Can your trustee be trusted to make the right decisions?
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. Careful consideration should be given in choosing a trustee.
At Idaho Estate Planning, we can help you find the resources you need to put your estate plan together. We have the experience and expertise to help you maintain your options and protect yourself as well as your loved ones now and into the future. Remember, good planning is no accident.