Wednesday, April 2, 2008

Predatory Trust

Disabled elder names licensed Bank & Trust "Co-Trustee" of Predatory Trust

Illinois Attorney General Lisa Madigan’s office does not intervene to investigate possible abuses by attorneys and bankers. Illinois’ response to such concerns is “Hire an attorney.”

WWII veteran, Darrell La Bounty, with a mental health disability attempted to set aside a trust for the care of himself and his wife, who had early stage dementia. With assistance of a local attorney in his hometown of Decatur, Illinois, he prepared a trust document naming a licensed Bank & Trust, Soy Capital Bank & Trust, as Co-Trustee. Unknown to his immediate family until much later, the trust appears to be a well planned predatory trust designed to benefit attorneys and bankers. Mr. Paul La Bounty reports shock at the predatory nature of the document and he is seeking to determine the purpose of the document’s design. The only child of the La Bountys’ believes the document includes clauses which would cause any “person in their right mind” to hesitate before signing.

Since the title, 'Bank & Trust', inspires trust and the senior La Bounty used the bank for a majority of his lifetime, Paul La Bounty thought auditing safeguards would prevent financial abuses, however, he now has his doubts. Paul La Bounty states that while the trust was never ‘revoked’, one thing is clear: neither his father nor mother, Anna V. La Bounty, benefited from the trust or the testamentary trust left in his final will. Among the document’s provisions are clauses relating to the absolute power and immunity of the named Co-Trustee, Soy Capital Bank & Trust.

Article 5.5: Compensation. The trustee shall be entitled to reimbursement for expenses and to reasonable compensation.

Article 5.6: Determinations by Trustee. The trustee’s reasonable determination of any question of fact shall bind all persons.

Article 5.7: Third-Party Dealings. The trustee’s certification that the trustee is acting according to this instrument shall protect anyone dealing with the trustee. No one need see to the application of money paid or property delivered to the trustee.

Article 5.8: Exoneration of Trustee: Any individual trustee acting in good faith shall not be liable for any act or omission. No trustee shall be liable for any act or omission of another trustee.

Article 5.9: Bond. No Trustee need give bond or qualify before or account to any court.

Article 6.2.7: Delegation. To employ agents, attorneys, and proxies of all types (including any firm in which a relative of mine or his or her spouse is a partner, associate, or employee or is otherwise affiliated) and to delegate to them any powers the trustee considers desirable;

Article 6.2.8: Payment of Expenses and Taxes. To pay all expenses incurred in the administration of the trust and to pay all taxes imposed on the trust;

Article 6.2.11 Nominee Arrangements. To hold any asset in the name of the nominee, in bearer form or otherwise without disclosure of any fiduciary relationship;

The document had dictates naming residual heirs and distribution of household goods, however this clause allows the Co-Trustee the final decision making ability.

Article 2.1: Any decisions made in good faith by the trustee in distributing tangible personal property shall not be subject to review, and the trustee shall be held harmless from any cost or liability as to those decisions. I shall be deemed to have left only those written instruments that the trustee is able to find after reasonable inquiry within 60 days after my death.

Paul La Bounty states that he reported files missing when he entered his parent’s home to prepare for his father’s funeral. These files included tax returns, banking documentation, wills and trusts, life insurance policies, (which were included in the trust), and a large CD of 100,000 which his father had shown him five weeks earlier.

Article 2.2: Gifts of Remaining Tangible Personal Property. I give all tangible property not otherwise effectively disposed of to my spouse, if my spouse survives me, or if my spouse does not survive me, then to my son. If he shall not survive me, then in shares of equal value to my grandchildren who survive me (to the exclusion of the descendants of any child who does not survive me), to be divided among them as they agree, or, if they cannot agree within 60 days after my death, as the trustee determines.

Paul La Bounty tells that he was forced to auction household goods to create an “estate in his father’s name”. He complains of being cited for “taking” the possessions left to his Mother who in turn left all the household goods to him. The Co-Trustee serving as financial guardian “made the decision”.

The clause on “accountings” intentionally avoids accounting to immediate family members, those who would be protective of the senior La Bounty.

Article 5.1: Accountings. Commencing May 1 of the year after my death, and not less than annually thereafter, the trustee shall send a written account of all trust receipts, disbursements, and transactions and the property comprising the trust to Donna K. Counterman, and Madeline Brooks, and any other person whose name appears in this document requests an accounting.

Since at that time, attorneys denied the existence of such a trust, it was impossible to request accountings. Paul La Bounty stresses that inquiries to his second attorney who wrote the trust were ignored. Marilyn Brooks, a cousin of Paul’s states she did not receive an accounting. ‘Madeline Brooks’ is non-existent, which is an additional clue that the senior La Bounty did not understand the document’s content.

Paul La Bounty and other residual heirs express concern that the guardianship accounting provided by Soy Capital Bank & Trust did not reflect all assets. A review of the trust documentation raises concern and brings the question of how vulnerable elders are protected against financial abuse by attorneys and bankers. Contact with the Illinois Attorney General’s office prompted a phone call La Bounty’s residence. Paul La Bounty recalls the office responded to the effect that “the office doesn’t handle individual cases.” Their recommendation was, “Hire an attorney”. He states the Illinois State Police Crimes Against Seniors investigator responded by suggesting, “Maybe your Dad gave it away”. The La Bountys question if this type of response to queries regarding missing funds and possible elder abuse, indicates that it is ‘open season’ for financial abuse by attorneys and bankers.

Paul La Bounty and other residual heirs are asking for a “discovery” on both his father’s estate EIN# and the missing trust EIN# which is clearly allowed by Illinois Probate Code in the cases of disabled elders. He states it is not easy to achieve in a court dominated by professional relationships. While the La Bountys are in a state of shock regarding the apparent ease of possible abuse, the difficulty involved in addressing the issue is more distressing. Paul, as a result of this experience, cautions people considering a living trust. He asks, “Who has the best knowledge and ability to abuse funds? Attorneys and bankers have the advantage.” He states the nature of his father’s trust speaks for itself. Attempts to interest state bureaucracies and legislators to review the problem have not been successful, however the family members continue their efforts.

Interested Parties may contact:
Paul La Bounty
Only child and Executor of Anna V. La Bounty Estate
(970) 330-6790

1 comment: said...

Illinois Attorney General Lisa Madigan’s will change her mind when this happens to a family member of hers.