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What Palm Beach Trustees Need to Know About IPO’s

Uncategorized Mar 29, 2014

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

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 !