Week 4 management assignment
Gift 47.1 For 12 years, Theodore Alexander Buders father made substantial gifts to his minor grandchildren. Theodore Buder and his wife divorced during this period. The cash gifts, typically in the form of checks made directly payable to the children, were given to Buder with the understanding that he would safeguard the money and invest it on behalf of the children. Buder invested various amounts of the childrens money in blue chip stocks traded over the New York and American stock exchanges. Buder also invested substantial sums of the childrens money in speculative penny stocks. The stocks were purchased in Buders name as custodian for the children, as required by the Uniform Gifts to Minors Act (UGMA). At one point, almost half of the childrens money was invested in penny stocks. All the penny stocks except one suffered substantial losses. Buders ex-wife, Sartore, sued him, alleging that he had breached his fiduciary duty owed to the children under the UGMA. She sought to recover the funds lost by Buders investment of the childrens funds in penny stocks. Who wins? Buder v. Sartore, 774 P.2d 1383, Web 1989 Colo. Lexis 227 (Supreme Court of Colorado) Buder as the trustee owes a fiduciary duty to his kids in regards to how he handles the gifts. The laws states that trustee cannot use a beneficiarys money in speculative ventures and with regards to this case it specifically sais that the stocks are speculative. When a trustee breaches their fiduciary duty, they can be held personally liable so the ex wife wins as the natural guardian of the children. 48.8 Adverse Possession Joseph and Helen Naab purchased a tract of land in a subdivision of Williamstown, West Virginia. At the time of purchase, there were both a house and a small concrete garage on the property. Evidence showed that the garage had been erected sometime prior to 20 years earlier by one of the Naabs predecessors in title. Two years after the Naabs bought their property,...
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