1.    Refinance.  With interest rates low, now is the time to act to refinance and cut costs before interest rates rise.  Have you reviewed your properties with counsel to ascertain what you need to refinance?  Are your estoppel certificates in order?  Any outstanding litigation cases that need to be resolved, in case your lender asks?  Stark & Stark’s Real Estate Group can manage these issues.  

2.   Reduce Taxes.  Have you considered filing a real estate tax appeal before the deadline?  April 1st is almost here.  Have you considered 1031 exchanges to provide tax benefits?  Stark & Stark’s Business & Corporate Group can help guide you through these tax issues.

3.   Plan.  Have you consulted with counsel lately to discuss and update your plans and options, including estate planning and business succession planning?  An experienced trusts and estates counsel can ensure that the maximum amount of your money stays where you want it, instead of going to Uncle Sam.  Stark & Stark’s Trusts & Estates Group can assist in planning for your future.

4.  Reduce Responsibilities.  Have you updated all your documents and procedures to reduce your responsibilities?  Have you minimized your repair and construction costs?  Have you reduced your utility and compliance costs?  Stark & Stark’s Real Estate and Construction Groups have the expertise you need.

5.   Improve Insurance.  When was the last time you reviewed and updated your insurance coverage?  Have you looked at your coverage in the wake of Hurricane Sandy?  Do you know what risks are not covered?  Are you relying on certificates of insurance that may not protect you?  Stark & Stark’s Insurance Group is here for you.

6.   Manage Risks.  Have you updated your compliance procedures, employee handbooks, and other documents and procedures to prevent problems?  Have you considered all available dispute resolution options?  Stark & Stark’s Employment Group can provide you with solutions to these issues.

7.   Improve Properties.  Have you recently developed or remodeled your real estate to attract and retain the best tenants and increase rents?  Stark & Stark’s Land Use Group can help you assess the legal issues with your property improvements.

8.  Increase Collections.  Are you collecting your unpaid debts while complying with the Fair Debt Collection Practices Act and other applicable laws?  Will your strategies and procedures reduce future debt collection problems?  Are you enforcing all your bankruptcy and other rights?  Stark & Stark’s Bankruptcy & Creditor’s Rights Group is here for you.

9.   Improve Your Deals.Do your documents maximize recovery of operating expenses and unpaid rent?  Have you included all the language you need in different jurisdictions, such as "additional rent" language to capture all rent in New Jersey evictions and Confession of Judgment language to expedite rent recovery in Pennsylvania?  Stark & Stark is a regional firm with offices in New Jersey, New York, and Pennsylvania.

10.   Get Deals Done Faster.  Do your negotiations take too long?  Are you expediting the negotiation and drafting of letters of intent, leases, amendments, contracts, and other documents? Stark & Stark’s Real Estate Group understands the immediacy of “now” and can help you with your needs.

These are just a few examples of how landlords can, with the help of good legal counsel, improve the bottom line now.  Evaluating these questions requires careful review on an individual basis with experienced counsel.  Having an attorney familiar with these issues is critical.  The attorneys at Stark & Stark understand the real estate community and can provide you the insight you need to address these and other questions for your real estate and business needs.

Feel free to contact Jerry Nelson at 609.945.7635 or jnelson@stark-stark.com for a review of your real estate and business issues.

Jerry A. Nelson, Esq. is a Shareholder and member of Stark & Stark's Business & Corporate and Real Estate, Zoning & Land Use Groups.  He writes regularly on issues for commercial landlords and brokers.  He is a member of the International Council of Shopping Centers and a regular speaker on commercial landlord issues.

Obviously, if the current Will is deemed valid, then in that event, the validity of the previous Will is irrelevant. On the other hand, if the current Will is deemed invalid it becomes extremely important whether the previous Will is valid. As such, it is important for a party to consider the possibility as to the distribution under both current Will and the previous Will in the context of a Will contest. That is because it is necessary for the parties to consider how the property may be distributed under either Will in order to be fully informed. Also, the parties should consider the possibility of intestacy, and the potential distributions under this scenario.

Paul Norris is a Shareholder in Stark & Stark's Probate Litigation Group in our Lawrenceville, New Jersey office. For questions, or additional information, please contact Mr. Norris.

One of the grounds upon which the validity of a Will may be attacked is if the Will was not created and executed by disinterested counsel.  In general, this means that the party contesting the Will believes that the attorney who drafted the Will had either a prior relationship with one of the beneficiaries under the Will, had a personal stake in a bequest made under the Will, or the attorney allowed a beneficiary to directly participate in the drafting and execution of the Will.  Obviously, if the person seeking to create a Will has had their own attorney they have utilized for many years it is perfectly acceptable for this attorney to draft a Will.  Any potential beneficiaries to the Will, however, should not engage in discussions about specific provisions of the Will with the attorney who will be drafting the Will.  Moreover, any potential beneficiary should not be present or witness the Will which is being executed.

While it is okay to refer a person to an attorney to draft a Will on a party’s behalf, a party should be careful if the attorney to whom they are referring the individual has been their personal attorney, and they stand to benefit by provisions of the Will.  While this does not automatically invalidate the Will, a party should be careful to insulate themselves from discussions with the attorney about the provisions of the Will, and should not be present when the Will is executed.  If this was to occur, a party may assert that the attorney was not disinterested counsel, as their previous client benefitted by the terms of the Will he/she drafted.

One issue which may lend itself to a stern challenge is where an attorney drafted a Will under which he or she may be a direct beneficiary.  Equally suspicious is where a person drafts a Will on behalf of another party by which they themselves benefit.  While this does not rise to the same level of an attorney drafting a Will by which they benefit, it obviously creates suspicious circumstances which a party should avoid at all costs.

A review of the within advice will hopefully lend some guidance in the selection of proper disinterested counsel for the creation and execution of a Will on behalf of a party.  Should a party have questions, than they should consult directly with an attorney as to what would be the appropriate course of action.

Paul Norris is a Shareholder in Stark & Stark's Litigation Group in our Lawrenceville, New Jersey office. For questions, or additional information, please contact Mr. Norris.

In order to establish the invalidity of a Will based upon an allegation of undue influence, the challenging party must present evidence which demonstrates that the type of conduct which occurred caused the decedent to execute a Will which did not accurately reflect his/her true intentions, but instead, those of the other party.

During a Will contest, a party may be successful in shifting the burden of proof to the other side to demonstrate that there was no undue influence in the execution of the Will.  The shifting of the burden of proof may occur when there is a confidential relationship between the proponent and the decedent, such as any attorney/client relationship, a power of attorney relationship, or any other relationship where trust and confidence naturally exists.  Should a party also establish the existence of suspicious circumstances, it may shift the burden of proof to the proponent of the Will to demonstrate its validity.
   

If a party is successful in establishing the invalidity of a Will based upon an allegation of undue influence, then the Testator may be deemed to have died intestate, or in the alternative, it may revert to a previous Will of the decedent provided a copy still exists.  Factors that the Court may consider in determining whether a Testator may have been subjected to undue influence concern a decedent’s health at the time the Will was executed, the relationship between the decedent and the person who benefitted by the newly drafted Will, and whether the decedent was in good mental and physical health during the same time.  There is no set formula in this regard; however, factors which demonstrate a mental or physical weakness may make the individual more susceptible to undue influence.
   

Should a party wish to challenge a Will based upon undue influence, it is suggested that they consult with any attorney as this is a complex process.

Paul Norris is a Shareholder in Stark & Stark's Litigation Group in our Lawrenceville, New Jersey office. For questions, or additional information, please contact Mr. Norris.

Should a beneficiary wish to challenge the validity of a Will based upon the mental capacity of the decedent, the beneficiary would bear the burden of proof to overcome the presumption that the Will was valid. As such, a beneficiary who seeks to uphold the terms of the Will need not establish its validity, but instead, a party who wishes to invalidate a Will must establish the incapacity of the Testator at the time the Will was executed. A challenge to the capacity of a descendent may involve a review of the relevant medical records, testimony of first-hand witnesses, as well as other factors which relate to the competency of the Testator at the time the Will was executed.
 

This is a general overview as to the mental capacity required of a descendent to execute a Will, as well as what an attack levied by another party seeking to invalidate a Will on the grounds of lack of capacity may entail.

Paul Norris is a Shareholder in Stark & Stark's Litigation Group in our Lawrenceville, New Jersey office. For questions, or additional information, please contact Mr. Norris.

New Jersey law is as follows:

For a single person:

1. To the person’s descendants
2. If there are no descendants, to the person’s parents
3. If there are no descendants or parents, to the descendants of the person’s parents
4. If there are no descendants, parents, or descendants of parents, one-half to the paternal grandparents, or if they are also deceased, to their descendants; and the other one-half to the maternal grandparents, or their descendants
5. If there are no descendants of grandparents, to stepchildren
6.  

For a married person (spouse or domestic partner):

1. The entire estate passes to the surviving spouse, if there are no descendants or parents of the deceased.
2. If there are descendants, all of whom are also descendants of the surviving spouse, then the surviving spouse receives the entire estate.
3. If the deceased is survived by a spouse and parent(s), the spouse receive the first 25% of the estate, but not less than $50,000 nor more than $200,000, plus 75% of the balance; the parent(s) receive the remaining property of the estate.
4. If the surviving descendants are also descendants of the surviving spouse, and the surviving spouse has other descendants; or if there is a descendant of the deceased who is not a descendant of the surviving spouse, then the spouse receives the first 25% of the estate, but not less than $50,000 nor more than $200,000, plus 50% of the balance.  The descendants receive the remaining property of the estate.

Now, maybe these are the people who you would want to inherit from you. But maybe they are not. Preparing and signing a Will gives you the power of choice to benefit others - family, friends, and/or charity - rather than relinquishing that choice to the government.
 

There is another important issue that state law will control if a person has died without a Will: guardianship of your minor children. If a child under the age of 18 has no living parent, state law determines that the child’s closest next of kin have the first right to serve as the child’s guardian. Being the closest relative does not really qualify someone to raise a child. And, if several persons are related in the same way to the child (for example, both sets of grandparents), the Court then decides, with both sides of the family incurring legal fees as well suffering an emotional hardship. Again, it is a matter of choice - should you choose who should raise your child in the event of an untimely death, or should the government?
 

Preparing a Will is not something you do for you - it is something you do for your family. To ensure your loved ones are benefitted, that your children are properly cared for, and that your estate is administered at the least possible cost, please contact us as to how we can assist you in preparing a Will and other estate planning documents.

Rose Durkin is a Shareholder in Stark & Stark's Lawrenceville, New Jersey office specializing in Wills & Estate Planning. For questions, please contact Ms. Durkin.

It is an issue that most of us will be confronted with at some point in the future; how best to care for an aging loved one. People commonly think a Power of Attorney is the only method by which to manage another person’s affairs who may no longer be competent to do so. There are other forms of protective arrangements, however, under New Jersey Law which provides a person who is to serve in a  fiduciary role with substantial latitude to provide care for their loved one. These arrangements differ in nature as to the scope of the supervisory role.

The two most common forms of protective arrangements under New Jersey Law are Guardianships and Conservatorships.

Guardianships are Court supervised arrangements that provide surrogate decision making for minors or persons who are incapacitated – that is, unable to manage their property and affairs effectively.  The arrangement is typically commenced by a third-party application to the Court, and once the Court adjudicates a person to be incapacitated, it obtains jurisdiction over an incapacitated person.  N.J.S. 3B:12-1 seq.; New Jersey Court rule 4:86-1 through 10.

A Plenary or General Guardianship grants to the appointed Guardian full substituted decision making authority over all aspects of an incapacitated person’s life, including matters such as medical decisions, handling legal affairs, managing property and finances, making vocational choices, determining residence and social associations, voting, maintaining a driver’s license, seeking employment, and entering into marriage.  Because the authority of a General Guardian is sweeping, there is a preference in New Jersey to employ limited Guardianship where possible, so that an incapacitated person can retain legal authority to make decisions over as many subject areas as possible, and safe to do so.  Even a General Guardian is expected to consider and take into account expressed preferences of the incapacitated person.  Guardianships are frequently used with respect to persons who are developmentally disabled (once they attain the age of eighteen), those who are cognitively impaired, and for elderly persons with diminishing capacity.  Guardianships are also put in place where minors (under the age of eighteen) have monies or property to be managed, but, given their age, lack the legal authority to do so. 

An alternate protective arrangement is the conservatorship, which is a voluntary arrangement employed by a competent person (the Conservatee) to grant authority to a third-party (the Conservator) to manage his or her property.  New Jersey Court Rule 4:86-11.  Conservatorships are voluntary proceedings where the Conservatee is legally competent, and the legal arrangement cannot be imposed by a Court over the objections of the Conservatee.  If a Conservator is appointed through a Court proceeding, the Court oversees this arrangement and the Conservatee can at any time – providing that he or she is competent, revoke the Conservatorship.  This type of arrangement, while as not as commonly employed as Guardianships, is often appropriate where the Conversatee has limited ability to manage his or her own financial affairs, or acknowledges a difficulty in doing so effectively.  Individuals with cognitive impairments that interfere with their ability to properly handle financial matters, older persons unable to resist undue influence of family or third-parties over their financial affairs, and person suffering from mental illness, or other afflictions that place their financial stability at risk are appropriate candidates for Conservatorship.
 

Both Guardianships and Conservatorships can only be put in place by a Court, and continuing Court supervision follows the initial appointment.  This can provide significant protection to a person who is vulnerable, lacks capacity, or suffers from cognitive limitations.  Many people choose to avoid involving Courts in their personal affairs by executing in advance of any potential infirmity, Durable Powers of Attorney and Medical Advance Directives.

The decision to enter into protective arrangements should be carefully considered, as the arrangement might later be scrutinized by other individuals who feel that the arrangement is not in the best of the interests of the individual who is receiving assistance.  As such, it is often suggested that you consult with an attorney to ensure that the process is fair, and moreover, ensure that the individual receives the best possible assistance.

If you have questions regarding guardianships or conservatorships and would like to discuss your specific case in more detail, please contact me to set up an appointment here in my firm’s Lawrenceville, New Jersey office.

Mr. Schwartz joins host Maiken Scott as they discuss a common issue facing many families after the death of a loved one: do we have to pay bill collectors looking for money after our family member has passed away? Mr. Schwartz discusses special considerations offered after the loss of a spouse, child and parent.

**Updated September 28, 2011 - 8:40 AM** In case you missed last night's edition of Newsworks Tonight with Mr. Schwartz, you can listen to the full program online here.

However, when a case involves non-probate assets, such as life insurance policies and pension proceeds, attorneys fees will not be paid out of these assets as they pass by operation of contract and property law and are outside of the decedent's estate.

In the Matter of the Estate of John Oliva, Jr., Deceased, a case decided by the Superior Court of New Jersey, Appellate Division, on August 25, 2011, the attack was on assets resulting from the decedent's life insurance policy and pension. The Court found that there was no authority for finding that such assets were part of the probate estate available to satisfy an award of counsel fees. In addition, the Court found that there could only be an award of counsel fees against an executrix personally where there was a "gross abuse of trust and confidence".

In general, New Jersey Courts follow the "American Rule" which requires each party to pay their own attorneys fees. While there is an exception in probate matters, that exception is limited and only applies to matters involving assets that are part of the probate estate.

If you have questions regarding the above matter, feel free to contact me here in my firm’s Lawrenceville, New Jersey office to discuss this matter in more detail.  

The son filed a complaint seeking to invalidate his mother's will on the basis that she lacked the testamentary capacity to make the will or that the will was the result of undue influence.  The family history of the parties was one of considerable animosity and extensive litigation. Prior to the mother's death, she found it necessary to seek multiple restraining orders against her son.  At one point, the restraints barred her son from entering the municipality where his mother lived.   In 1993, approximately eighteen years before the mother died, the son and mother executed a settlement agreement which globally resolved more than a dozen pending litigations and resulted in the vacation of all outstanding restraining orders. In the Agreement, the son agreed not to attempt to set aside or contest the mother's will, or make any claim against the mother's estate. The mother agreed to make annual payments to the son for his support which would continue for the rest of the son's life. The mother also agreed to fund the son's psychiatric care up to a set maximum amount per year. The mother agreed to create an inter vivos trust that would be funded upon her death in order to continue to fulfill the obligation to support the son under the Agreement. The son, as of the time of trial, had received in excess of five hundred thousand dollars under the terms of the Agreement. Further, since 1990 the mother had executed ten different wills, all purporting to disinherit the son; the last eight wills executed after the parties’ 1993 Agreement, including the March 21, 2007 Will, all referred to the mother's obligations to support her son as set forth in the Agreement.
 

The agreement also required the mother to make a total of four future visits with her son under the supervision of the son's psychiatrist; two pre-scheduled telephone calls to the son per year at times and intervals to be determined by the mother; to write the son two letters annually, whose timeliness, content and duration shall be totally within the discretion of the mother.  Other than the contact detailed above, the Agreement forbade the son from contacting, attempting to contact or communicate with the mother or any other member of the family without the prior written consent of the specific family member. 
 

To avoid enforcement of the very clear language in the 1993 Settlement Agreement prohibiting Will challenges of precisely the sort initiated by the son in this case, the son first argued that the Settlement Agreement was both procedurally and substantively unconscionable. The Court noted that our legislature has addressed the issue of unconscionability as it pertains to contracts. N.J.S.A. § 12A:2-302 states, "(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result."  The common law doctrine of unconscionability has proven difficult to define and has been rarely invoked undoubtedly because, other than in exceptional cases, it has been largely viewed as grossly interfering with the freedom to contract.  There are very few cases from New Jersey courts examining and defining unconscionability.
 

The son' next claim was that he was at an economic disadvantage when dealing with his mother and that he was required to "take whatever was thrown his way."  It was an undisputed fact that the son was represented by counsel at the time of the 1993 Settlement Agreement and that the parties engaged in multiple negotiations over a period of time exceeding one year. It was also undisputed that there was a lengthy history of litigation between the parties.  In light of the rancorous history of litigation and personal conflict, and also in light of the substantial consideration provided to the son over the years, the Court found nothing troubling about the agreement, either procedurally or substantively, as a matter of law.
 

Lastly, the son argued that he was excused from performance of the contract, because the his mother materially breached the agreement by failing to write him two letters per year as was required by the Settlement Agreement.  The Court noted that in contract law, a ‘material’ breach of contract is a failure to perform the contract that strikes so deeply at the heart of the contract that it renders the agreement irreparably broken and defeats the purpose of making the contract in the first place.  If there is a material breach the other party can simply end the agreement and go to court to try to collect damages caused by the breach.  The Court determined that due to the fact that the mother had total discretion to determine the timing, content, and duration of these letters, and, although there were questions as to just how therapeutic these letters could reasonably be expected to be, or how material they were to the overall agreement, the son's continuing to accept the other benefits of the Agreement in light of this alleged breach led to the conclusion that the son waived his right to use the breach as a defense to nonperformance.
 

The Court also found that the son's claims were also barred by the equitable doctrine of laches in view of his failure to timely act.   While the son claimed that his mother violated the Agreement shortly after it was executed by failing to send him two letters per year, he did not act on this knowledge, choosing instead to sit on his rights until he brought a will contest prohibited by the express terms of the Agreement. The Court found that a period of close to eighteen years without any assertion of his rights under the Agreement constitutes inexcusable delay and that the son was barred by laches.
 

Similarly, the doctrine of equitable estoppel barred the son's challenge to the contract. Equitable estoppel prevents one from rectifying his own grossly negligent mistake at the expense of another who has, without negligence, been misled.  The Court found that the son conducted himself in such a way as to lead all parties to believe the contract was still in force and to allow the son to assert the existence of a material breach negating his own obligations under the contract after all of these years would amount to fraud by conduct and would violate the Court’s equitable responsibilities.
 

The contract signed between the son and mother was deemed to be enforceable and the son was barred from making any claims concerning his mother's will.

The Plaintiffs argued that the Trial Court's finding that the decedent possessed the requisite testamentary capacity to execute a will was not supported by sufficient, credible evidence and rather, "was so far wide of the mark and contrary to competent evidence in the record as to amount to a manifest denial of justice.” The Appellate Division found the findings of the Trial Court on the issues of testamentary capacity and undue influence, though not controlling, were entitled to great weight since the Trial Court had the opportunity of seeing and hearing the witnesses and forming an opinion as to the credibility of their testimony reasonably credible evidence as to offend the interests of justice.
 

As a general principle, New Jersey law requires only a very low degree of mental capacity to execute a will. The gauge of testamentary capacity has been stated to be whether the testator can comprehend the property he/she is about to dispose of; the natural objects of his/her bounty; the meaning of the business in which he/she is engaged; the relation of each of these factors to the others, and the distribution that is made by the will. Testamentary capacity is tested at the time of execution of the will.
 

In any attack upon the validity of a will, there is a legal presumption that the testator was of sound mind and competent when he executed the will. This presumption can only be overcome by clear and convincing evidence. The burden of establishing lack of
testamentary capacity falls upon the party who contests the will being offered for probate.
 

Evaluating the evidence in the aggregate, the Trial Court in this case concluded that Plaintiffs did not satisfy their heavy burden of proving, by clear and convincing evidence, that the decedent lacked testamentary capacity when she executed her will.  The Appellate Division was satisfied that there was sufficient competent and reasonably credible evidence in the record to support the Trial Court's findings.
 

Plaintiffs also contended that the Trial Court's factual findings and legal conclusions with respect to the issue of undue influence were unsupported by the credible evidence adduced at trial and warranted reversal.
 

What constitutes undue influence sufficient to invalidate a will is a question of law.  But whether a will was procured by undue influence is a question of fact for the court, as is the truth or credibility of evidence introduced on such issue and the weight to be given to the evidence.   A will which on its face appears to be validly executed, can be overturned if it is tainted by "undue influence."
 

Undue influence has been defined as a mental, moral, or physical exertion of a kind and quality that destroys the free will of the testator by preventing that person from following the dictates of his or her own mind as it relates to the disposition of assets. 
 

Two elements are required to raise a presumption of undue influence. First, there must be a "confidential relationship" between the testator and the beneficiary. Second, the presence of "additional 'suspicious' circumstances" in combination with such a confidential relationship must exist.  Such circumstances need only be slight.
 

Under normal circumstances, once a presumption of undue influence has been established and the burden of proof is shifted to the proponent of the will, the presumption may be overcome by a preponderance of the evidence.  If, however, the presumption arises from a professional conflict of interest on the part of an attorney, coupled with confidential relationships between a testator and the beneficiary as well as the attorney, the presumption must instead be rebutted by clear and convincing evidence.
 

Notwithstanding the confidential relationship that existed, the Trial Court found no evidence that anyone overpowered the will of the decedent.  The court concluded the defendants had met their burden to overcome the presumption of undue influence by a preponderance of the credible evidence.  The Appellate Court upheld these conclusions as to the claims of undue influence as well as the claims of lack of testamentary intent.
 

Even though the Plaintiff was not successful in proving lack of mental capacity or undue influence, the Trial Court still awarded the payment of counsel fees from the estate.   The Plaintiffs appealed the Trial Court's failure to award the full amount of their counsel fees and the Defendants appealed the award of any counsel fees to Plaintiffs. The Appellate Court rejected both challenges.
 

The decision to award attorneys' fees falls within the discretion of the Trial Judge and, accordingly, is reviewed under an abuse of discretion standard as long as the Trial Judge did not act under a misconception of the applicable law.
 

New Jersey has a strong public policy against the shifting of attorneys fees and costs.  Generally, everyone pays their own counsel fees.  This based upon what is known as the American Rule.  However, there is an exception to this American Rule in certain cases.  One of those exceptions is for payment of counsel fees from an estate in a will contest where probate is granted and it appears that there was reasonable cause for contesting the validity of the will.  Except in a weak or meretricious case, courts will normally allow counsel fees to both proponent and contestant in a will dispute.
 

The Appellate Court upheld the finding of the Trial Court that there was a reasonable basis for the Plaintiffs position even though that basis was not sufficient to set aside the will. Simply put, the Trial Court determined the challenge to the will was reasonable and that the award of some, although not all of the counsel fees, was appropriate.

The MPPAA was therefore enacted and was “designed ‘(1) to protect the interests of participants and beneficiaries in financially distressed multiemployer plans, and (2) to encourage the growth and maintenance of multiemployer plans in order to ensure benefit security to plan participants.’ ”
 

To accomplish these goals, the MPPAA “requires that a withdrawing employer pay its share of the plan's unfunded liability,” which “insures that the financial burden will not be shifted to the remaining employers” in the fund. 
 

The pension fund determines whether withdrawal liability has occurred and in what amount.  A “complete withdrawal ... occurs when an employer-(1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan.” The amount of an employer's withdrawal liability is the employer's proportionate share of the unfunded vested benefits existing at the end of the plan year preceding the plan year in which the employer withdraws.
 

A trustee is empowered to sue a withdrawing employer for its share of the unfunded liability of the plan. If, however, the trustee does not sue, a beneficiary may sue the trustee as well as the party or parties the trustee failed to sue. Consequently, should we discover that the trustees of the merged pension plan at issue failed to sue a withdrawing employer, we would have a cause of action against the trustees and the withdrawing party. 

Treasury regulations implementing the anti-cutback rule make the point explicitly: a pension plan may not deny a protected benefit “directly or indirectly, through the exercise of discretion ....”  Moreover, plan participants are entitled to notice whenever a plan amendment is seriously considered or enacted. 
 

Sometimes a violation of the anti-cutback provision will give rise to a breach of fiduciary duty claim.  According to the Second Circuit, amendments to multi-employer plans which “affect the allocation of a finite asset pool to which each participating employer has contributed” could properly be treated as fiduciary functions.  However, the Third Circuit does not agree and does not make a distinction between single-employer or multi-employer pension plans.
 

Thus, the Third Circuit has adopted the view that ERISA's fiduciary duty provision does not apply to amendment of multiemployer plans. Therefore, absent some other culpable conduct, a violation of ERISA’s anti-cutback provision will not, by itself, support a breach of fiduciary claim in New Jersey.