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Re: ethics concern with trust

Posted: Thu Sep 17, 2020 5:44 pm
by MerriebytheSea
neverpanic wrote: Thu Sep 17, 2020 7:55 am
I respect your pursuit of justice, but sometimes, it's better to take things into our own hands when seeking a practical result. If you go the "legal" route of restoring the $25,000 to S's children, the primary beneficiaries will be the attorneys, the accountants, and the county.
Thank you. Your point is well-taken. I have come to that same conclusion. The dialog on this site has been helpful, because it leaves me with the confidence that I explored options thoroughly and have arrived at the best possible course of action.

I thank all of you who have weighted in ..... I have certainly learned some things though this processes, which adds to what I will file away for my own planning , some of which is:

Consider pros and cons of trusts. Consider that things can go wrong, due to any of the players, not just bickering beneficiaries. Trusts tend to be written to protect trustees, so be very careful in choosing, especially non-professionals. The trust attny may have little to no idea as to what trustees are doing. Trustees can cause serious problems out of ignorance or ineptness. Brokers should not be managing assets without any oversight. Brokers should not be operating as if they were the trusee. If there seems to be irregularities and a lack of transparency ..... try to arrange for a CPA to review work ASAP at trust expense. That is the one thing that could have saved a measure of frustration and let the broker know he was not operating without oversight.

All you professional are welcome to critique or add to the above. In closing I want to say that I don't think it takes ill intent for things to go very wrong. It is a good idea to check and verify, even of professionals and experts you would like to trust.

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 5:53 pm
by neverpanic
OP - Do you have any idea of about how much Dad's estate was worth?

All families are different, but I think it's important for at least 1-2 beneficiaries to have some idea of the estate size which serves as a check on the trustee or successors.

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 6:14 pm
by MerriebytheSea
bsteiner wrote: Thu Sep 17, 2020 9:52 am

When doing your estate planning, your choice of executors and trustees is one of the most important things to consider. A poor Will or trust agreement with good trustees is often better than a good Will or trust agreement with poor trustees.

What's a Sub-Trust?
The sub-trust: perhaps the wrong word but under the main Trust, a separate trust was set up for Dad's last wife, the remaining assets of which were to go back to his beneficiaries upon her passing.

Your point about a poor trust agreement with good trustees vs a good trust agreement with poor trustees is worth pondering.

It is my understanding that this trust attny is very expensive and supposed to be one of the best in the area. I have heard that he teaches other attnys in this area and lobbies against laws to require disclosure to beneficiaries. His expertise did not seem to offer much advantage to the beneficiaries because his office made a number off oopps thanks for pointing that out,redos. I do not think he was dishonest - he's a big shot with too many other fish to fry to pay much attention. I get that, but were I he, I would want to make sure, for my high fees, that my staff wasn't blundering by appointing wrong trustees, leaving out beneficiaries, falsely notifying that the trust had closed. He seemed to have no clue that the trustee was asleep at the wheel and the broker was operating without oversight - but as I understand it that was not his job.

I don't know about a poor trust agreement, but a middle of the road, earnest and conscientious attny trying to build his reputation working with a professional trustee would have probably served my Dad better.

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 7:05 pm
by neverpanic
MerriebytheSea wrote: Thu Sep 17, 2020 6:14 pm
bsteiner wrote: Thu Sep 17, 2020 9:52 am What's a Sub-Trust?
The sub-trust: perhaps the wrong word but under the main Trust, a separate trust was set up for Dad's last wife, the remaining assets of which were to go back to his beneficiaries upon her passing.
Wouldn't a "sub-trust" just be a separate trust with trust #1 as the POD/TOD when the only living beneficiary of trust #2 passed?

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 8:06 pm
by MerriebytheSea
celia wrote: Thu Sep 17, 2020 5:27 pm
I don't understand the last line. How does a release on the father's trust (agreeing to the final distribution) impact the wife's trustee, other than that trustee possibly knowing about the $25K ....
Both trustees are protected by the trust attny. Trusts protect trustees.

When Dad became very ill, the main trustee sent notice that she was activating her duties and would be sending annual reports (required by law). She met with the estate attorney and the stonewalling began. At that time, no one was asking questions or raising concerns. The trustee refused to provide annual statements despite the law and her written offer to do so; she ignored and resisted requests for accounting; she refused later requests to provide trust tax filings. It was as if they were operating under the philosophy that beneficiaries who are kept in the dark, have nothing nothing to question. Perhaps that is the methodology for avoiding conflicts and protecting trustees. This is not just loose conjecture. We hired an attny to try and compel annual reports, paid out thousands and never got them. We were told that an aggressive trust attny can stonewall and make it very expensive to go to compel (legally required) disclosure by resisting, short of a court order.

As for the the wife's trustee - she is also protected by the estate attny. She started out sending accounting then began stonewalling as soon as she met with the estate attny. (No beneficiaries were not asking questions or making trouble) I don't know that this trustee is hiding anything. She is not responsible for the missing $25K and I have no reason to doubt her competence. From what I surmise she is just enjoying the protection of a very aggressive attny who insists on a global release (not required by the trust or the law) on threat of hijacking assets and taking beneficiaries to court, making it "very expensive" (their words) for beneficiaries. Since his rates are so high, beneficiaries yield to his threat.

From my perspective, this attny tunnels on his duty to protect the trustee. That combined with his aggressiveness, sets up a situation where beneficiaries forfeit legal protections because it costs too much to assert them, especially since they are faced with the threat of paying for both sides of a hearing. I apologize to any in the profession who may think I am too harsh. I try to give everyone the benefit of doubt, but that seems to be exactly what was going on. My attny friend seems to concur.

So for those who have highly competent, highly conscientious, highly devoted trustee friends and contentions, infighting beneficiaries who need to be protected from their own lack of judgment, this may be the plan for you. But keep in mind, trustees can quit, get ill or get replaced. My children/grandchildren are not perfect but having gone through this experience, I hesitate to construct a situation where they could be easily bullied out of the protections offered to them under the law. I have not given up on trusts, but I would be very reluctant to appoint a non-professional.

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 8:14 pm
by MerriebytheSea
neverpanic wrote: Thu Sep 17, 2020 7:05 pm
Wouldn't a "sub-trust" just be a separate trust with trust #1 as the POD/TOD when the only living beneficiary of trust #2 passed?
No, it was described within the trust.

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 9:33 pm
by MerriebytheSea
Lee_WSP wrote: Thu Sep 17, 2020 5:23 pm
That's fine, but how would you have structured it differently? Sounds like the broker is the worst offender. But your dad trusted him.
You are right. He was the worst offender. Dad had confidence in this broker's investment skills and perhaps that trustee shared that confidence. But investment skills are one thing and trusteeship is another. In my opinion the trustee neglected her oversight duties.

My distrust of the broker grew, for good reason - his propensity for untruthfulness and manipulation. He was a real charmer with the knack of making people feel lucky as he took full advantage. Fortunately, I had enough sense to seek out the right kinds of advice, such as learning from the contributors to this site.

My biggest regret is that I did not hire a CPA and compel an audit.

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 10:28 pm
by celia
MerriebytheSea wrote: Thu Sep 17, 2020 8:06 pm Both trustees are protected by the trust attny. Trusts protect trustees.
I don't know what state you are in but this doesn't sound right. The trust attorney may have told you this, but maybe another pro can weigh in on this. A trust attorney can help the grantor create the trust and advise the grantor. He/she can also advise a trustee as to their roles and applicable laws (annual accounting, reporting), tax implications, state-prescribed waiting periods, etc. But he is NOT THERE TO PROTECT the trustee, other than to watch that they don't run afoul of the law. A different trust attorney would then be needed to look after the best interests of the beneficiaries. I would bet that things would have been very different if this particular attorney represented the beneficiaries and the trustees used someone else.

Trusts are also not there to protect the trustees, They are there to spell out the wishes of the grantor, in effect, protecting the grantor's wishes as much as can be done when the grantor is not there to participate.
When Dad became very ill, the main trustee sent notice that she was activating her duties and would be sending annual reports (required by law). She met with the estate attorney and the stonewalling began. At that time, no one was asking questions or raising concerns. The trustee refused to provide annual statements despite the law and her written offer to do so; she ignored and resisted requests for accounting; she refused later requests to provide trust tax filings. It was as if they were operating under the philosophy that beneficiaries who are kept in the dark, have nothing nothing to question. Perhaps that is the methodology for avoiding conflicts and protecting trustees. This is not just loose conjecture. We hired an attny to try and compel annual reports, paid out thousands and never got them. We were told that an aggressive trust attny can stonewall and make it very expensive to go to compel (legally required) disclosure by resisting, short of a court order.

As for the the wife's trustee - she is also protected by the estate attny. She started out sending accounting then began stonewalling as soon as she met with the estate attny. (No beneficiaries were not asking questions or making trouble) I don't know that this trustee is hiding anything. She is not responsible for the missing $25K and I have no reason to doubt her competence. From what I surmise she is just enjoying the protection of a very aggressive attny who insists on a global release (not required by the trust or the law) on threat of hijacking assets and taking beneficiaries to court, making it "very expensive" (their words) for beneficiaries. Since his rates are so high, beneficiaries yield to his threat.

From my perspective, this attny tunnels on his duty to protect the trustee. That combined with his aggressiveness, sets up a situation where beneficiaries forfeit legal protections because it costs too much to assert them, especially since they are faced with the threat of paying for both sides of a hearing.
This can be the core of your complaint to the state board that reviews attorneys in your state
I have heard that he teaches other attnys in this area and lobbies against laws to require disclosure to beneficiaries
and this shows his intent to break the current laws. This is not a matter of what his wishes and opinions are, but what the law currently is, that he thinks doesn't apply to him.

I would strongly suggest that he be reported, not for you to get anything changed in your situation, but to prevent this type of thing happening again and again. You might also search the licensing board for attorneys in your state to see if other complaints have been filed against him.


As far as your thoughts on whether to get a trust or not, I think they do spell out the grantor's intent rather well instead of having an executor (and courts) having to make every decision. After you specify your desired trustees, include a clause that if the majority of beneficiaries think the trustee is not doing their job in a timely manner, they can appoint someone else. It doesn't have to be just that the trustee isn't doing a good job, but maybe their family responsibilities, their health, job, or other things don't leave them sufficient time to be a trustee. There's no shame in that and not everyone is willing to be a trustee. You can also leave your trustee written directions that include a list of recommended estate lawyers to use and who NOT to use (if you update it every 10 years or so). And be sure your trust requires annual accounting to the beneficiaries. (After all the "grantor" of your trust desires that, right? :beer )

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 11:03 pm
by FoolStreet
MerriebytheSea wrote: Thu Sep 17, 2020 8:06 pm
celia wrote: Thu Sep 17, 2020 5:27 pm
I don't understand the last line. How does a release on the father's trust (agreeing to the final distribution) impact the wife's trustee, other than that trustee possibly knowing about the $25K ....
Both trustees are protected by the trust attny. Trusts protect trustees.

When Dad became very ill, the main trustee sent notice that she was activating her duties and would be sending annual reports (required by law). She met with the estate attorney and the stonewalling began. At that time, no one was asking questions or raising concerns. The trustee refused to provide annual statements despite the law and her written offer to do so; she ignored and resisted requests for accounting; she refused later requests to provide trust tax filings. It was as if they were operating under the philosophy that beneficiaries who are kept in the dark, have nothing nothing to question. Perhaps that is the methodology for avoiding conflicts and protecting trustees. This is not just loose conjecture. We hired an attny to try and compel annual reports, paid out thousands and never got them. We were told that an aggressive trust attny can stonewall and make it very expensive to go to compel (legally required) disclosure by resisting, short of a court order.

As for the the wife's trustee - she is also protected by the estate attny. She started out sending accounting then began stonewalling as soon as she met with the estate attny. (No beneficiaries were not asking questions or making trouble) I don't know that this trustee is hiding anything. She is not responsible for the missing $25K and I have no reason to doubt her competence. From what I surmise she is just enjoying the protection of a very aggressive attny who insists on a global release (not required by the trust or the law) on threat of hijacking assets and taking beneficiaries to court, making it "very expensive" (their words) for beneficiaries. Since his rates are so high, beneficiaries yield to his threat.

From my perspective, this attny tunnels on his duty to protect the trustee. That combined with his aggressiveness, sets up a situation where beneficiaries forfeit legal protections because it costs too much to assert them, especially since they are faced with the threat of paying for both sides of a hearing. I apologize to any in the profession who may think I am too harsh. I try to give everyone the benefit of doubt, but that seems to be exactly what was going on. My attny friend seems to concur.

So for those who have highly competent, highly conscientious, highly devoted trustee friends and contentions, infighting beneficiaries who need to be protected from their own lack of judgment, this may be the plan for you. But keep in mind, trustees can quit, get ill or get replaced. My children/grandchildren are not perfect but having gone through this experience, I hesitate to construct a situation where they could be easily bullied out of the protections offered to them under the law. I have not given up on trusts, but I would be very reluctant to appoint a non-professional.
Bogleheads, is there a lesson learned that loved ones and beneficiaries should more actively ask for copies of the trust documents and accounting? Or is it better to mind ones own business during tough times like these? Or, “it depends?” I’m asking in general. So many times things are handled well without issue, then every once in a while we hear horror stories, so I don’t know what to think.

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 11:11 pm
by Lee_WSP
celia wrote: Thu Sep 17, 2020 10:28 pm
MerriebytheSea wrote: Thu Sep 17, 2020 8:06 pm Both trustees are protected by the trust attny. Trusts protect trustees.
I don't know what state you are in but this doesn't sound right. The trust attorney may have told you this, but maybe another pro can weigh in on this.
The trustee may have retained the trust attorney either in a personal capacity or acting for the trust. In which case the trust and by extension the trustee would be the attorney's client and the trust attorney has no duty to OP. Either way, the attorney does not have an attorney client with OP unless OP contracted with the attorney or the attorney made it sound as though an attorney client relationship was formed and OP was reasonable in believing so.

Bar complaints should not be filed willy nilly. They are very serious accusations and frivolous accusations tie up resources and increase costs for everyone.

Re: ethics concern with trust

Posted: Thu Sep 17, 2020 11:31 pm
by FoolStreet
Lee_WSP wrote: Thu Sep 17, 2020 11:11 pm
celia wrote: Thu Sep 17, 2020 10:28 pm
MerriebytheSea wrote: Thu Sep 17, 2020 8:06 pm Both trustees are protected by the trust attny. Trusts protect trustees.
I don't know what state you are in but this doesn't sound right. The trust attorney may have told you this, but maybe another pro can weigh in on this.
The trustee may have retained the trust attorney either in a personal capacity or acting for the trust. In which case the trust and by extension the trustee would be the attorney's client and the trust attorney has no duty to OP. Either way, the attorney does not have an attorney client with OP unless OP contracted with the attorney or the attorney made it sound as though an attorney client relationship was formed and OP was reasonable in believing so.

Bar complaints should not be filed willy nilly. They are very serious accusations and frivolous accusations tie up resources and increase costs for everyone.
But if the attorney was retained for purposes related to managing the trust, have some duties to the beneficiary of the trust? Or said another way, should the beneficiary of a trust expect the attorney to respond to the beneficiary and/or share copies of the trust or other trust-related info?

Re: ethics concern with trust

Posted: Fri Sep 18, 2020 12:05 am
by Lee_WSP
FoolStreet wrote: Thu Sep 17, 2020 11:31 pm
But if the attorney was retained for purposes related to managing the trust, have some duties to the beneficiary of the trust?
The beneficiaries are not the trust and not the client; so, no.
Or said another way, should the beneficiary of a trust expect the attorney to respond to the beneficiary and/or share copies of the trust or other trust-related info?
Different issue. The attorney is expected to maintain confidentiality of the client. If the client authorizes or instructs the release, yes. Otherwise, no.

The trust document itself is a different issue. Presumably the trust authorizes it's release to the beneficiaries unless expressly prohibited for some reason. That said, the trustee should be under an obligation to do so. The trustee would then instruct the attorney to release the information.



This is all assuming the trustee retained the attorney. The attorney's client is actually the testator (dead father) unless otherwise retained by another party.

Re: ethics concern with trust

Posted: Fri Sep 18, 2020 12:20 am
by FoolStreet
Lee_WSP wrote: Fri Sep 18, 2020 12:05 am
FoolStreet wrote: Thu Sep 17, 2020 11:31 pm
But if the attorney was retained for purposes related to managing the trust, have some duties to the beneficiary of the trust?
The beneficiaries are not the trust; so, no.
Or said another way, should the beneficiary of a trust expect the attorney to respond to the beneficiary and/or share copies of the trust or other trust-related info?
Different issue. The attorney is expected to maintain confidentiality of the client. If the client authorizes or instructs the release, yes. Otherwise, no.

The trust document itself is a different issue. Presumably the trust authorizes it's release to the beneficiaries unless expressly prohibited for some reason. That said, the trustee should be under an obligation to do so. The trustee would then instruct the attorney to release the information.



This is all assuming the trust retained the attorney. The attorney's client is actually the testator (dead father) unless otherwise retained by another party.
Thanks for breaking this down. So, the original attorney who prepared the testator's (father's) trust would have knowledge of whether the trust authorizes or prohibits its release to the beneficiaries. Are these 3 options correct:

1. If the original attorney was retained by the trustee, then the attorney would advise this to the trustee, and the beneficiary would be at the mercy of the trustee as to whether the trustee would release the trust details to the beneficiary.

1a. If the original attorney was retained by the trustee and the trust did not prohibit release, but the trustee was blocking it's releases -- then the beneficiary could ask their own retained counsel to contact the original attorney and request the release. At which point the original attorney would advise their client, the trustee, on whether to do so, or how to fight it. I presume that a clear request from Beneficiary legal to Trustee legal has a respectable chance of breaking the log jam, and if not, then we know we are dealing with a real situation.

2. If the original attorney was not retained by the trustee, could the beneficiary retain that original attorney and ask them to share the trust details, which they probably have on file? If the trust authorizes it's release to the beneficiaries, would the attorney do so directly, even if it bypassed the trustee?

Re: ethics concern with trust

Posted: Fri Sep 18, 2020 12:33 am
by Lee_WSP
FoolStreet wrote: Fri Sep 18, 2020 12:20 am
Lee_WSP wrote: Fri Sep 18, 2020 12:05 am
FoolStreet wrote: Thu Sep 17, 2020 11:31 pm
But if the attorney was retained for purposes related to managing the trust, have some duties to the beneficiary of the trust?
The beneficiaries are not the trust; so, no.
Or said another way, should the beneficiary of a trust expect the attorney to respond to the beneficiary and/or share copies of the trust or other trust-related info?
Different issue. The attorney is expected to maintain confidentiality of the client. If the client authorizes or instructs the release, yes. Otherwise, no.

The trust document itself is a different issue. Presumably the trust authorizes it's release to the beneficiaries unless expressly prohibited for some reason. That said, the trustee should be under an obligation to do so. The trustee would then instruct the attorney to release the information.



This is all assuming the trust retained the attorney. The attorney's client is actually the testator (dead father) unless otherwise retained by another party.
Thanks for breaking this down. So, the original attorney who prepared the testator's (father's) trust would have knowledge of whether the trust authorizes or prohibits its release to the beneficiaries. Are these 3 options correct:

1. If the original attorney was retained by the trustee, then the attorney would advise this to the trustee, and the beneficiary would be at the mercy of the trustee as to whether the trustee would release the trust details to the beneficiary.

1a. If the original attorney was retained by the trustee and the trust did not prohibit release, but the trustee was blocking it's releases -- then the beneficiary could ask their own retained counsel to contact the original attorney and request the release. At which point the original attorney would advise their client, the trustee, on whether to do so, or how to fight it. I presume that a clear request from Beneficiary legal to Trustee legal has a respectable chance of breaking the log jam, and if not, then we know we are dealing with a real situation.

2. If the original attorney was not retained by the trustee, could the beneficiary retain that original attorney and ask them to share the trust details, which they probably have on file? If the trust authorizes it's release to the beneficiaries, would the attorney do so directly, even if it bypassed the trustee?
This article may be insightful

https://www.mondaq.com/trusts/280402/be ... -documents

1. Beneficiaries are pretty much at the mercy of the trustee. That's how the trust works. The settlor does not trust beneficiaries with the property. It is what it is.

2. No. Hard no. Confidentiality does not die with the client.

Re: ethics concern with trust

Posted: Fri Sep 18, 2020 6:39 am
by Freetime76
Lee_WSP wrote: Wed Sep 16, 2020 11:31 pm
MerriebytheSea wrote: Wed Sep 16, 2020 7:59 pm Perhaps $25K seems petty to many. As you point out, it can disappear quickly when paying out professional fees, but for many families it is still a great deal of money.
Its not petty, but if you pursue this, the only winners are the lawyers litigating this frivolous lawsuit and all the beneficiaries will be out at least 25,000 if not owing on top of that. And all for what? Seriously, for what? Who will benefit if all is "made right"? Serious question, because i don't see it. Negligent people will get their comeuppance, but that's it.

Edit:
Also, I am failing to see what the trust attorney did wrong. He's not even involved in the administration of the trust, or at least they typically aren't.
OP: (I can’t believe they kept forgetting the grandkids)

...previous experience auditing tells me that if an audit “pulled the thread on this sweater”, it would reveal many other problems beyond the 25 K. You already pointed out questions on the transaction statement you were able to view.

I suggest considering:
1. Can you afford a protracted, irritating, and convoluted battle over this? (Financially and in terms of your own life commitments and desires.)

2. Are you doing this based on principle (I.e. to punish or achieve some retribution)? or is it for tangible benefit to someone. Benefit need not be monetary (the 25K or any other misplaced or mismanaged dollars or errors), such as benefit to other clients of this broker? (Do you think this is the only instance, or a mode of doing business, and do you care?)

3. The minimum effective response (for you) is what I would recommend pursuing. What is the least you can do and still sleep at night. Do the answers above warrant sinking your resources (time, dollars, energy) into, and if so, how much?

-If you want to Go After them, get an attorney that you don’t even like (the pit bull kind :shock: who is slightly scary...only half-kidding) and go after them. Get a legal strategy from (your) new attorney legal expert, and find what to expect for possible outcomes.

And don’t sign that global release.

Two examples,of high and low response (for your entertainment):
High response - “A friend” had a 10 year battle after someone stole her company clients, as she puts it, but she won. Won about $10 M (back) and spent nearly that as well, and totally worth it because what they did was wrong (her words) :D Implacable, indeed.

Low response - do not discount the impact of a strategic low reponse!
“A friend” had a problem with an 8M/yr company who repeatedly worked wthe system with employee layoffs and much shenanigans, with many immigrants employed who did not always know their rights.
Two precipitating events: A safety incident occurred and a valued employee quit after a person nearly died (painting company, summer employee on a football scholarship dangling off a steep slate roof). And the company sent out a marketing flyer, including to employee families, touting how many 1000s of hours of employee time were donated by the company to charity activities...inside info was that the employees were not paid even though volunteering was mandatory.
The response was a series of phone calls and one letter, less than 30 minutes each (OSHA, the Labor Board, state unemployment agency), and a letter to the IRS containing the marketing flyer and a quick math estimate suggesting financials impacted.
Lo’ and behold, justice :wink: - suits showed up, and the owner spent days locked in a room with papers flying in and out, and a bunch of money was paid to correct what was found. The whole company changed employee practices for the better in quantifiable ways, according to people who still worked there. Victory!

Re: ethics concern with trust

Posted: Fri Sep 18, 2020 10:53 am
by logicteach
Contact the Board of Bar Overseers in the appropriate state and file a complaint. Then decide about legal action although it sounds like it may end up costing more than it's worth. I don't know what I would do in that case. It looks like you have one big legal mess; I'm so sorry! I don't know anything much about the law, but I worked for MA BBO one summer doing grad school and that's the organization you want in any state.

Your post said you had an ethical dilemma. This looks more like a legal decision than an ethical one. If I'm wrong, could you say more about the ethical issue you're facing?

Re: ethics concern with trust

Posted: Fri Sep 18, 2020 10:54 am
by logicteach
Contact the Board of Bar Overseers in the appropriate state and file a complaint. Then decide about legal action although it sounds like it may end up costing more than it's worth. I don't know what I would do in that case. It looks like you have one big legal mess; I'm so sorry! I don't know anything much about the law, but I worked for MA BBO one summer doing grad school and that's the organization you want in any state.

Your post said you had an ethical dilemma. This looks more like a legal decision than an ethical one. If I'm wrong, could you say more about the ethical issue you're facing?

Re: ethics concern with trust

Posted: Fri Sep 18, 2020 12:41 pm
by neverpanic
logicteach wrote: Fri Sep 18, 2020 10:53 am Your post said you had an ethical dilemma. This looks more like a legal decision than an ethical one. If I'm wrong, could you say more about the ethical issue you're facing?
Did the attorney and broker act ethically?

Re: ethics concern with trust

Posted: Fri Sep 18, 2020 1:33 pm
by MerriebytheSea
logicteach wrote: Fri Sep 18, 2020 10:54 am
Your post said you had an ethical dilemma. This looks more like a legal decision than an ethical one. If I'm wrong, could you say more about the ethical issue you're facing?
There have been several questions about my motive, asking if I wanted to punish people who were sloppy, unethical or worse. No my basic motive, or reason for starting this thread was the desire to reimburse the money that had been misdirected. I did share concerns about signing a global release because there had been so many errors and irregularities. I am not against reporting people to appropriate agencies when I am firmly convinced of gross wrongdoing, but I am not a person who is resentful, quick to report or eager to have people punished.

Why I though of it as an Ethics Issue
: I did not feel right about us (the trust which ends up to be beneficiaries of the trust) keeping the 25K, which was not rightfully ours. The broker's delayed plan to pay it back had slipped the debt past the statue of limitations so there was no obligation or interest on the part of the trust to pay it back. The family of my stepmother never knew about it and there seemed to be no easy way to get 16 beneficiaries to pay it back without creating a lot of expense and drama.

I have come to the conclusion that the trouble and expense of trying to wakes this sleeping dog would exceed the intended good.

Re: ethics concern with trust

Posted: Wed Sep 30, 2020 6:20 pm
by FoolStreet
Lee_WSP wrote: Fri Sep 18, 2020 12:33 am
FoolStreet wrote: Fri Sep 18, 2020 12:20 am
Lee_WSP wrote: Fri Sep 18, 2020 12:05 am
FoolStreet wrote: Thu Sep 17, 2020 11:31 pm
But if the attorney was retained for purposes related to managing the trust, have some duties to the beneficiary of the trust?
The beneficiaries are not the trust; so, no.
Or said another way, should the beneficiary of a trust expect the attorney to respond to the beneficiary and/or share copies of the trust or other trust-related info?
Different issue. The attorney is expected to maintain confidentiality of the client. If the client authorizes or instructs the release, yes. Otherwise, no.

The trust document itself is a different issue. Presumably the trust authorizes it's release to the beneficiaries unless expressly prohibited for some reason. That said, the trustee should be under an obligation to do so. The trustee would then instruct the attorney to release the information.



This is all assuming the trust retained the attorney. The attorney's client is actually the testator (dead father) unless otherwise retained by another party.
Thanks for breaking this down. So, the original attorney who prepared the testator's (father's) trust would have knowledge of whether the trust authorizes or prohibits its release to the beneficiaries. Are these 3 options correct:

1. If the original attorney was retained by the trustee, then the attorney would advise this to the trustee, and the beneficiary would be at the mercy of the trustee as to whether the trustee would release the trust details to the beneficiary.

1a. If the original attorney was retained by the trustee and the trust did not prohibit release, but the trustee was blocking it's releases -- then the beneficiary could ask their own retained counsel to contact the original attorney and request the release. At which point the original attorney would advise their client, the trustee, on whether to do so, or how to fight it. I presume that a clear request from Beneficiary legal to Trustee legal has a respectable chance of breaking the log jam, and if not, then we know we are dealing with a real situation.

2. If the original attorney was not retained by the trustee, could the beneficiary retain that original attorney and ask them to share the trust details, which they probably have on file? If the trust authorizes it's release to the beneficiaries, would the attorney do so directly, even if it bypassed the trustee?
This article may be insightful

https://www.mondaq.com/trusts/280402/be ... -documents

1. Beneficiaries are pretty much at the mercy of the trustee. That's how the trust works. The settlor does not trust beneficiaries with the property. It is what it is.

2. No. Hard no. Confidentiality does not die with the client.
Thanks for the link. Seems like a/b trusts after a spouse passes are hard for the beneficiaries to track.

Re: ethics concern with trust

Posted: Wed Dec 02, 2020 2:59 pm
by FoolStreet
Lee_WSP wrote: Fri Sep 18, 2020 12:33 am
FoolStreet wrote: Fri Sep 18, 2020 12:20 am
Lee_WSP wrote: Fri Sep 18, 2020 12:05 am
FoolStreet wrote: Thu Sep 17, 2020 11:31 pm
But if the attorney was retained for purposes related to managing the trust, have some duties to the beneficiary of the trust?
The beneficiaries are not the trust; so, no.
Or said another way, should the beneficiary of a trust expect the attorney to respond to the beneficiary and/or share copies of the trust or other trust-related info?
Different issue. The attorney is expected to maintain confidentiality of the client. If the client authorizes or instructs the release, yes. Otherwise, no.

The trust document itself is a different issue. Presumably the trust authorizes it's release to the beneficiaries unless expressly prohibited for some reason. That said, the trustee should be under an obligation to do so. The trustee would then instruct the attorney to release the information.



This is all assuming the trust retained the attorney. The attorney's client is actually the testator (dead father) unless otherwise retained by another party.
Thanks for breaking this down. So, the original attorney who prepared the testator's (father's) trust would have knowledge of whether the trust authorizes or prohibits its release to the beneficiaries. Are these 3 options correct:

1. If the original attorney was retained by the trustee, then the attorney would advise this to the trustee, and the beneficiary would be at the mercy of the trustee as to whether the trustee would release the trust details to the beneficiary.

1a. If the original attorney was retained by the trustee and the trust did not prohibit release, but the trustee was blocking it's releases -- then the beneficiary could ask their own retained counsel to contact the original attorney and request the release. At which point the original attorney would advise their client, the trustee, on whether to do so, or how to fight it. I presume that a clear request from Beneficiary legal to Trustee legal has a respectable chance of breaking the log jam, and if not, then we know we are dealing with a real situation.

2. If the original attorney was not retained by the trustee, could the beneficiary retain that original attorney and ask them to share the trust details, which they probably have on file? If the trust authorizes it's release to the beneficiaries, would the attorney do so directly, even if it bypassed the trustee?
This article may be insightful

https://www.mondaq.com/trusts/280402/be ... -documents

1. Beneficiaries are pretty much at the mercy of the trustee. That's how the trust works. The settlor does not trust beneficiaries with the property. It is what it is.

2. No. Hard no. Confidentiality does not die with the client.
Lee_WSP,

A friend has the chance to sit down with the lawyer who drafted his parents trust. His Father died and based on earlier discussions with the lawyer was told that the trust would be amended to either split everything in half at the time of death between the surviving Mom and my friend and his brother, -- or -- they could keep the trust intact and income be used for Mom, then all go brothers upon Mom's passing.

The friend is okay with the latter option to take car of Mom, but has honest concerns about remarriage and/or mismanagement situations (because Dad did all the complicated business stuff.)

What kind of questions would you suggest that my friend ask this lawyer in their next meeting?

Re: ethics concern with trust

Posted: Wed Dec 02, 2020 2:59 pm
by FoolStreet
Lee_WSP wrote: Fri Sep 18, 2020 12:33 am
FoolStreet wrote: Fri Sep 18, 2020 12:20 am
Lee_WSP wrote: Fri Sep 18, 2020 12:05 am
FoolStreet wrote: Thu Sep 17, 2020 11:31 pm
But if the attorney was retained for purposes related to managing the trust, have some duties to the beneficiary of the trust?
The beneficiaries are not the trust; so, no.
Or said another way, should the beneficiary of a trust expect the attorney to respond to the beneficiary and/or share copies of the trust or other trust-related info?
Different issue. The attorney is expected to maintain confidentiality of the client. If the client authorizes or instructs the release, yes. Otherwise, no.

The trust document itself is a different issue. Presumably the trust authorizes it's release to the beneficiaries unless expressly prohibited for some reason. That said, the trustee should be under an obligation to do so. The trustee would then instruct the attorney to release the information.



This is all assuming the trust retained the attorney. The attorney's client is actually the testator (dead father) unless otherwise retained by another party.
Thanks for breaking this down. So, the original attorney who prepared the testator's (father's) trust would have knowledge of whether the trust authorizes or prohibits its release to the beneficiaries. Are these 3 options correct:

1. If the original attorney was retained by the trustee, then the attorney would advise this to the trustee, and the beneficiary would be at the mercy of the trustee as to whether the trustee would release the trust details to the beneficiary.

1a. If the original attorney was retained by the trustee and the trust did not prohibit release, but the trustee was blocking it's releases -- then the beneficiary could ask their own retained counsel to contact the original attorney and request the release. At which point the original attorney would advise their client, the trustee, on whether to do so, or how to fight it. I presume that a clear request from Beneficiary legal to Trustee legal has a respectable chance of breaking the log jam, and if not, then we know we are dealing with a real situation.

2. If the original attorney was not retained by the trustee, could the beneficiary retain that original attorney and ask them to share the trust details, which they probably have on file? If the trust authorizes it's release to the beneficiaries, would the attorney do so directly, even if it bypassed the trustee?
This article may be insightful

https://www.mondaq.com/trusts/280402/be ... -documents

1. Beneficiaries are pretty much at the mercy of the trustee. That's how the trust works. The settlor does not trust beneficiaries with the property. It is what it is.

2. No. Hard no. Confidentiality does not die with the client.
Lee_WSP,

A friend has the chance to sit down with the lawyer who drafted his parents trust. His Father died and based on earlier discussions with the lawyer was told that the trust would be amended to either split everything in half at the time of death between the surviving Mom and my friend and his brother, -- or -- they could keep the trust intact and income be used for Mom, then all go to brothers upon Mom's passing.

The friend is okay with the latter option to take car of Mom, but has honest concerns about remarriage and/or situations where she might be taken advantage of (because Dad did all the complicated business stuff.)

What kind of questions would you suggest that my friend ask this lawyer in their next meeting? Thank you for taking the time to answer.

Re: ethics concern with trust

Posted: Wed Dec 02, 2020 3:08 pm
by Lee_WSP
FoolStreet wrote: Wed Dec 02, 2020 2:59 pm Lee_WSP,

A friend has the chance to sit down with the lawyer who drafted his parents trust. His Father died and based on earlier discussions with the lawyer was told that the trust would be amended to either split everything in half at the time of death between the surviving Mom and my friend and his brother, -- or -- they could keep the trust intact and income be used for Mom, then all go brothers upon Mom's passing.

The friend is okay with the latter option to take car of Mom, but has honest concerns about remarriage and/or mismanagement situations (because Dad did all the complicated business stuff.)

What kind of questions would you suggest that my friend ask this lawyer in their next meeting?
That fact pattern does not make sense. With the death of one of the settlors, a living trust will either: continue on as before (since death did not trigger any changes other than trusteeship) or trigger some instruction in the trust.

Your friend needs to do more basic research and figure out if he/she even has any say in what happens next. The friend may want to pay the lawyer or a lawyer to go over the document in detail.

Re: ethics concern with trust

Posted: Wed Dec 02, 2020 4:24 pm
by FoolStreet
Lee_WSP wrote: Wed Dec 02, 2020 3:08 pm
FoolStreet wrote: Wed Dec 02, 2020 2:59 pm Lee_WSP,

A friend has the chance to sit down with the lawyer who drafted his parents trust. His Father died and based on earlier discussions with the lawyer was told that the trust would be amended to either split everything in half at the time of death between the surviving Mom and my friend and his brother, -- or -- they could keep the trust intact and income be used for Mom, then all go brothers upon Mom's passing.

The friend is okay with the latter option to take car of Mom, but has honest concerns about remarriage and/or mismanagement situations (because Dad did all the complicated business stuff.)

What kind of questions would you suggest that my friend ask this lawyer in their next meeting?
That fact pattern does not make sense. With the death of one of the settlors, a living trust will either: continue on as before (since death did not trigger any changes other than trusteeship) or trigger some instruction in the trust.

Your friend needs to do more basic research and figure out if he/she even has any say in what happens next. The friend may want to pay the lawyer or a lawyer to go over the document in detail.
I will relay that. The initial discussion referenced some sort of clause that triggered a split due to a consideration of second marriages. Thank you.

Re: ethics concern with trust

Posted: Wed Dec 02, 2020 4:28 pm
by Lee_WSP
FoolStreet wrote: Wed Dec 02, 2020 4:24 pm
I will relay that. The initial discussion referenced some sort of clause that triggered a split due to a consideration of second marriages. Thank you.
The friend needs to realize that it's not his/her money. It may be his/her money when mom dies, but waiting for someone to die is not healthy. Until it is friend's money, friend should just try to enjoy life and not worry about it unless mom reaches out for help.