January 7, 2014. Less than two weeks ago, the Iowa Supreme Court expanded the scope of financial planners’ potential liability to certain third parties. In the case, St. Malachy Roman Catholic Congregation of Geneseo, Illinois v. Ingram, a financial advisor helped the decedent (with legal counsel) create a revocable trust which included the decedent’s residence, to be used for the benefit of specific individuals. However, four years later, the financial advisor helped the decedent execute a will which directed an alternative distribution of the estate, including the residence. After the decedent passed away, his residence was transferred according to the terms of the revocable trust, and not the will, because the residence was still titled in the revocable trust. In short, the attorney and financial planner had failed to take actions to ensure the residence was passed through the will as opposed to the revocable trust.
As a result, the intended beneficiaries under the will filed a lawsuit, claiming the financial planner’s negligence caused them damages. The Supreme Court held that the financial planner owed a duty of care to the direct, intended and identifiable beneficiaries, and found the financial planner failed to carry out his client’s wishes. A copy of the decision can be found here. For more information, email info@goosmannlaw.com or call 712.226.4000.