Opinion 09-85

June 3 - 4, 2009

Digest:         A full or part-time judge may be a compensated trustee of his/her parents’ trusts. A part-time judge may serve as a director of a closely-held family corporation, subject to the Rules Governing Judicial Conduct. A full-time judge may not be a director of any business entity except one engaged solely in investment of the judge’s or his/her family members’ financial resources.

Rules:         22 NYCRR 100.0(I);100.2; 100.2(A); 100.4(A)(1)-(3); 100.4(D)(1)-(5); 100.4(E), (E) (1), (2); 100.6(B)(4); Opinions 09-72; 98-109 [Vol. XVII]; 93-81[Vol. XI].

Opinion:

         A part-time judge’s parents are completing their estate plan and have advised the judge that they will name him/her a trustee of their inter vivos and testamentary trusts. In addition, the judge’s parents have a business that they intend to leave to their other children and the judge believes that his/her parents intend to name him/her a director of their company to serve during their lifetimes and after their deaths. In each case, the judge will be compensated either at the statutory rate or at the rate set forth in the trust document. The judge asks whether he/she may serve as a trustee of his/her parents’s trusts and as a director of his/her parents’ company as either a part-time or a full-time judge.

         A judge must avoid impropriety and its appearance (see 22 NYCRR 100.2) and must always act in a manner to promote public confidence in the judiciary’s integrity and impartiality(see 22 NYCRR 100.2[A]). A judge may engage in extra-judicial activities if they do not (1) cast reasonable doubt on the judge’s capacity to act impartially, (2) detract from the dignity of judicial office, or (3) interfere with the proper performance of judicial duties and are not incompatible with judicial office (see 22 NYCRR 100.4[A][1]-[3]). However, a full-time judge may not be a director of any business entity, subject to certain exceptions not relevant here (see 22 NYCRR 100.4[D][3]), and from being a trustee, except for a trust of his/her family member and for a person, not a member of the judge’s family, with whom the judge has had a longstanding personal relationship of trust and confidence, subject to the Chief Administrative Judge’s approval, and then only if such services will not interfere with the proper performance of judicial duties (see 22 NYCRR 100.4[E][1]). As a fiduciary, including as a trustee, a judge is subject to the same restrictions on financial activities that apply to him/her personally (see 22 NYCRR 100.4[D] [1],[2],[4], [5];100.4[E][2]).

         As the inquiring judge is currently part-time, the Rules Governing Judicial Conduct (Rules) do not prohibit serving as trustee (see 22 NYCRR 100.4[E]; Opinion 98-109 [Vol. XVII]), subject to the same restrictions on financial activities in that capacity as apply to him/her personally (see 22 NYCRR 100.4[D] [1],[2],[4], [5];100.4[E][2]). Further, the Rules do not prohibit the judge from receiving compensation for doing so either as provided by statute or by the trust documents. Similarly, as a part-time judge, he/she is not prohibited from serving as a director of his/her parents’ company and receiving compensation (see 22 NYCRR 100.4[D][3][b]; 100.6[B][4]), assuming the directorship will not (1) cast reasonable doubt on his/her capacity to act impartially, (2) detract from the dignity of judicial office, or (3) interfere with the proper performance of judicial duties and is not incompatible with judicial office (see 22 NYCRR 100.4[A][1]-[3]). In particular, a judge’s financial and business dealing cannot appear to exploit his/her judicial position; nor involve the judge with a business, entity or activity that ordinarily will come before the judge; or cannot involve the judge in frequent transactions or continuing business relationships with lawyers or other persons likely to come before the the judge’s court (see 22 NYCRR 100.4[D][1][a]-[c]).

         If he/she becomes a full-time judge, he/she may continue as his/her parents’ trustee and receive compensation (see 22 NYCRR 100.4[E][1]; Opinions 09-72; 93-81[Vol. XI]), again subject to the same financial restrictions in that capacity as apply to him/her personally (see 22 NYCRR 100.4[D] [1],[2],[4], [5];100.4[E][2]). And, since the judge will serve trusts of his/her parents, there is no need to request the Chief Administrative Judge’s approval [see 22 NYCRR 100.0[I]; 100.4[E][1]). However, he/she may not be a director of his/her parents’ company unless the company is engaged solely in investing the judge’s family’s resources (see 22 NYCRR 100.4[D][3]).