Trust Matter

mistrusting us bank

Links to Iowa Law on Trusts


As of April 9, 2006, we have begun a broad and extensive update of this website so as to make it crystal clear what the issues with US Bank Trust are here. If this case appears complicated, that is only because US Bank took a relatively simple, straightforward, irrevocable Trust established by our grandfather and made a complete and utter mess out of it through subterfuge and self-dealing. This website first appeared at the point in August of 2004 when US Bank was refusing to provide accounting statements for the 2003 year. So, at the time of the initial construction of this website, the beneficiaries were not yet aware of what US Bank had been doing with the assets in the Trust since the end of 2002, after the bank originally took over management of the Trust in February of 2002. [To clarify, we are not the beneficiaries; our parents are.] The beneficiaries knew that there were problems with significant omissions in the 2002 partial accounting that US Bank had presented in May of 2003, and they were having problems getting the US Bank trustee and other US Bank officials to provide them with the necessary information about the Trust, despite their legal entitlement to that information as beneficiaries and despite the Trust code requirement that they be kept reasonably informed of the happenings of the Trust, particularly changes in investments. Instead, US Bank had left the beneficiaries completely in the dark, and was not responding to requests for financial details about the Trust.

So, in August of 2004, the beneficiaries were not yet aware that US Bank had secretly sold and/or dispersed all of their father's original Trust investments [apart from the Trust real estate at issue, and that issue will be reviewed momentarily], and had replaced all of those investments with US Bank's own proprietary mutual funds, the First American Funds, selling out of the original investments from January 2003 through May of 2003. Even as the beneficiaries had been making requests for financial information during this period, US Bank never provided the information, as it was required to by the Trust Code. And when US Bank finally did issue the 2003 accounting on November 1, 2004 -- after the creation of this website and nearly 21 months after US Bank had begun selling out of the original investments -- the accounting statements that US Bank provided were a convoluted mess, to say the least, and the statements never notified the beneficiaries that the investment funds that they were seeing on the accounting statements were, in fact, owned and managed by US Bancorp itself. This information was never disclosed to the beneficiaries; rather, they had to discover it for themselves after conducting a lengthy and laborious audit of the accounting statements -- which were over 60 pages in length and lacked balances -- and after doing investigative research into the funds.

Indeed, US Bank's failure to directly disclose this information and the fact that these mutual funds used in the Trust were owned and managed by US Bank itself, was a violation of the US Trust Code. US Bank also failed to inform the beneficiaries that there were significant financial incentives and benefits for US Bank and the US Bank trustee in the use of its own mutual funds in the Trust, and that subterfuge, too, was in violation of the US Trust Code. As the details began emerging through our research during November and December of 2004, it became obvious that US Bank had been using the First American Funds in the Trust entirely for US Bank's own financial benefit and profit, and that US Bank had been deliberately concealing this information from the beneficiaries. Indeed, the Trust would have been far more profitable had US Bank simply left the original investments alone. As it stands, the beneficiaries actually suffered a substantial loss due to US Bank's combined actions over the three and a half years that it managed the Trust and received no financial benefits whatsoever from the Trust. Meanwhile, US Bank itself profited substantially from its secretive actions, and continues to profit from its self-dealings with the Trust as of the current date of April 9, 2006. This will all be explained in more detail in what follows.

During the audit at the end of 2004, we also discovered that throughout 2003, US Bank had been reinvesting the Trust investments in its own proprietary money market fund, the First American Prime Obligations Fund, and that from September of 2002 through mid-August of 2003, US Bank had had substantial portions of the Trust invested in its own money market fund, generating a return of only 0.78% [.0078] on average before fees throughout 2003. In fact, from the end of April through mid-August of 2003, US Bank had the entire Trust, apart from the real estate, invested in US Bank's own lousy money market fund, obviously resulting in losses after the subtraction of various fees and expenses. However, these details and losses were concealed in the prolix and convoluted statements, and neither were any rates of return for the funds provided on the statements received in November of 2004. So, once again, we only discovered these problems through our own investigation and research. Indeed, we believe that the only reason that US Bank [secretly] divested from the First American Prime Obligations Fund in mid-August of 2003 was because the beneficiaries began asking more probing questions about the investments and actually filed those questions with the Court in mid-August. The timing hardly seems a coincidence, and we suspect that US Bank suddenly realized in mid-August, with the filing of those questions, that the beneficiaries were more on the ball and alert than US Bank had been assuming and presupposing.

Yet even as those questions were filed, they were never answered by US Bank, and the darkness continued from August of 2003 onwards through November of 2004, with US Bank secretly switching -- as we now know -- from the Prime Obligations Fund to other First American Fund investments until June of 2004, when it suddenly and inexplicably shifted the entire Trust back to the First American Prime Obligations Fund and a six-month US Treasury Bill -- again, making virtually nothing and racking up losses after fees and expenses.When interrogated about these illogical [and self-serving] actions, US Bank has tried to say that they were preparing to shut down the Trust; however, if one is trying to close out a Trust, you don't go out and purchase a 6-month, $125,000 Treasury Bill in June that is not redeemable until the end of November. And the fact is that US Bank knew that the Trust could not be closed-out for awhile longer, until pending litigation about the real estate assets was completed, and indeed, closing-out did not actually begin until mid-2005, once again, leaving the entire Trust invested in US Bank's own money market fund [apart from the 6-month treasury bill] for over a year, from June of 2004 through the middle of June 2005 -- to the detriment of the beneficiaries and the substantial benefit of US Bank.

Now, there are a whole host of issues and problems related to the June 2004 accounting statement, and we will be discussing those problems further on here. The one major issue is that there is strong evidence pointing to the fact that US Bank backdated transactions at the beginning of June 2004, in a seemingly deliberate attempt to defraud two of the beneficiaries of money [20,000+ apiece in a 60,000+ transaction] that would have been due to them had those transactions not been backdated and had US Bank abided by the terms of the Trust. We are quite confident in saying this because not only is it supported by our audit of the Trust accounting -- in which we assembled the transactions in their proper chronological order, even as they were all mixed-up on the statements -- but it is also supported by the US Bank trustee's own unwitting testimony during March of 2005, in which he observed that those kinds of transactions do not take place until after the passing of the income beneficiary. However, on the accounting statements, those transactions, interestingly enough, were dated only two business days before her sudden and unpredicted passing -- which suggests that either the US Bank trustee is incredibly psychic or else the transactions were backdated, especially since they weren't even supposed to be performed until after her passing and especially since there were insufficient funds for the various transactions that allegedly took place during that notable week in June and especially since the trustee had a quid-pro-quo incentive to backdate the transactions. Had a customer attempted those alleged transactions, they would have been denied the transactions due to insufficient funds. Yet, apparently, US Bank allows itself all kinds of magical accounting tricks, and then produces muddled statements so that noone can determine which way is up. After all, even the US Bank trustee himself was unable to explain the statements under cross-examination in March of 2005 and admitted -- on at least two different occasions -- that they were "confusing." And yet US Bank has never bothered, even as of the current date in 2006, to render those 2003-2004 statements in an intelligible manner -- which means comprehensively, chronologically and with carry-over balances and accurate, detailed returns and rates of return -- as specifically requested by the beneficiaries on several different occasions.

And, now, even the 2004-2005 accounting statements [finally received at the end of October 2005 after promised in June, July and September and repeatedly requested by the beneficiaries] -- while seemingly simplified -- do not provide any balances nor carry-over balances from previous statements nor explanations for the calculations of disbursements. By all appearances, it is as if US Bank simply pulled the disbursement numbers out of their heads -- indeed, in June of 2005, US Bank rounded the disbursements off to the thousands, as if it were incapable of calculating below the fourth digit, and then provided no accounting statements for those disbursements until October of 2005. In other words, US Bank rounded off the disbursements to the fourth digit, and then left the beneficiaries to guess for 4 more months how US Bank managed to arrive at such perfectly round numbers. And then even after receiving the misleadingly "simplified" accounting in October of 2005, US Bank still has not explained how they arrived at those magical disbursement numbers -- and there is no adequate explanation to be found in the 2004-2005 accounting statements. In fact, the only thing that we know for certain based upon those disbursement figures, is that the beneficiaries were badly ripped-off by US Bank throughout the three-and-a-half years that US Bank managed the Trust and that the beneficiaries have suffered substantial losses as a consequence of US Bank's combined actions with the Trust. That we can say with certitude.

Which brings us to the primary and most potent financial loss perpetrated by US Bank during their reckless mismanagement of our grandfather's irrevocable Trust and disregard for his beneficiaries' interests. As this website has documented in great detail, one of the central issues -- i.e., major problems -- has been that of the funding of the Credit Shelter Trust, which for all practical purposes and based upon 2001-2002 tax documents, was already funded with land real estate and with a percentage of investments, as planned for and anticipated by our grandfather in his establishment of the revocable Trust in 2000. Indeed, contary to US Bank's recent misrepresentations, the farmland was already in our grandfather's revocable Trust at the time of his passing, and then indisputably remained in the irrevocable Trust after his death -- that is, until the US Bank trustee and a rogue beneficiary began scheming its potential removal as part of a quid-pro-quo deal that would mutually benefit US Bank and the rogue. [Now would be a good time to note the Iowa and National Trust Codes mandating impartiality and loyalty on the part of trustees. Based upon our experiences, though, US Bank has a long ways to go in terms of understanding the implications of those Codes for its own conduct and behavior. During the three-and-a-half years that US Bank managed our grandfather's Trust, US Bank behaved as if it had never heard of those Codes and was not obligated to any of them, even as all financial institutions are required to abide by them.]

Now, as we have also previously noted on this website, farmland real estate was our grandfather's prized possession -- as it would be for mostly anyone who had watched his father lose all of his land real estate during the Great Depression and who would perseverate on the value of each parcel of land that his father had lost for the remainder of his life. Simply put, our grandfather established his Trust and his wife's companion Trust for the purpose of protecting the farmland real estate and passing it on to all of his children/beneficiaries, who were represented equally and impartially in his Trust documents. For every stated intent and documented purpose, the farmland real estate was supposed to remain in the Credit Shelter Trust -- after all, it was and still is the most aggressive and lucrative asset of all of the assets that were in the Trust -- and one would have to be financially stupid to want to dispense with the most aggressive and lucrative asset when funding a Credit Shelter Trust. Indeed, a trustee is expected and required to act in a manner that preserves the most profitable and aggressive assets of a Trust for all of the beneficiaries, impartially taking all of their interests into account. However, in the case of our grandfather's Trust with US Bank, US Bank refused to adhere to this requirement -- in a manner similar to how it refused to adhere to the requirements of timely, annual accounting reports and failed to adequately respond to the beneficiaries' requests for basic financial information about the Trust, even as it is required by law to do so.

And it wasn't as if managing the farmland should have been beyond US Bank's capacity since it advertises itself as possessing skilled expertise in farmland management and would not have been entrusted with this Trust by the beneficiaries in the first place had it not been for the case of that [misleading and deceptive] advertising. In fact, US Bank would not have even had to have "managed" the land real estate in order for it to have continued growing in value faster than the other assets in the Trust; that is to say, the land did not even need to be farmed for its value to have increased, although the annual income from the farmland was only more reason to keep the land real estate in the Trust. Yet instead of acting rationally/prudently and preserving this most aggressive asset for the Trust and for each of the beneficiaries, suddenly, in February 2003 -- nearly a full year after the US Bank trustee had been appointed -- the US Bank trustee wrote a letter -- again, out of the blue -- advising that he intended to take the farmland real estate out of the Trust. You can be sure -- as we are sure -- that this was not a decision that the trustee arrived at on his own nor impartially, given that he had had private meetings/teleconferences with the rogue beneficiary and the rogue beneficiary's attorney in January, as we have since determined, and beforehand throughout the previous year [2002]. As the details have emerged, this decision on the part of the US Bank trustee had little to do with his disingenuous and self-serving claims [as represented in his letter] that it would be "administratively inconvenient" to manage the farmland as a divided or half interest -- after all, the income beneficiary of that half interest [the half in our grandfather's Trust] was the exact same person as the owner of the other half interest [the land that our grandfather had placed in our grandmother's name in the 1990's for the sole purpose of protecting the land from estate taxes since she was never involved in the farming], rendering circumspect and dubious at face value any arguments about "inconvenience" due to "divided interest."

In fact, the only reason that our grandfather divided his farmland into two parts was to protect against estate taxes -- the very taxes that would be incurred by taking the farmland out of the Trust. And yet here was US Bank undermining his stated intentions in dividing his farmland and even offering that artificial, meaningless division as a bogus excuse [read: lie] to dispense with the farmland from the Credit Shelter Trust [the part of the Trust that is reduced to 675,000, per the 2001 law.] Of course, by taking the farmland real estate out of the Credit Shelter Trust, that meant deeding the farmland over to our elderly and infirmed grandmother, who, at the time, was under the undue influence/isolation of the rogue beneficiary who wanted the farmland all to himself and who had already schemed to have our grandmother's Trust destroyed and a new Will drafted entirely in his own favor after our grandfather's passing in 2001. Thus, by transferring the farmland out of our grandfather's Credit Shelter Trust and to our grandmother, US Bank was actually doing a major financial favor for the rogue beneficiary and assisting him in his scheme -- which was essentially to defraud the other beneficiaries. By all appearances, the US Bank trustee letter in February of 2003 had nothing to do with "administrative inconvenience" -- except for the laziness of the US Bank trustee -- and had everything to do with US Bank unethically involving itself in a calculated scheme by one rogue beneficiary and his attorney to defraud the other beneficiaries of the most valuable assets in the Trust -- not only the farmland real estate but the other investment assets, as well, since when US Bank "funded" the Credit Shelter Trust [even as we insist that it was already technically funded in 2001], US Bank left the entire Trust invested in a lousy money market fund. It doesn't get much more fraudulent than that.

After all, if you had to choose between an asset that increased, on average, at a rate of 20% per year [and not even counting income beyond that], an asset that was guaranteed to generate between 5.25%-7.50% per year [without any fees], or an asset that only made an average of 0.78% [.0078] before additional fees, which asset would you choose? Well, US Bank entirely chose the final option, and it doesn't get much more fraudulent than that, i.e., when a bank trustee -- obligated to protect the financial interests of the beneficiaries -- has a choice between assets and yet chooses the worst asset by far and funds the entire Trust with that lousy money market fund [making an average of 0.78% before fees in 2003 and a fund owned by US Bancorp itself] and then that trustee conceals that decision in pages of convoluted accounting and then doesn't even give the beneficiaries the accounting statements that contain that concealed decision until 19 months later. Indeed, doesn't even openly disclose the decision to fund the entire Trust with a lousy money market fund when he does those statements 19 months later, and instead, leaves it for the beneficiaries themselves to have to do an extensive audit of the convoluted statements in order to discover this fraud against their financial interests. And it was a fraud on the part of US Bank because not only did US Bank entirely ignore their financial interests and assist the rogue beneficiary in his scheme in this case, but also because US Bank has financially benefited from the scheme by an obvious quid-pro-quo deal whereby the bank struck a deal to manage the funds that were being taken out of the Credit Shelter Trust. In other words, US Bank didn't give a damn about the beneficiaries' interests -- and we can say this as a fact because the numbers support the comment -- rather, US Bank only cared about making more money off of the assets that were being taken out of the Trust, to the beneficiaries' financial detriment and loss. That was no less than unethical and self-dealing, especially when the Trust code mandates neutrality on the part of the trustee and forbids against self-dealing.

And we don't think that it is insignificant to note, either, that the beneficiaries who were ripped-off here by US Bank were women. We believe that gender discrimination had a key role to play in the US Bank trustee's willingness to go along with the rogue beneficiary's scheme to defraud them, especially since unlike with the rogue beneficiary, who is male, the women beneficiaries were constantly left in the dark about the Trust and were not invited to nor included in some meetings about the Trust and generally were left out of the informational loop, meaning that they had to constantly ask for information about the Trust when it wasn't offered up to them. The whole scenario seeemed quite similar to an old boy's club doing favors for one another -- only such favoritism is in violation of the Trust Code in this instance. And even as our elderly grandmother may have been ceremoniously included in a few of those meetings, there, too, they were using her in a puppet-like manner since she had been diagnosed in 2002 as incapable of making any major financial decisions on her own due to the status of her frail and declining health -- which was blatantly obvious from her outward appearance so there was no way that US Bank could not have recognized this and should not have been much more careful -- and likewise, US Bank had been informed as early as March of 2002 that there was undue influence and isolation going on, and yet US Bank ignored those warnings, too, and played along with the rogue beneficiary's scheme, even disingenuously pretending in that letter from February of 2003 that our grandmother was actually making decisions about the farm when that had never been the case and especially was not the case given the status of her health as a long-term dialysis patient. In other words, the US Bank trustee pretended -- yes, pretended -- to address her [in the letter and for purposes of display] like she was a functioning business woman when she had actually never participated in the farm business and she certainly wasn't in the capacity to be doing so in 2002 or 2003. And there was no way that the US Bank Trustee did not know that she was incapacitated from making decisions at the time. So, the letter addressed to her in February of 2003 was all part of the ruse and part of the scheme, i.e., to make it seem like she was functioning when actually, US Bank, the rogue beneficiary and the rogue beneficiary's attorney were making all of the decisions and advocating for the removal of the farmland for their own selfish purposes.

And let us note this in response to US Bank's anticipated arguments: US Bank was by no means -- and contrary to any of its twisted claims -- an "innocent bystander" or a "victim" to a family "conflict" in this instance -- because 1) two of the beneficiaries repeatedly petitioned and requested that the Trust be given to a different bank to manage yet US Bank refused to step aside and turn it over to another bank. If US Bank was actually a "victim" here -- as it has disingenuously suggested on a couple occasions in response to this website -- then it would have turned the Trust over to a different bank, as the beneficiaries were requesting that it do. Yet US Bank refused to do so -- which can only tell you that the bank was by no means a "victim" but was, to the contrary, profiting from the situation. The true victims here, by far, are the beneficiaries. 2) there was no "conflict" here beyond the elaborate and greedy scheme to break the terms of our grandfather's Trust agreement and defraud two of his beneficiaries. Not to mention that in instances where there is "conflict" with a Trust and between beneficiaries, trustees are obligated by the Trust Code to maintain neutrality, and that was certainly not the case here with US Bank. 3) US Bank had the option at every stage to simply leave the Trust operating as it had been when they were first appointed -- indeed, it was operating far more profitably before US Bank was appointed than after their appointment. So, had US Bank simply left everything alone and as it was intended, and had US Bank not advocated for the removal of the farmland real estate beginning in February of 2003 and had US Bank provided timely, complete and accurate accounting statements and had US Bank not sold out of all of the original investments and replaced them with their own proprietary mutual funds, none of this would have happened and this website would not even exist. So, US Bank only has itself to blame for what they did to our grandfather's Trust and to his beneficiaries, and it is US Bank who is responsible for all of these problems represented on this website. As we originally stated when the website was first created in August of 2004, a website such as this one only comes into existence at the point when a corporation has repeatedly failed to adequately respond to its clients' concerns.

You see, not only was our grandfather a farmer by nature, but he was also a consummate, shrewd and, most of all, ethical businessman who -- again, after surviving the Depression and like many from that era -- saved virtually every dime and lived frugally and conservatively throughout his life. He lived a very modest, humble life, while building-up a multi-million dollar estate. And we can say -- again, with certitude and plenty of supporting evidence -- that he would be absolutely appalled at what US Bank has done to his financial legacy and to his family, particularly to his daughters -- who are professional business women themselves. To be rather blunt, US Bank has cheated them out of a substantial amount of money over the past three and a half years. We can also guarantee that he would be appalled to watch his hard-earned money thrown away at attorneys whose services would not even have been necessary had US Bank simply abided by the terms of his Trust or even abided by the tax documents prepared by our grandfather's original and chosen Trust attorney [who US Bank terminated and replaced with their own favorite attorney -- who then assisted US Bank in concealing its deceptions yet who still took his payments out of the Trust, basically meaning that the beneficiaries had to pay the US Bank Trustee attorney to rip them off. Indeed, the US Bank Trustee attorney made far more off of the Trust than the beneficiaries did -- which, again, was nothing.] And, most of all, he would be appalled to know that US Bank advocated for the removal of the farmland from the Trust -- which defied basic common sense and financial prudence -- and sold all of his original investments -- essentially undermining his estate planning in the process -- and then repeatedly refused to account for its damaging actions. And make no mistake about it, US Bank took financial advantage of a situation wherein his elderly and infirmed widow [our grandmother] was incapable of comprehending financial matters related to the Trust. US Bank seemed to assume that neither she nor the other beneficiaries would ever audit the convoluted accounting that US Bank provided -- well, the bank's assumption about no audit turned out to be plain wrong, as this website attests -- and we can only guess at how many other elderly beneficiaries have been similarly ripped off by this bank. Needless to say, our grandfather has to be spinning around, and ours is a cautionary tale for other families who would even contemplate entrusting their financial legacies to this bank.


The update of this website will be ongoing over the course of the next month [June-July -- an update is on the way] as we find the time to update the entire site. Most importantly, we have more recent information from this past year and from the 2004-2005 accounting to put up on this website; however, one of the major hindrances at this stage is that US Bank has yet to explain the balance-less accounting statements from October of 2005 and has yet to demonstrate how it arrived at the final disbursement numbers. And there are numerous other questions and issues that US Bank is evading right now. In fact, we are not so sure but that a remedial mathematics course might be in order for certain US Bank executives given what the beneficiaries just received in the mail.


The old front page of this website is linked here. If you follow the link, there are many more financial details posted there. All of the information and material there will be reincorporated into this site on an ongoing basis. Again, our objective here is both to make the numerous problems/headaches caused by US Bank crystal clear and to reorganize after adding to this website on an ad hoc basis ever since it was first created in 2004. If you have any questions, you can reach us at



Disclaimer: Obviously this website has no affiliation with US Bank nor US Bancorp. This website simply seeks to speak the truth of our family's experience, per the First Amendment.


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