If you have been appointed as the trustee of a loved one’s trust, you may feel overwhelmed with the responsibilities imposed upon you. Don’t panic, we can help! However, consider the following mistakes commonly made by trustees so you can be sure to avoid them.
Failure to maintain proper records
A trustee is obligated to provide regular accountings to the beneficiaries of the trust. In order to do so, it is important to maintain records of the trust’s income, property held by the trust, and any distributions made out of the trust.
Failure to give notice of intent to administer the trust and send copies to all entitled under the law
Trustees are required to give timely notice to all interested parties. The notice must provide specific pieces of information, including where the administration of the trust will take place and that beneficiaries can request a copy of the trust document.
Failure to understand liability
While it is an honor to be appointed as a trustee, it is also a burden that exposes you to legal liability. Many trustees believe that family members will not sue them, but money does crazy things to people. Thus, trustees should retain a seasoned trust administration attorney to assist the trustee. Typically the trustees lawyer is paid from the funds of the trust, so there is no reason for a trustee not to obtain advice, guidance and legal protection.
Failure to understand “salary” for services
Many trustees expect to be paid a handsome fee for their services to the trust. This is not always the case and it can often be difficult for a trustee to be paid since beneficiaries have the right to object to payment requests. A wise trustee negotiates his/her fee early in the process.
If you have been appointed to administer a trust, you are responsible for completing several tasks, and there is little room for error. Don’t despair. We have helped hundreds of people in your situation. Just call to schedule your no-cost consultation: (714) 963-7543. We can minimize your stress, reduce exposure to personal liability and guide you through an orderly process.