If you are a trustee, you are charged with investing trust assets. A recent setback for a well known cupcake company serves as a lesson on investments for trustees. Florida trustees should learn from this recent business development: how a business can crumble and –remember– that the trust money which you invest wrongly can end up being not that sweet at all.
Investing Trust Assets
- a TRUSTEE must invest trust money prudently
- in Florida, the guiding light for Palm Beach trustees is the Florida Trust Code and Chapter 518 of the Florida Statutes
- you have to invest trust money according to the Prudent Investor Rule
- many Florida trustees don’t know what that actually means, or how the Florida Prudent Investor Rule actually works in “real life”
- Can you describe what “prudent” really means?
- Well, if you are not a Florida trust lawyer, or someone who manages money for a living, full time, you probably can’t
Be Wary of Investing: Be Cautious
- Crumbs was a great cupcake store that I have enjoyed when I’ve travelled to New York on trust business
- The cupcake store was well known and by all accounts a sweet deal
Q: Would you invest trust assets in this company?
- Well, the company has since been de-listed from the NASDAQ and they are closing all the stores (to read more, please see the links below)
- So, this Crumbs business story is a good lesson on investing for Florida trustees: not every investment, even well known companies, or those that have great products, make it. Some fail: not just lose money. Sometimes you lose all your investment dollars.
So, Florida trustees, invest wisely.
Q: Have you actually read the Florida Prudent Investor Rule?
If you need help investing trust assets, consider delegating investment functions to an “investment agent” under the Florida Trust Code and under the Florida laws on Prudent investing.
- According to published media reports: “New York City-based Crumbs has announced the closure of all stores, following the company’s delisting from the Nasdaq last week, the AP reported. The cupcake bakery operates 65 locations in 12 states and Washington, D.C. has stated that it is going to close all its stores.”
- Here’s the link to the article about the store closings: http://commercialobserver.com/2014/07/crumbs-bake-shop-to-close-all-stores/
- Here is the link to the yahoo Finance site if you want to read more about the delisting of the shares: https://finance.yahoo.com/news/cupcake-chain-crumbs-delisted-nasdaq-182000583.html;_ylt=AwrBTzhB27tT9UMALC9XNyoA;_ylu=X3oDMTEzdWJqcjdzBHNlYwNzcgRwb3MDMQRjb2xvA2JmMQR2dGlkA1NNRTU5Ml8x