Administering A Trust Can Be Risky

Aunt Elizabeth has a son Charles.  He’s not good with money, has a problem with drugs and has an ex wife who’s out to get him. She has asked you to be trustee of his trust after she dies and you have agreed.

That may have been your first mistake! All too frequently I hear about family relationships being destroyed by putting someone in control of another’s money. Sometimes this is a result of the poor management of an estate or trust. Sometimes the stories pertain to unforgivable conduct. However, jealousy and greed can sour family relationships regardless of the management of estate property. That’s why we recommend professional trustees.

However, some trusts are not large enough to warrant a professional and the costs involved. Plus, you have agreed to take on this responsibility. This is what to do to try to make it work:

• A trustee accepts fiduciary duties to act in the best interests of the beneficiaries. These duties include the duty to manage the Trust property prudently and to account to each of The beneficiaries at least yearly. When a Trustee violates his or her fiduciary duties, the Trustee can become personally liable. It is essential to know how these rules work.
• Hire professionals like brokers, attorneys, accountants etc. to oversee your decisions.  This will avoid mistakes and also give more legitimacy to the decisions made.
• Keep excellent records. Again, the use of professionals is warranted not only to keep good records- but to advise you of the best way to keep records yourself.
• If possible, have a talk with of Aunt Elizabeth, before she dies so that you can follow her wishes and accomplish her goals. The more all the parties talk, the less chance of a misunderstanding.

My suggestion is that you think long and hard before agreeing to be a trustee. However, if you follow the instructions, above you limit the strife. And you can take a trustees’ fee.

Feel free to contact our South Florida office at 954-726-6602

for all your estate planning and long term care needs.