Dear Editor:
In reference to “Sentinels or Swindlers” (November 2005), trust
creators and their beneficiaries may take several useful lessons from your
excellent article.
The first is that if a beneficiary is seeking a favorable
court judgment or a fair settlement, as in Ms. Hunter’s case, he or she should concentrate time and resources on the one big issue, or, at a maximum, on the
three or four big issues which in dollar terms represent the most important
problem (or opportunity).
 Another lesson is to be sure to write a trustee
removal clause into the trust agreement. If a bank wants the business, it will
have no choice but to accept the clause. With it, and assuming poor trust
performance, the beneficiary can remove the trustee without a potentially
expensive court fight and put the trust up for bids from competitor banks.
Without a removal clause, the trustee has a monopoly position on the trust
assets. If the concerns about incompetent trust management are material, then
the settlor or the beneficiary has the option of challenging the trust agreement
as being invalid. This is because monopoly-like control over assets management
restrains or prevents any competition for such management.
A third lesson is
to define what “acting in the best interest of the living beneficiary” should
mean to a trustee. Safety of capital may be first, followed by reasonable
growth. Asset allocation should be set based on the ages of beneficiaries and
remaindermen, as well as risk tolerances. Simply saying 60 percent stocks and 40
percent bonds is not enough. The trustee needs direction about growth and/or
value investing, about large or small capitalizations, about U.S. or
international stocks and bonds, about Treasury notes or high yield corporate
bonds, and so on. Finally, a settlor needs to make it clear when she does not
want a perfectly fine stock portfolio to be converted into a common trust fund
or the bank’s proprietary mutual funds.
A.R. Lehmann, Briarcliff, N.Y.
Out of Character
Dear Editor:
I just received the November 2005 issue
of Worth, and was disappointed to see the ad on page 21. As a financial
professional and the father of a young daughter, I find it distasteful and
completely out of character for your publication. If this is the way the
developers want to sell real estate, perhaps they should advertise in Maxim or
some other magazine known for the pictures rather than the outstanding articles.
I can’t imagine Glenmede is too happy to be on the backside of a page that will
be torn out of many of the magazines, including mine. Nor does it make good
company for advertisers like Rolls-Royce and Ritz-Carlton.
I enjoy Worth very
much, and actually have two subscriptions: one for my home and one at my office
so I can share it with clients. I have often recommended your magazine, but I’m
afraid many people, and especially my female clients and colleagues, would be
offended by something like this. I hope you will return to your previous high
standards so I can continue to recommend Worth.
Perry A. Novak, Pleasanton,
Calif.
Musical Oversight
Dear Editor:
In “Rich Resonance” (September 2005), your excellent article on premier pianos of the first part of the
20th century, I was disappointed that the writer did not choose to include piano
manufacturers other than Steinway, Mason and Hamlin. Certainly the other three
well-known manufacturers of that era—Knabe, Chickering and Bechstein—should have
been mentioned as well.
While I admittedly am prejudiced because of a
wonderful baby grand Knabe my wife owns—which dates back to pre-World War II—I
am joined in this bias by such famous artists as French composer Camille
Saint-Saens, who favored Knabe over all of its competitors. With graceful lines
and wonderful tones, the grand piano made by Knabe deserved at least a mention,
if not accolades for its position as a fine instrument.
Nelson
Marans, Silver Spring, Md.
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