Date: Mon, 2 Feb 2004 08:44:00 CST
From: "Ed Zollars, CPA" 
Newsgroups: misc.invest.financial-plan
Subject: Re: How to make the trust dept of a bank to follow the written instructions?
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zxcvar wrote:

> Greetings! I am told that trust department of our local bank [who is a
> trustee of my assets] is not following the instructions of the trust.
> Trust dept is investing money in investments where the trust dept will
> receive maximum commission. How one can make the trust dept to invest
> money according to the strict instructions? With thanks.
> 

Officially, the answer is that if a trustee is not following 
the terms of the trust, as a beneficiary you would likely 
have legal standing to bring an action in the court that has 
jurisdiction over the trust for damages and other relief to 
get the trust back to its terms.

Now, that said, legal action is expensive and time 
consuming--and you first need an attorney to look at the 
situation and tell you whether you truly have a case.  Now, 
if the bank is just blatantly violating the trust that's one 
thing--but if that isn't so clear (and I suspect it isn't) 
then you have to deal with the risk of litigation, as well 
as you becoming potentially responsible for paying for all 
costs of the litigation, either directly (bank gets court to 
award it legal fees) or indirectly (if the bank prevails, 
the expenses of fighting the claim would likely be 
considered legitimate expenses to be charged to the trust).

I would also note that what may appear "clear" to you as a 
violation may not appear clear to a third party.  By a clear 
violation I mean something like this:

1.  Trust provides that trust corpus shall only be invested 
in securities directly issued by the United States 
government and grants no discretion to the trustee under any 
circumstances to vary those investments.

2.  Trustee instead invests all assets in a stock mutual 
fund that the bank manages.

If it's not that clear, then you have a lot bigger hill to 
climb.  Remember, the person that set up the trust 
specifically delegated the decisions on investing to the 
trustee and *NOT* to you.

--
Ed Zollars, CPA
Phoenix, Arizona