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$11 million Los Angeles family estate under watch

On Behalf of | Aug 1, 2012 | Estate Administration |

The management of a California family’s $11 million trust fund is under careful watch by federal law enforcement officials and family members. A probate judge in Los Angeles County recently approved a $50,000 compensation payment to one of the estate trustees, who is under FBI scrutiny.

The trustee handles the multimillion dollar trust for an 88-year-old woman whose heirs say has suffered dementia for several years. The estate manager is also a financial advisor for the Kabbalah Centre, which accepted a $600,000 donation from the elderly woman’s trust fund in 2005.

Law enforcers in Palos Verdes Estates and later FBI agents began to wonder if the donation was legitimate and launched an investigation. The Kabbalah Centre is under a separate investigation for possible tax evasion.

Officials are also questioning the dementia patient’s purchase of a piece of real estate owned by the trustee. The woman had lived in the same home for 30 years before emptying the family trust fund of $2 million to buy the vacant land and build a new home.

The real estate deal allegedly netted the trustee a profit of $300,000. The trust has not been charged with any wrongdoing and insists that the family’s money was managed frugally and without waste.

The $50,000 payment approved by a probate judge is a sum equal to the yearly service the trustee provides for the trust fund’s management. The probate court issues payments from the fund because the trust was created by the dementia victim’s mother. The trustee’s compensation request received written approval from the elderly trust beneficiary.

Fourteen family members stand to benefit from the family trust at the time of the elderly woman’s death. The relatives have made no allegations against the trustee. Some have made inquiries into the federal investigation.

Perhaps as a precaution, family plans are now underway to sell off the Beverly Hills home built on land formerly owned by the financial advisor. Proceeds are earmarked to be returned to the family coffers.

Source: articles.latimes.com, “Probate judge OKs payment for trustee under investigation,” Harriet Ryan, July 18, 2012