Interview with Chuck Ranson, Expert Witness in Wealth Management, at Charles W. Ranson Consulting, Inc.

What kind of cases have you been working on?

Well, since 2011, I have worked on over 30 cases dealing with breach of fiduciary duty. This can involve duty of impartiality, the duty to account, or duty to diversify. But also the fiduciary duties of loyalty, candor, and fair disclosure.

I have also rendered opinions in cases involving challenges to the amount of a trustee’s fee. In so doing, I have been engaged by both plaintiff and defense counsel.

Where do you normally get your expertise requests from?

In the past five years I have received over 150 inquiries from plaintiff or defense firms seeking my expert services, and I have chosen to accept only 30 cases. You should know I’m very selective of the cases I choose to work on and I carefully analyze the facts of each case before determining whether I can be of value in the case. Whether I’m retained by the defense firm or the plaintiff firm, my opinions are based entirely on the facts and evidence within the case file and bolstered by my education, training, and experience.

Can you give us an example of this?

Sure. Let me illustrate this selection process. In 2013, I was engaged by the law firm of Foley and Lardner in Orlando, Florida, which represented the trustees of the Robert Rauschenberg Trust.

At issue was the determination of reasonable trustee fees under the circumstances. In this case, the trustees were seeking between $25 and $55 million in trustee fees, while the beneficiary foundation thought that a fee of less than $350,000 was reasonable.

In Florida the reasonableness of a trustee’s fee is based on the 1958 Supreme Court ruling in “Florida West Coast Hospital Association v. Florida National Bank”. In that case, the Florida Supreme Court held that in determining reasonable trustee fees, 11 factors must be considered in order to determine whether the trustee’s fee is reasonable given the circumstances.

At the time of Mr. Rauschenberg’s death, his estate was valued at between $800 million and $900 million, which included his intellectual property. The trust agreement appointed 3 trustees to administer his estate and trust for the beneficiary, a non-profit – the Rauschenberg Foundation and Museum.

Given the economic circumstances of 2008 to 2009, most hard assets fell in value. However, between 2010 and 2012, the trustees selectively organized events to showcase Rauschenberg’s works in cities such as New York, Paris and London. By 2013, the trustees had turned over all of the art and assets to the Foundation and Museum and the art was reappraised and valued between $1.9 and $2.3 billion.

In applying the 11 factors articulated by the Florida Supreme Court, and based on my professional experience as a trust banker at Bank of America, J.P. Morgan Chase, and Atlantic Trust, I opined that reasonable trustee fees amounted to between $35 and $55 million. After hearing my testimony, the Lee County Probate Court Judge ruled that the trustees were entitled to $24.6 million in fees. In his written opinion, the judge thought my range of fees probably included the profitability of a corporate trustee. In this case I wrote an expert report, was deposed by opposing counsel, and testified at trial.

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