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My brother the Trustee of my mother's estate has managed her…

Customer Question
My brother the Trustee...

My brother the Trustee of my mother's estate has managed her money to his advantage. He made a $200,000 loan to a friend of his (unsecured) which has enabled him to buy shares of a condominium that have tripled in value. He claims it was good for her estate because she received a 15% interest rate.Can he be charged with abuse of the estate and mad to share his profits with the estate?

Lawyer's Assistant: What state are you in? It matters because laws vary by location.

Florida

Lawyer's Assistant: Has anything been filed or reported?

No

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

I believe this loan was made in 2014

Submitted: 1 month ago.Category: Legal
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Answered in 12 minutes by:
1/6/2018
Lawyer: Bill Attorney, Lawyer replied 1 month ago
Bill Attorney
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Satisfied Customers: 1,724
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Dear Customer ,

Thank You for posting your trust-law question in Florida today. I'm attorney Bill answering your question today. Your brother as trustee has a duty to exercise his fiduciary duties to the beneficiaries of the trust in responsible manner. Investments that overly risky may undermine the performance of hid duty in law and give grounds for his removal as trustee or account for losses.

The fact that he has made a good business judgment alone for the trust isn't suffice to say that his conduct was correct and that required under the prudent investor rule.

The rule follows:

"518.11 Investments by fiduciaries; prudent investor rule.—

(1) A fiduciary has a duty to invest and manage investment assets as follows:

(a) The fiduciary has a duty to invest and manage investment assets as a prudent investor would considering the purposes, terms, distribution requirements, and other circumstances of the trust. This standard requires the exercise of reasonable care and caution and is to be applied to investments not in isolation, but in the context of the investment portfolio as a whole and as a part of an overall investment strategy that should incorporate risk and return objectives reasonably suitable to the trust, guardianship, or probate estate. If the fiduciary has special skills, or is named fiduciary on the basis of representations of special skills or expertise, the fiduciary is under a duty to use those skills.

(b) No specific investment or course of action is, taken alone, prudent or imprudent. The fiduciary may invest in every kind of property and type of investment, subject to this section. The fiduciary’s investment decisions and actions are to be judged in terms of the fiduciary’s reasonable business judgment regarding the anticipated effect on the investment portfolio as a whole under the facts and circumstances prevailing at the time of the decision or action. The prudent investor rule is a test of conduct and not of resulting performance.

(c) The fiduciary has a duty to diversify the investments unless, under the circumstances, the fiduciary believes reasonably it is in the interests of the beneficiaries and furthers the purposes of the trust, guardianship, or estate not to diversify.

(d) The fiduciary has a duty, within a reasonable time after acceptance of the trust, estate, or guardianship, to review the investment portfolio and to make and implement decisions concerning the retention and disposition of original preexisting investments in order to conform to the provisions of this section. The fiduciary’s decision to retain or dispose of an asset may be influenced properly by the asset’s special relationship or value to the purposes of the trust, estate, or guardianship, or to some or all of the beneficiaries, consistent with the trustee’s duty of impartiality, or to the ward.

(e) The fiduciary has a duty to pursue an investment strategy that considers both the reasonable production of income and safety of capital, consistent with the fiduciary’s duty of impartiality and the purposes of the trust, estate, or guardianship. Whether investments are underproductive or overproductive of income shall be judged by the portfolio as a whole and not as to any particular asset.

(f) The circumstances that the fiduciary may consider in making investment decisions include, without limitation, the general economic conditions, the possible effect of inflation, the expected tax consequences of investment decisions or strategies, the role each investment or course of action plays within the overall portfolio, the expected total return, including both income yield and appreciation of capital, and the duty to incur only reasonable and appropriate costs. The fiduciary may, but need not, consider related trusts, estates, and guardianships, and the income available from other sources to, and the assets of, beneficiaries when making investment decisions."

If your brother made extra money from the deal then additionally he can be liable to account for these gains and pay them over to the trust.

Your brother must respond to you/ as a beneficiary to a court petition to account for the recent transactions and to turn over any monies gained from the use of trust funds.

If his conduct has been reckless in addition to a personal accounting you can request his removal as trustee in the probate court petition.

We are here to help, so please follow up with me as you require.

I'm an independent legal expert and rely on your positive feedback today to get a credit.

You do this by rating 5*****, 4**** or better.

So I hope you rate FIVE STARS before your exit today.

Thank You

Attorney Bill

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Customer reply replied 1 month ago
My rating is 4.
Lawyer: Bill Attorney, Lawyer replied 1 month ago

If there is anything else please let me know.

In relation to the rating you need to follow the icon to rate, so please take the time to do that.

I'm not an employee of justanswer but do get a credit for my answer only after you take the time to leave positive feedback.

Best

Attorney Bill

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