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beneficiaries’ lost income be made up for out of the Trustee’s
assets and not by taking away what should go to remainder
beneficiaries. Petitioner charged that the Trustee should have
opposed homestead status for the residence of L.O. Ivey’s widow,
and that the Trustee’s failure to oppose homestead status was a
breach of fiduciary duty which may have resulted from “an
extrinsic fraud”. The asserted extrinsic fraud involved a
conflict of interest in that the conservator for L.O. Ivey’s
widow (the conservator also was a residual beneficiary of the
widow’s estate) was married to a partner in the law firm that
represented the Trustee, as a result of which the Trustee acted,
or failed to act, in a manner that favored L.O. Ivey’s widow over
the other beneficiaries of the Trust.
Investments too aggressive. Petitioner charged that there
was a large turnover in the Trust’s investment portfolio, and
contended that she should be given the opportunity to investigate
the situation.
Self-dealing. Petitioner charged that the Trustee
improperly deposited substantial cash amounts in the Trustee’s
own money market accounts and contended that there should be an
examination of comparative interest rates and costs to determine
whether income beneficiaries were disadvantaged by these
deposits.
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Last modified: May 25, 2011