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In 2018 I testified as an expert witness in a local case. The decision for the defendant Trustee was appealed up to the Idaho Supreme Court. In his decision upholding the trial court decision, Justice Bevan quoted the following portion of the trial transcript:
“Masterson testified that Edwin, as trustee, satisfied his duty to report and inform the beneficiaries of the Trust of the expenses and income. Further, Masterson testified that Edwin accounted for the income and expenses of Frizzell’s properties until they were officially distributed to Frizzell during the post-TEDRA period. Masterson also testified that he had no knowledge that Edwin converted or stole monies rightfully due to Frizzell, acted willfully negligent or in bad faith, or acted grossly negligent. Ultimately, Masterson testified that Edwin satisfied his legal responsibilities to the beneficiaries of the Trust. The only criticism Masterson had of Edwin was ‘allowing himself to be bullied by Mr. Frizzell.‘” Donald Craig Frizzell, et al v. Edwin DeYoung, et al, Idaho Supreme Court.
Defendant Trustee was awarded a monetary judgment and attorney fees and costs.
In a recent decision, Judge Edward Nicholas included the following statements in his Final Judgment:
“Mr. Masterson gave the Court a primer on the criteria necessary to establish a fiduciary duty, both express and by implication. His analysis was thorough, objective and well-reasoned – and the Court afforded his testimony great weight.” “Ultimately, this Court agrees with Mr. Masterson.” Bank of America v. Holmes, et al, 2009CA12859, 12th Circuit, Manatee County, Florida.
My testimony in that case addressed the elements necessary for the existence of a trust/fiduciary relationship. Judge Nicholas summarily referred to my reasoning:
“He stated that no fiduciary duty attached for many reasons, including, but not limited to, because the Plaintiff never held title to the asset, because no money ever came under the Plaintiff’s control, because the Bank had no legal interest in the property/asset, and because the parties were simply lender and borrower. Mr. Masterson concluded that no fiduciary duty arose in the relationship between the Plaintiff and the Defendants.”
Mr. Watkins is right on target. If you have fiduciary duties when it comes to investments, being prudent with investment costs is one of your primary responsibilities.
Fiduciaries and The Duty of Prudence: The True Impact of Mutual Fund Fees.
In 3 months private seller financing will come under the control of the Empire, err… actually the Consumer Financial Protection Bureau (CFPB). Congressmen Dodd and Frank in their zeal to protect the public from unscrupulous lenders have burdened every real estate investor who engages in seller financing with new regulations that will ultimately feel like 10 additional gravities weighing upon their investing. If you are not aware of this legislation, it essentially removes the real estate investors’ ability to self-finance the sale of real estate without becoming a licensed mortgage loan originator. Here is how it works.
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Not to sound like a broken record, but selection of a trustee in your estate plan is one of the most important decisions you can make. Here’s a good synopsis of what you should consider if you are thinking about more than one trustee.
As I recall from the myriad statutes I’ve seen over nearly 30 years, there is no requirement that a holographic will be written on paper. Here’s a new twist – when we see the first digital holographic will in Idaho?
An Ohio Judge has allowed the admission of a will that was written with a stylus on a Samsung Tablet. According to the man’s two brothers, the decedent had no paper, and was in the hospital expecting to die. He told one of his brothers how he wanted his estate distributed, and his brother wrote the provisions on the tablet. The decedent then signed the tablet in the presence of his brothers.
In Oklahoma, it is likely that a Judge would rule the same way. Oklahoma recognizes three basic types f wills
1: Nuncupative Wills, which are wills that are dictated to another when a person believes his or her death is imminent while in military service or where the person suffered a mortal trauma on the same day as the will was dictated. The amount of the estate can be no more than $1,000.00 and there must be actually…
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Here is an excellent review of important considerations when choosing a Trustee for your Trust. These considerations also apply when you are choosing a Personal Representative or an Executor.
Personal Injury Plus, or PI+, is a collaboration with a couple of local professionals, Pat Wardian and Dan Brownell. My role is to provide consulting expertise when there is trust solution being considered as part of a personal injury settlement. Check out the website we just set up: www.piplusidaho.com.
Trusts, Obamacare, and the New Tax Act
As pointed out in the article in Forbes, to which I’ve linked in the title of this post, both the 3.8% surcharge on investment income required by Obamacare and the tax increases on capital gains from the recent tax act impact Trusts at a much lower point than individuals. If you are a Trustee, you will now need to be even more intentional about income tax planning with your beneficiaries. Also, since these tax costs encourage Trustees to distribute more to current beneficiaries, Trustees will need to be more intentional about protecting the interests of future beneficiaries.