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Attorneys & Fiduciaries hid Legal, Accounting, Securities and other Records from Trustees

Nashville, Tennessee­­ | Team Reporting by SPF

Tennessee is now the only the only state in the nation that allows attorneys and financial principals to hide and destroy legal and financial records from others involved in a legal and financial transaction.

Tennessee’s appeals court has upheld a lower-court ruling in a breach of fiduciary duty case involving the accountings for an estate out of Williamson County. The ruling wipes out centuries of black-letter law and makes it legal in Tennessee for attorneys, bankers, brokers, realtors and other fiduciaries to hide legal and financial records from clients, beneficiaries—and the courts.

The original ruling was made by Judge James G. Martin in a claim involving the accounting for an estate and trusts based in the small town of Leiper’s Fork.

At the federal level, and in all other states, if an attorney or fiduciary hides or destroys legal and financial records, or hides records from their client-beneficiaries, it is considered a breach of fiduciary duty, fraud and/or obstruction of justice.

The ruling from Tennessee’s courts is a seismic shift in their laws and alters what people can expect from the legal and financial professionals they employ—and are subject to—when doing business in the Volunteer state.

A DRILL-DOWN: BIG NAMES TIED TO A SMALL CASE

The case was a simple one with a common theme: The widow of a Tennessee man wanted more money than she had agreed to when she signed the pre-nuptial with her spouse. To get more money, the widow teamed up with her attorney to hide and destroy the records of those assets from the man’s sons, who were trustees and beneficiaries of the estate.

Court records show that the estate itself was relatively small, with less than $200,000 subject to probate. (Many of the family’s assets had been placed into trusts.) More