The Unlucky Lucky

An individual may lack the skills necessary to properly manage the trust property.  This deficiency could be the result of mental or physical incompetence or a lack of experience in the rigors of making prudent investment decisions.  For example, persons who suddenly obtain large amounts of money, such as performers, professional athletes, lottery winners, or personal injury plaintiffs, tend to deplete these windfalls rapidly because they have never learned how to manage their money wisely.  By putting the money under the control of a trustee with investment experience, the settlor increases the likelihood that the beneficiary’s interests are served for a longer period of time.

Earlier on this blog, I reported on how some recent examples of this problem.  For additional information, see James Dao, Instant Millions Can’t Halt Winners’ Grim Slide, NY Times, Dec. 5, 2005.  Here is a “teaser” from the article:

In 2003, just three years after cashing in his winning ticket [for $34 million], Mr. Metcalf died of complications relating to alcoholism at the age of 45. Then on the day before Thanksgiving, Ms. Merida’s partly decomposed body was found in her bed. Authorities said they have found no evidence of foul play and are looking into the possibility of a drug overdose. She was 51.