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Dispelling Myths – Why Do I Need You? I’m Not Doing Anything Wrong.

My suggestion is to at least retain counsel when your trusteeship begins. If you find that you don’t need legal advice you can discharge the attorney. But it would be wrong for trustees to work in a vacuum and not have the benefit of counsel.


Recently, I was called by a CPA whose trustee client was dissatisfied with his present trust attorney and wanted a more “aggressive” attorney. When we started discussing the facts, it was clear that the trustee did not like the advice he was receiving from his attorney. He didn’t even think he needed one!

Issue: The trustee thought his lawyer was wrong for raising issues which the trustee believed were not issues; and for making suggestions which the trustee didn’t like.

Answer: The trustee didn’t necessarily want more of a fighter. What he wanted was advice which matched his own personal beliefs. The trustee was also a beneficiary of a trust which had one asset: very valuable income producing real property. The trustee was the sole income beneficiary! The other, remainder, beneficiaries, and their counsel, asked the trustee to sell the real estate and diversify the investments. Sounds reasonable, right? After all, why put all your trust “eggs” in one “basket”? And isn’t diversification a very basic tenet of prudent investing?

The trustee was fighting that notion and was worried that if he sold the property, his income would decrease. The trustee also had this personal affinity for the real property in the trust. He loved that asset and he loved “working it.” He didn’t want to sell it because, personally, it gave him something to do. I advised that, first of all, that analysis was not proper because he was placing his own, personal interests above those whom he agreed to serve (the beneficiaries) and his ongoing duty to prudently invest the trust assets. This included avoiding asset concentrations and also diversifying the trust property.

I told him that if he wanted to simply be assured that he would receive the same income if he sold the real estate, that I could assist him, because there were methods in the trust law which provided opportunities to do this. The trustee hemmed and hawed. Then he asked me what I thought of not selling the real estate but rather exchanging it in a tax-free manner for another piece of real property.

He just didn’t get it. But I did. The trustee enjoyed managing the real property. He liked real estate as an investment. He didn’t like stocks and bonds or administering a portfolio of equities. He liked being in control.

Well, I advised him that the advice he was getting from his present attorney was good advice, and that there was no reason to hire me. I also advised him that he didn’t even realize that what he was doing, indeed his analysis, was wrong. I started to explain to him what the “prudent investor” rule was, and what his duties as a trustee were.

“I know that!” he interrupted.

My reply: “No…. Clearly, I don’t think you do.”

I felt like Jerry Seinfeld in that episode when he made a car rental reservation but there’s no car at the rental company when he goes to pick it up, even though they acknowledge Jerry’s reservation. Seinfeld starts explaining that he needs a car and that he made a reservation. The rental car employee interrupts Seinfeld and tells him in a condescending manner that she knows what a reservation is. Seinfeld deadpans: “No, I don’t think you do.”

I felt the same frustration. I just wasn’t getting through to this prospective client and trustee. He was in denial and embracing, indeed holding on to, two common myths: he didn’t need trust counsel and what he was doing was right. He just didn’t get it. And I didn’t get the business.

Moral of the story: you may not realize that what you are doing is wrong. In fact, he stated that under his trusteeship the value of the real estate went up dramatically, to which I replied: “That’s what you are supposed to do.” Second moral of the story: you probably should do more than merely hear what your attorney has to say: you should listen. And if you don’t believe in or trust your attorney: you should fire that attorney.

How to Revoke Probate in Florida >

Punitive Damages in Trust Cases >

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