Grandaughter of Mary Kay Seeks To Have Trustees Removed From Cosmetic Mogul’s Trusts
Kathlyn Kerr, one of the Mary Kay’s granddaughters, is suing her uncle Richard Rogers and Bank of America for breach of fiduciary duty while managing two of her grandmother’s trusts. She is also asking she be replaced as trustees. The trusts had been set up by Mary Kay for her only daughter Marylyn and her five children. Kerr wants a disinterested corporate trustee to replace Bank of America and Rogers. (Trusts, trustees, and fidicuciary duties are all estate-planning issues and often need the involvement of an estate planning attorney.)
She claims that her uncle engaged in self-dealing, imprudent management, failure to diversify the trust’s assets, and other misdeeds. Both Bank of America and Rogers have denied any wrongdoing. Rogers, Mary Kay’s son, had co-founded Mary Kay Inc. with his mother in 1963.
Kerr and her family live off some $350,000 a year that they receive from these trusts. According to her lawsuit, however, the total values of her shares from three trusts should exceed $100 million. The third trust, a testamentary trust also set up by Mary Kay, has assets that have not been distributed to its beneficiaries.
A Trustee’s Responsibilities to a trust include:
· Holding the trust property.
· Investing the assets.
· Distributing the trust’s income and/or principal to beneficiaries.
· Making tax decisions concerning the trust.
· Keeping records of all trust transactions.
· Providing accurate statements.
· Filing tax returns.
· Issuing tax reports.
· Answering questions that beneficiaries may have.
Breach of fiduciary duty takes place when a trustee or executor acts inappropriately while fulfilling their roles. A person becomes a fiduciary once they’ve agreed to take on the role of trustee or executor.
Examples of when a breach of fiduciary duty can occur:
· Self-dealing: Transferring assets from the estate to the fiduciary.
· Removing property from an estate without permission.
· Failure to carry out administrative duties on time.
· Being financially negligent when handling an estate’s assets.
· Improperly investing these assets.
· Being unable to account for these assets.
· Not correctly carrying out the instructions given to them in the trust or will.
· Neglecting to inform beneficiaries and other interested parties of important information.
If you live in Santa Clara County, Monterey County, and Alameda County, and you wish to speak to an estate planning attorney regarding setting up a trust or reporting a breach of fiduciary duty by a trustee, Sagaria Law, P.C. can help you. We have offices conveniently located in San Jose, Fremont, and Monterey. Contact Sagaria Law, P.C. today for a free consultation.
Mary Kay Heirs At Odds Over Trust Funds, KHOU.com, November 6, 2006
Selecting a Trustee, Cambridgeappleton.com
Related Web Resource:
Establishing A Trust Fund, Metlife.com
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