bank as trustee

[24682468]

A relative that recently passed away created
a trust. The trust will soon be in the hands of
Legacy Portfolio Management (a bank).

Can the current beneficiary demand that the
trust funds be kept in a risk-free investment
(ie. a savings account)? OR does the bank have
the legal right to invest any way they want?

-Stephen

[jcsmjd]

Beneficiaries are incompetent in regard to trusts. However, have you seen the Trust? Is their a Director or a Trustee(ship)?

[24682468]

The trustee was originally a lawyer. She doesn't
want the position so she has given it over to
Legacy Portfolio Management.

All that is wanted is for them to sit on the trust,
not invest in real estate in Brazil or the Tehran
stock exchange. I don't know what LPM is going
to do or what they can be forced to do.

(thanks for replying)

-Stephen

[jcsmjd]

Usually Trustees do NOT have the authority to assign a new Tru a stee, that is the Authority of the Director. In other words the original trustee can resign but usually a new or substitute trustee is placed by Direction.

See any Foreclosure proceeding in just about any STATE. Notice prior to commencement of any special proceeding a the original trustee on the deed of trust resigns and a substitute trustee is placed by direction. This is usually a great lead to upcomming foreclosures by the way. The suckers out there are usually weeks behind this filing, but I digress.

I would challenge the original trustee's ability to assign a new trustee. You need to get a copy of the trust. However, if you are a beneficiary, you will probably have zero standing.

[24682468]

You wrote: Usually Trustees do NOT have the authority to assign a new Tru a stee, that is the Authority of the Director.

The trust says: If the aforenamed successor
trustee fails or ceases to serve, she may appoint
another successsor trustee;...

{I don't know what the term 'director' means.}

Anyway the lawyer that was brought in to help
understand all this wanted to be the trustee.
(That is, a new lawyer not associated with
the trust or knowing anyone involved.)
A letter of ascent (sp.?) was sent to the beneficiaries
so all could sign, and this new lawyer could be the
trustee. One beneficiary would not sign.

After this...

The original lawyer/trustee of the trust made
this bank trustee and washed her hands of
everything.

So do you think this bank can invest in any way it
wants? The executor of the will is the only current
beneficiary and will be meeting with the financial
planners at Legacy soon.

(The lawyer brought in to help, has not said that this
bank becoming the trustee is illegal.)


-Stephen

[jcsmjd]

Absent liability, without recourse, and no value assured and for educational purposes only:

I do not know the terms of the trust. However, if the Trust allows the Trustee unlimited authority, absent direction from a third party(ies), then yes, the trustee can invest in whatever it wants for the benefit of the beneficiaries.

Usually, trusts limit the powers of a trustee per the tenets of the trust. You need to read the trust very carefully. A trust holding property by Trustee (legal Title) and Beneficiary (equitable Title) is sufficient but can be problematic as to duties and accountability. A Director (third party) is usually desireable and a trustee(ship) is usually desireable as there can be checks and balances. Emotions can be more easily managed.

However, just as a house cannot be sold unless ALL in title agree such is the same with beneficiaries. ALL must agree. The Trustee is bound and CANNOT simply resign unless the trust allows for that event.

If you own 99% of a house and I own in trust 1% of the same house, the house cannot be sold unless the Trustee of the trust I am involved in agrees to the sale. You might want to read the trust a bit more carefully, as the original lawyer might not have been able to just resign. But, then again, I have not seen the trust.

Good luck.

[David Merrill]

Without a new written indenture, here is the trust - the legal name.


(attached)


Regards,

David Merrill.