If you are the trustee of a Palm Beach trust, you are in charge of administering the trust according to the valid trust document and the Florida Trust Code. Remember: a Palm Beach Trust is NOT a Palm Beach Probate ! Oh yes, you also need to invest the trust assets. Prudently. If you have not hired a professional Co Trustee such as a Palm Beach trust company or bank, and if you have not delegated all “investment functions” to an “investment agent” under the Florida Trust Code, here are a few tips for IPOs and investing under the Florida Prudent Investor Act.
Don’t Speculate — Florida Trust Law will crush you
First and foremost, don’t speculate when you invest Palm Beach trust assets.
Second: Know what speculation is.
IPO Flipping Is NOT Prudent Under Florida Trust Law
- What you do with your INDIVIDUAL $$$ is your business
- What you do with your beneficiaries’ $$$ is a PALM BEACH PROBATE COURT’S business !
- Don’t treat trust money like your own.
- If you are IPO flipping in your own account, that doesn’t work for Florida trusts.
Invest Florida Trust Assets PRUDENTLY
- A Palm Beach trustee needs to invest trust assets prudently.
- You need to know what that means, so hire a Palm Beach trust lawyer who actually litigates prudent investor issues.
- Your definition of “prudent investing” may be different than Florida Trust law.
Why IPOs Are Not Prudent For Florida Trusts
- IPOs are initial public offerings and may be appropriate to add a security to your trust portfolio of trust investments if that purchase is part of an investment strategy under the Florida Trust Code and the Florida Prudent Investor Act
- Buying IPOs to flip is NOT prudent and can mean real liability to the Florida Trustee
King Digital’s IPO– Candy Crush
- Just look at the dismal performance of King Digital Entertainment, which had an IPO this week.
- King Digital makes the Candy Crush Saga and the IPO fizzled
- Those hoping to flip the IPO for a profit didn’t get that chance this week.
- You can read about it on the Wall St. Journal, www.wsj.com website here: http://online.wsj.com/news/articles/SB10001424052702304688104579467703736701242?mod=WSJ_hp_LEFTWhatsNewsCollection&mg=reno64-wsj
What’s the Take Away?
If you are the trustee of a Florida trust or a Palm Beach trust, don’t buy IPOs to flip them. Short term trading = speculation. Speculation = gambling. No matter how much you love the stock. No matter what your broker or golf buddies say.
Message to Florida Trustees: don’t gamble with your beneficiaries’ money !