managing trusts. When large trusts are established for minor children, it is necessary to use a
professional trustee, but there are no guarantees that the professional trustee will carry out their
fiduciary duties appropriately.
Tragically, seven year old Angela Militello became an orphan when her parents passed away in Midland,
Texas. The Militello family was well off and had prepared for such a circumstance with a large trust that
was managed by Wells Fargo bank. There were no problems for many years, or so it seemed. When Ms.
Militello divorced in 2006, she contacted the trustee to take $200,000 from her trust so that she could
buy a home for herself and her children. The money was given to her, and she was asked to sign
paperwork approving the sale of a third of the entire trust’s assets. In the next few weeks, the
remainder of the trust assets were sold.
In and of itself, this is not an unusual story. A beneficiary of a trust needs cash for a particular purpose
and to obtain the cash trust assets need to be sold.
The unusual aspect here is that Militello later sued Wells Fargo for fraud. She claimed that the bank
conspired with a third-party to sell the trust assets at below market value. After a trial a Texas judge
agreed with Militello and ordered Wells Fargo to pay $8 million in damages. The Dallas Morning News
reported this story in "Judge: Wells Fargo to pay $8M for fraud tied to trust set up when Dallas woman
The lesson here is that even when using the services of a professional trustee, such as a bank, trust
beneficiaries should always pay attention and make sure the trustee is not acting for its own benefit.
Contact our Estate Planning Attorney's to avoid any similar problems.
Reference: Dallas Morning News (July 10, 2015) "Judge: Wells Fargo to pay $8M for fraud tied to trust
set up when Dallas woman was orphan."