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HomeMy WebLinkAbout04-16-07 (2) IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION In Re: First and Final Accounting of the May M. Moore Five- Year Charitable Lead Annuity Trust No. ~ of 2007 OBJECTIONS OF AMANDA REED AND ARAMINTA FINN, TRUST PROTECTORS AND TRUST BENEFICIARIES, TO THE ACCOUNTING FILED BY TRUSTEE COME NOW the above named beneficiaries and, for their objections to the Accounting by Community Trust, Trustee of the May M. Moore Five Year Charitable Lead Annuity Trust, -.~__J filed with the Clerk of the Orphans' Court Division of Cumberland County, pemisY1vania;on , ) February 9,2007, state to the Court as follows: c;\ 1. The document filed by the Trustee, and purporting to be the First and Final -1 Accounting, is self-correcting and thus does not provide an adequate accounting of the Trust- assets. Specifically, at page four (4) of the Accounting, the Trustee lists principal gains or losses by simply listing the market value of the main Trust account as of December 8, 2006 and then listing the acquisition value. This section shows a loss of $57,826.41, without providing any detail as to how that "loss" occurred. 2. In fact, to the Objectors' information and belief, the named Trust account had numerous purchases and sales and, during the administration of the trust, had at least a net gain of $80,000.00 on such purchases and sales, which the Trustee has completely ignored in the Accounting. 3. In addition, the Accounting only lists fees paid to the Community Trust Company in the amount of $22,738.39. The Accounting does not, however, list fees or commissions paid to TOEWS as a management fee or to American Skandia Insurance, or to Keeler and Danner Financial Services, LLP. Although the Accounting does not provide the adequate information necessary, the Objectors believe and therefore aver that an amount in excess of the loss of $57,826.41 can be completely accounted for in payments to the various entities who were handling the Trust, other than the Trustee. 4. The Objectors believe, and therefore aver, that the Trustee allowed annual fees as high as 1.65% to be paid not only to itself, but to at least two (2) additional entities for the management of the Trust. 5. The Accounting does not list any of these other entities, nor does it include any description of the work done to manage the Trust by any of the entities, including the Trustee. 6. The Objectors believe, and therefore aver, that the Trustee had very little, if any, role in managing this Trust. Consequently, its fee, which equals approximately 1.65% of the Trust's market value, is not reasonable. 7. In the alternative, the fee of approximately 1.6% charged by TOEWS and allowed by the Trustee, and the fee of approximately 1.65% charged by American Skandia Insurance and allowed by the Trustee, are not reasonable in that the Trust assets have now been charged three (3) times the reasonable standard rate while receiving no excess benefit from having three (3) separate entities involved with the Trust management. 8. Article Sixth, Section (d)(1) of the Trust directs that any investment in mutual funds shall be made in funds with a minimum rating of three (3) stars under the Morningstar Rating System. Although the Accounting does not set forth the schedule of investments, the Objectors believe, and therefore aver, that the Trustee and/or investment counsel failed to properly invest the funds according to said provision. -2- 9. The Trustee and/or the investment counsel further breached their fiduciary duty by investing in an annuity which did not mature at an appropriate time to coincide with the termination of the Trust. Consequently, the Trustee is, in fact, unable to make immediate distribution to the beneficiaries, as proposed, causing the beneficiaries to have to wait at least six (6) months past the Trust termination date before receiving any distribution. 10. The Objectors also believe, and therefore aver, that the proposed legal fees for preparation of the First and Final Account, in the amount of $4,125.00, are excessive for the reason that the Account was not prepared properly and the lack of detail demonstrates very little time put into the preparation of the Account. WHEREFORE, the Objectors request that this Court: (A) Surcharge the accountant Trustee in the amount of $57,826.41, and direct that the Trustee share its fee of $22,738.39 with the other entities which were engaged in managing the Trust; and (B) Deny the request to set aside $4,125.00 for legal fees for the reason that such fee is excessive, and instead direct that the legal fee be paid in an amount more commensurate with the effort and attention placed in preparing the Accounting. Respectfully submitted, Date: '1/ /') / () 7 J~ 1/1 ~ James M. Stein, Attorney for Objectors Dick, Stein, Schemel, Wine & Frey, LLP 13 West Main Street, Suite 210 Waynesboro, Pennsylvania 17268 (717) 762-1160 PA Bar No. 84026 -3- VERIFICATION I verify that the statements made in the foregoing pleading are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S., Section 4904, relating to unsworn falsification to authorities. Date: Apri I ( D ) l uO'( Date: 4,pr-I' (I Zj) ZDJ; ~~(/fI!4~ Araminta Finn . ( PROOF OF SERVICE I HEREBY VERIFY that I have served the foregoing document upon counsel of record by depositing one (1) true and correct copy thereof in the United States Mail, postage prepaid, addressed as follows: Date: '1/1> /07 Lowell R. Gates, Esquire Gates, Halbruner & Hatch, PC 1013 Mumma Road, Suite 100 Lemoyne, P A 17043 ~7h..~ James M. Stein, Attorney for Objectors -4-