The Dangers of Picking the Wrong Trustees

Most estates have a trust or two, especially as the estate is more valuable. People spend a lot of time working with their estate planners on the details of the trusts. Yet, picking the trustee or trustees often is an overthought. That’s a big mistake.

This article describes how the estate of one of the country’s great early fortunes is in trouble. The creator of the fortune had the foresight to set up a foundation with trustees to care for the estate and that was fully funded. Yet the trustees squandered the money in recent years, spending it on side projects and on themselves. Some assets in the estate house are being sold to replenish the trust.

And so it has come to this: Sumptuous artworks collected by the late Chauncey Devereux Stillman, grandson of the family patriarch, are being placed on the auction block. The hope is that the proceeds will be enough to bring to life the founder’s vision and preserve Wethersfield — its house, gardens and trails — for the public good.

It might be easy to dismiss Wethersfield as a familiar story of indolent affluence: One generation makes money, another squanders it. But the long arc of the Stillman fortune — worth an estimated $1.6 billion, in today’s dollars, when James Stillman died in 1918 — is a cautionary tale for the growing number of families creating private investment vehicles and foundations to guard their wealth and legacy. One clear lesson: Pick trustees and money managers carefully.