Ada-Icon
Required

When Trustees Work For Themselves

Trustees are required to act in the best interests of the trust and its beneficiaries. However, sometimes trustees are tempted to make decisions about a trust’s finances that benefit the trustees financial institution more than the beneficiaries.

When Eli Lilly, Jr. passed away, he directed that 10% of his estate be left in trust to an Indianapolis church, The Christ Church Cathedral. As reported in the International Business Times in an article titled Christ Church vs. JPMorgan: Bank Allegedly Mismanaged Millions, Lilly actually left three separate trusts for the church. Each trust was to be handled by a different bank.

The article does not say how, but at least one of the trusts eventually came under the management of JP Morgan. The church alleges that the bank invested trust assets in risky financial ventures controlled by the bank. It further alleges that the bank received more value out of these investments than the trust. The church claims a loss of $13 million.

This case highlights an inherent risk when trustees are financial firms that sell investment products. The trustees certainly have a financial interest in channeling trust assets into their own products, but that might not always be in the best interests of the trusts. Rival financial firms might have more appropriate investment products for the trust.

Trustees are supposed to act as reasonably prudent investors. Accordingly, they should be investing trust assets wisely and not just in the products they sell.

That is not to say all financial firms will make poor trustees. However, it is something to consider when designating a trustee. It is not always a good idea to choose a trustee who might have an interest in using trust assets to further his or her own firm.  An elder law attorney can assist you with these and other difficult decisions you may have about trusts.

Reference: International Business Times (August 13, 2014) Christ Church vs. JPMorgan: Bank Allegedly Mismanaged Millions

 

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