Ada-Icon
Required

Trustees Liable For Bad Investment Strategy

When a trustee chooses an unwise investment strategy that trustee can be held liable if the trust assets are unnecessarily depleted as a result of the trustee's actions. A recent case in Massachusetts illustrates this principle.

As reported by the Wills, Trusts & Estates Prof Blog in "New Case: The Woodward School for Girls v. City of Quincy," a recent case in Massachusetts held that a trustee who only invests the trust assets in bonds is liable to the trust for loss of trust principle as a result of the trustee not properly taking inflation into account.

In this case it appears the trustee sought investment advice, but ignored that advice. If the trustee had followed the advice, then the trust would have more gains than were realized by the trustee’s insistence on only investing in bonds.

A trustee is required by law to act as a reasonably prudent investor would. Accordingly, the court in this Massachusetts case determined that the trustee was not acting in a prudent matter. Consequently, the trustee will be responsible to pay damages for difference between what the trust actually earned and what it would have earned had the trustee invested as a reasonably prudent investor.

Trustees who are not “professional corporate trustees” face personal risk if they follow their own investment strategies. Non-professional trustees should consider getting advice from lawyers and financial experts about the best way to invest trust assets.

Reference: Wills, Trusts & Estates Prof Blog (August 18, 2014) "New Case: The Woodward School for Girls v. City of Quincy"

Hear From Our Clients
tes-prev
tes-next

“On the threshold of retirement, we finally decided to quit thinking we could self-prepare the requisite documents. We had previously had only a very simple will. We needed the necessary legal (including updated will) & health care docs but didn’t want to deal with the time & complication of legalese. Cindy made the process relatively painless. She took the time to explain and answer questions without trying to upsell services. We were done in 2 meetings plus the reading of emailed drafts. In addition to preparing the documents, Nelson Eldercare will be there when our adult children need advice on executing the plans we’ve put in place.So glad it’s behind us and would recommend Cindy and her helpful staff.”

- Bonnie

Cindy and her company treat their clients like family. Nelson’s offers clear, direct, and honest guidance in planning for your families security and future. No one wants to actively sit down and make these decisions, but Nelson’s makes this process seamless. I was so impressed with their willingness to answer all questions big or small. So glad I made the decision have them help my mom and dad and now me. You can’t go wrong with Nelson’s Elder Care Law.

- Hope

The very best elder law attorney and staff anyone could ever ask for! I have referred a number of clients to Cindy and she never disappoints. She is kind, caring, and extremely thorough in making sure everything is completed as it should be. I highly recommend Cindy for anyone needing lawyer services; she truly goes above and beyond for every client she helps and has had a huge impact in so many peoples’ lives. Thank you, Cindy and staff, for everything that you do- I’m so glad to know you!

- Kerri

I heard Cindy’s presentation at a Senior Luncheon at my church, and was very impressed. She helped my daughter and me understand many aspects of elder law. Josh has also been very helpful in my planning to enter an independent living situation . I have told many friends about them.

- Charlotte

Cindy and the Nelson Elder Care Law team are trustworthy and helpful. They are the experts in elder care law. At Leaf Cremation, we entrust our families to the care of the Nelson team when their services are needed.

- Pierce