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requested them because he was raised not to say no to his father.
He stated that he and his father discussed the amounts of the
management fees in 1995, and they wrote down the amounts on
“pieces of paper” at the kitchen table. These notes regarding
the purported fees were not produced by the estate at trial.
The estate submitted an expert report by Paul R. Kenworthy,
C.F.P., in which he opined that money managers generally receive
fees of 1 to 1.5 percent of the asset values in the portfolios
they manage. Mr. Kenworthy testified that fees are generally not
determined by the income of the portfolio because income amounts
vary with different types of investments.
We accept Mr. Kenworthy’s testimony that money managers
generally earn 1- to 1.5-percent management fees. However, the
record shows that although KPLP held approximately 60
investments, Austin made only 6 sales or purchases between 1995
and 1998. Dennis testified that few trades were made because his
parents had low bases in the investments, and KPLP would
recognize significant income if they were sold. Given the plan
to hold the investments in order to avoid tax, the degree of
anticipated management of those assets would have been minimal.
The only other management activity the estate claims Austin
undertook was reading newspapers and periodicals daily. The
living trust continued to receive the purported management fee
income and use it to pay the Korbys’ expenses even after Dennis
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