Trusts are an excellent way to make sure that your assets are handled and distributed how you want after you pass away. However, they are not completely foolproof.
Smith was a multimillionaire who gave most of his estate away to charity. He also created a trust with assets of $100 million that was to be invested for the benefit of his wife.
To make sure a trustee would not act in his or her own interests instead of Smith's wife's interests, Smith appointed three co-trustees. This trust should have been about as foolproof as a trust could be.
One of the trustees, Mark Avery, went rogue.
Avery took half of the assets in the trust and invested them in a security company. He claims this was for the benefit of Smith's wife. However, Avery was actually just building himself his own private army and navy for reasons of his own, as CNBC reported in "The American Greed Report: How to control your money even after you die."
Avery was caught and is currently in federal prison serving an 11 year sentence.
Even when everything is done right in creating a trust, things can still go very wrong.
What this means is that you need to be very careful when it comes to the party or parties you appoint to be the trustee of your trust.
It is important to remember the name of the legal instrument (“trust”) and appoint a trustworthy person who lives up to that name.
For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: CNBC (Sep. 2, 2017) "The American Greed Report: How to control your money even after you die."