Trust, Are You Kidding?!
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Sue wants to change the system to be responsive to the goals of the grantor. Her intention is to educate people about how they can choose a model of trust that works with their family and assets.

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A Trust Betrayed
By Gary Stevens

Barbara Suzanne Farley, J.D.
Armed with a law degree and a sense of indignation, Sue Farley is ready for battle. As the CEO of Fiduciary Technologies, Inc., she’s taking on one of the oldest and least understood bastions of institutional corruption: the trust industry.

Currently in the throes of a $50,000,000 lawsuit involving a trust that has been whittled down from $50,000,000 to $1,000,000 for the trust’s beneficiaries through various fees, machinations of the lawyers and court costs. Farley told us something almost impossible to fathom. “The lawyers and financial institution who formulated the estate plan inserted themselves in as trustees and systematically looted the trust over 10 years leaving nothing for the beneficiaries.” It’s like [Charles Dickens’] Bleak House on steroids.” But in addition to taking on the establishment in the courts, Farley has come up with a fundamental solution to this endemic problem: she has designed a system to end the corruption that robs from beneficiaries when our loved ones pass away.

Putting her legal mind to work in collaboration with IT professionals, Farley has created architecture for software and a larger technology framework that allows ordinary people to plan out their estate and trusts, put them into a legal framework and link them to an administrative program. “It is a way to give control back to people who have wealth to pass on,” she says. That passion to protect the vulnerable against the powerful has animated Farley’s career.

In the 1980’s, as a young lawyer in San Francisco, Farley represented the prominent Gump family in a lawsuit against Wells Fargo Bank. “The bank was holding back money that should have been distributed, and not collecting rents on properties the estate owned. I was going up against a huge financial institution ultimately represented by two law firms—with over 300 lawyers each—and I said, “let’s settle, it’s only $50,000 to $100,000 at stake. But the bank resisted paying anything responding that they would recover all of their attorney’s fees from my client for the litigation. But Sue Farley won the case and asked for $1,000,000 in punitive damages and got it. The caught the attention of major newspapers. The Wall Street Journal, the Los Angeles Times and the San Francisco Chronicle all published her story, and soon her phone was ringing off the hook.

Farley says the current system gives too much power to trustees, and has too little oversight. She wondered, “Why hasn’t technology been introduced into this system to make it more accountable? Why doesn’t anyone touch this industry?” Protecting our assets from legalized theft and reducing the destructive effect on families were the motivations for Farley to form Fiduciary Technologies.

We developed an ontology, a language of trusts, and an architecture that overlays trust law with the provisions of your trust, your [true] goals and intentions. It then links to an administrative program that implements your plan and [finally] your trust is executed in accordance with your directives. “It gives you control by setting parameters around decision-making. “In our system, administrative tasks and expenses are cut to 1/3 of what they are today and “the fox can be in the hen house but he will only be able to eat one chicken before he is caught.”

In 1990, Farley stopped practicing law in order to concentrate on shifting the paradigm. “My dream is to change the industry so that our children are first [to benefit],” she said. “Now, lawyers, accountants and bankers take their money first from our estates and trusts.”

Ultimately, her goal is to bring her service and technology to the general public. She has met with both acceptance and reticence within the banking community. “Lower level people say that it’s a great idea,” and want the system, but the principals have told her that “the banks make money on the way it is.” Farley said, “So many professionals make money from the system, the consumer is the loser. Farley devoted all of her time to the project at her own cost. But she needs funding to keep it going. She has written a book, Trust, Are You Kidding? (a #1 best seller on Amazon) about the pitfalls of the trust industry. She is back practicing law in order to earn a living while she pursues her larger dream.

Farley’s energy and determination are the result of watching what her mother went through after divorcing her father. As her mother worked to sustain the family, her father was ordered to pay child support. Instead, he disappeared and hid his assets. Sue’s mother pursued recovery for her children which took 12 years of litigation and a U.S. Supreme Court challenge. Like Sue, her mother refused to give up.

Watching that drama unfold inspired Sue. “I saw the powerlessness of my mother [for all those years], and I swore it would never happen to me.” And now that she’s armed with information that could help us all to avoid a similar catastrophe, she’s working hard to get funding and to get the word out.

 

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