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Mr. Clay managed and controlled the trust, its assets, and all
relevant files relating thereto. He alone (1) assumed
responsibility for investment decisions, (2) made distributions to
petitioner, (3) maintained the trust books and records, and (4)
prepared and filed tax returns and supporting documentation. He
prepared annual accountings of the trust’s finances on behalf of
the cotrustees (depicting distributions from the trust as well as
assets contained in the trust).
As of spring 1993, Mr. Clay had fallen a few years behind in
preparing these accountings because most of the trust assets
consisted of unimproved land near Springfield Mall, which was tied
up in condemnation proceedings.
Mr. Clay believed that petitioner was too young to comprehend
the substantial inheritance she had received. He took the position
that only after petitioner became older would she appreciate the
size and type of assets inherited and be in a position to properly
manage her inheritance. Consequently, Mr. Clay provided petitioner
with minimal information regarding her inheritance: he did not
prepare any statements detailing the size or composition of the
trust assets, the income generated by the trust, or the amounts of
distributions or expenditures of funds that were made on her
behalf. Because of Mr. Clay’s philosophy, petitioner was clueless
as to the size and type of the trust assets. Petitioner was aware
only that the trust assets included real estate, which she believed
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