The jig was up for Edward Miller.
In 2014, the then 58-year-old attorney in New York was named the trustee of a trust belonging to someone known only as “M.P.” in court documents. Inside the trust were real estate assets, including a commercial building in New Canaan, Connecticut, that M.P. instructed Miller to manage.
With his new legal authority, Miller did as he was told, collected rent from tenants, oversaw the building's maintenance, paid bills, and distributed funds accordingly. For this, he was paid 5% of the total monthly rent and commissions from new-tenant leases and renewals. But that wasn’t enough for Miller.
In 2016, the trustee started skimming from the top, making unauthorized withdrawals and transfers from the trust to himself, his law practice and some of his relatives. Then, when M.P. died in 2022, he lied to M.P.’s beneficiaries about the trust’s assets. Miller had embezzled more than $500,000.
Last month, facing the Federal Bureau of Investigation and the U.S. attorney for the District of Connecticut, Miller pleaded guilty to wire fraud before being indicted. He has since been released on a $200,000 bond pending his sentencing scheduled for August 13.
The former trustee has already paid restitution of $509,372.82 as part of a settlement in a civil lawsuit filed by the beneficiaries of the trust—a much better financial recovery than many victims of similar fraud receive.
Trust companies, foundations and family offices have errors and omissions insurance and other policies if their employees do wrong. But historically, organizations could do little to explicitly protect themselves financially from a nefarious trustee like Miller, at least until now.
Last week, the Marsh McLennan Agency launched what it says is “first-of-its-kind” trustee crime insurance that offers family offices and other high-net-worth clients protection for theft committed by trustees.
MMA and other insurance companies have long offered coverage for employee theft. But independent trustees, who could have as much or more accessibility to assets that don’t belong to them, might not be subject to the same governance and oversight. That delineation made it hard for insurers to develop products to protect against a loss.
“There was no solution previously,” Seth Spreadbury, national family office executive liability leader at MMA, told Modus. “This is the only way to actually transfer that risk of financial loss to someone else. If someone's stealing money, and they're leasing cars, and paying for vacations, and funding their gambling habit—great [that] you discovered they stole it. But how are you going to get that back?”
MMA’s new Trustee Crime Insurance Solution has been in the works for years, Spreadbury said. The idea for it came from conversations with clients (MMA works directly with over 120 family offices in addition to multifamily offices and other clients). While the number of family offices continues to grow and they become wealthier, which means their risk of loss is greater, at least in dollar terms, those weren’t reasons MMA finally made the decision to offer the theft coverage for trustees. According to Spreadbury, his clients wanted something like the policy, and it takes time to collaborate with insurance carriers and bring any new product to market.
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The new product is a surety bond. Spreadbury said the annual premium for $1 million of coverage will cost roughly $4,000 to $6,000, depending on the client. A family office, for example, would pay the premium, not the trustee covered. MMA is offering up to $10 million in coverage.
Even for family offices, a $10 million limit should be adequate. Trustees might not have access to all of a family's assets and some assets are much more difficult to steal than others. Most thieves also try to steal smaller, less detectable amounts of money or items.
“The underwriting, frankly, is not too intense. It's obviously a little bit about who you are. Have you had a history of fraud? They do look at the composition of the assets and the trust. If it's just all hard assets, if the trust owns a house, not a lot of need for theft insurance. It's difficult to steal a house. But the more liquid the assets, the more exposure exists. We're also looking at oversight and reporting. How frequently are we reporting to the beneficiaries, or the settler or grantor? Is there a co-trustee involved?” Spreadbury said.
Michelle Hirsch, co-president of Brunswick Companies, a risk management and insurance advisory firm, said the trustee theft coverage could be useful to some family offices. Hirsch founded the company’s private client division dedicated to family offices and high-net-worth individuals.
"The biggest mistake affluent families can make is assuming an insurance policy will simply fix the problem. The best advisors start by understanding the exposure, strengthening the controls around it, and then determining whether insurance is the appropriate final layer of protection. Trustee fraud is a real exposure, but it's often better prevented than insured. Before discussing a policy, I'd want to understand the governance structure, oversight, independent accounting, and the checks and balances already in place," Hirsch said.
MMA’s new insurance has been well-received, according to Spreadbury, and he’s optimistic about its commercial success. Beyond single-family offices, many thousands of people and organizations have independent trustees. “We think it potentially should become a staple of estate planning,” he added.
To trust and estate attorney Frazer Rice, a partner and the head of family office services at Next Capital Management, the new insurance policy is recognition that the risk of trustee theft persists and could be worsening.
“This is an interesting turn on trustee liability as it reflects a different sort of risk that is becoming more prevalent: trustee bad acts,” Rice said. “It’s an intriguing statement on the risks associated with the [ultra-high-net-worth] space, the need for checks and balances, and the perceived limits in being able to ‘monitor and control trustee activity’ before it’s too late and damage has been done.”
More News
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- LAST CHANCE: The 2026 Botoff Consulting single-family office compensation survey ends today. Your confidential participation helps you, and hundreds of others who have already completed it, benchmark compensation in an industry with scant data. Complete the SFO survey here. Botoff Consulting also has a new MFO survey, if you work at one of those.
- Speaking of venture-backed, family-office software… Asseta launched its MCP this week.
- AI budgets are growing, but the benefits aren’t. A Bain & Company survey found that 951 global companies were targeting 11% to 20% cost savings by using AI, but 40% said their savings were between 0% and 10%. Still, 90% are increasing their budgets again, largely for AI agents, Bain says.
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- Urs Wietlisbach, one of the billionaire founders of Swiss private equity firm Partners Group, is carving out his own unit within the family office that has managed the founders’ fortunes for over a decade, Bloomberg reported.
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Jobs
- Petrus Trust Company, which serves as the investment office for the Perot family, is hiring a senior accountant in Dallas, Texas.
- The Dalio Family Office is hiring a senior accounting associate in Westport, Connecticut. Total cash comp is $200,000 based on experience and a merit-based bonus.
- Rex, the privately held ecosystem of entrepreneurial ventures led by Peter Rex, is hiring an asset manager in Austin, Texas, who will be responsible for a multifamily real estate portfolio of 2,000+ units and for scaling the business to over 30,000 units. No salary details were listed.
- An anonymous single-family office in Boston needs a chief of staff and is ready to pay. Salary for this hybrid role is $350,000.
- Another anonymous SFO in New York City is hiring an investment analyst.
- And an SFO in Rye, New York, is hiring a director.
- Bessemer Trust CFO Allison D. Heilborn is looking for an executive assistant in New York City. Salary is $140,000 and there are other benefits.
- UBS’s family advisory & philanthropy services group is hiring a senior strategist in New York City. Max salary is $173,000.
- Wilmington Trust’s Family Wealth Division is hiring a wealth management senior associate in New York City. Salary for this hybrid role is $174,500 and they strongly prefer a lawyer for the job.
- Asseta is hiring a head of implementation in New York City. Salary is $180,000 and this person is eligible for equity in the startup. They also get “unlimited paid time off.”
- Luminary is hiring a product lead. This remote job pays $230,000 and may include “meaningful equity.”
- This is an interesting one: The Daily Upside, a media company with popular finance newsletters, including Advisor Upside, one for private wealth managers, is launching its own RIA and hiring a lead financial advisor. “We have over one million retail investors subscribed to our flagship publication and a proven ability to drive qualified leads to advisory businesses,” the job posting says. (No judgment here; they are friends of Modus. But Modus will never do this.)
- Not a family-office gig, but a very cool allocator job: Ivy Invest, a VC-backed fintech firm (with founders who have managed multibillion-dollar endowment portfolios and founded multiple companies with 9-figure exits) that has built an endowment-style investment platform, is hiring an investment associate.
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- Back in Akron next month, eating Swenson’s (IYKYK).
