Estate Managers Accused of Making Negligent Transfers


Estate Management Expert WitnessThis claim involves alleged misconduct by various individuals who were employed by financial institutions based in Washington to oversee the donor advised fund of a wealthy couple. The donors, a married couple of advanced age, suffered from dementia. The husband had a host of medical complications and was permanently blind. The children of the donors and the executors to the family’s estate claim that the brokers sought high fees for transactions, rather than exercising prudence and caution in administering the fund. The entirety of the fund – which amounted to tens of millions of dollars – was depleted in 4 years  in several significant transactions. It appears that the brokers working with the  couple were not adequately supervised and failed to follow necessary precautions to ensure that these transfers were valid and didn’t require further supervision or approvals.

Question(s) For Expert Witness

  • 1. Please explain your familiarity with donor advised funds.
  • 2. Do you oversee brokers who work with clients who have established donor advised funds?
  • 3. If so, what level of supervision is required to ensure an incident like what's been described above doesn't occur?
  • 4. Have you ever witnessed a donor advised fund - presumably moderated by elderly folks - making unusually large transfers of assets over a short period of time - nearly depleting the entirety of the fund?
  • 5. Have you ever served as an expert witness on a matter involving a donor advised fund related dispute?

Expert Witness Response E-009798

I have a wealth of knowledge of the accounting and operations needed to manage donor advised funds. For the past 3 years, I have managed the donor advised funds at the Jewish Federation of Metropolitan Chicago in the Accounting department. There are approximately 1,000 donor advised funds with net assets in excess of $150M+. We offer our donors several investment products including Fidelity Mutual Funds, a Guaranteed Earnings Account, and the Jewish Federation Pooled Portfolio. There are several donor advised funds that are managed by outside investors at MB Financial, JP Morgan Chase, and William Blair. They have to submit paperwork to me for approval before they are allowed to move forward with a donation. If I saw an irregular transaction like the one in this case that would raise a red flag.

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