement dated June 12, 1998 (as amended by First Amendment dated March 3, 2008 and Second Amendment dated December 31, 2015) — Article VII excerpts (Trustee Succession Provisions, Sections 7.1 through 7.5)
Appendix B: Physician's Certification of Incapacity — Dr. Annette Volkov, M.D., dated December 3, 2023 (certifying the permanent incapacity of Eldon M. Briarwood)
Appendix C: Written Acceptance of Successor Trustee Appointment — Margot S. Briarwood, dated January 22, 2024 (accepting appointment as successor individual trustee of the Trust, effective immediately)
Appendix D: Caldwell Fiduciary Services Inc. Acknowledgment Letter — Howard R. Phelan, Senior Vice President, dated January 22, 2024 (acknowledging receipt of Margot's written acceptance and recording the trustee succession in the Trust records)
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT Matter No. 1026-00005 | Client: Briarwood Family Office LLC Calderwood & Harkness LLP | One Liberty Plaza, 44th Floor | New York, New York 10006
Asset Category | Approximate Fair Market Value
Marketable securities (equities, fixed income, ETFs) | $18,340,000
Real-estate parcels (three properties, aggregate FMV) | $19,100,000
Cash and money-market funds | $2,210,000
Private-fund interests (Ashgrove Capital Partners Fund III LP) | $1,850,000
Total | $41,500,000
Step | Status | Date
Physician's Incapacity Certification (Dr. Annette Volkov) | Complete | December 3, 2023
Delivery of Incapacity Certification to Caldwell Fiduciary Services Inc. | Complete | ~December 5, 2023
Engagement of Calderwood & Harkness LLP by Briarwood Family Office LLC | Complete | January 15, 2024
Margot S. Briarwood's written acceptance of successor trusteeship | Complete | January 22, 2024
Caldwell's acknowledgment of succession and update of Trust records | Complete | January 22, 2024
Step | Target Date | Responsible Party
Execution of Certificate of Successor Trustee Appointment (notarized) | By January 31, 2024 | Calderwood & Harkness to prepare; Margot to execute; Caldwell (Howard R. Phelan) to acknowledge
Formal written notice to Tobias E. Briarwood | By February 21, 2024 | Margot (as successor trustee) / Calderwood & Harkness
Formal written notice to Nadia Briarwood-Chen | By February 21, 2024 | Margot (as successor trustee) / Calderwood & Harkness
Updated signatory cards and authorization forms at Caldwell | By February 28, 2024 | Margot / Caldwell
Delivery of trustee certification to financial institutions, title companies, and counterparties as needed | Ongoing | Calderwood & Harkness
Circulation of Trustee Succession Certificate to Reedlaw & Stein LLP (Janet C. Okonkwo, counsel for Tobias) | As applicable | Calderwood & Harkness

MEMORANDUM

MATTER NO.: 1026-00005

I. EXECUTIVE SUMMARY

II. BACKGROUND

III. ANALYSIS OF TRUSTEE SUCCESSION PROVISIONS

IV. REQUIREMENTS UNDER NEW YORK LAW (EPTL) FOR ACCEPTANCE OF TRUSTEESHIP

V. NOTICE REQUIREMENTS TO BENEFICIARIES

VII. PROCEDURAL STEPS FOR COMPLETING THE SUCCESSION

VIII. CONCLUSION

Record

Parties

Dates

Amounts