Trusts are popular additions to many estate plans. Trusts can often be used instead of or in addition to a will to distribute assets and wealth efficiently. When a trust is used, the creator of that trust is required to appoint someone to be the Trustee. If you are a new Trustee, you may not be entirely sure where to start regarding trust administration and adhering to your new responsibilities. If this is the case, The Millman Law Group can help you navigate the process expertly and help you avoid the following mistakes that can lead to numerous costly headaches.
Trying Trust Administration Alone
Generally, a Trustee is responsible for managing and protecting the trust assets according to the terms created by the trust creator. The first mistake you may make during trust administration is to try to go it alone. Trust administration involves complex legal and financial concepts, so it’s best to work with an experienced attorney at The Millman Law Group who can explain these concepts. Working with an expert is best for the trust beneficiaries and you, as you can be held personally liable for mistakes you make when attempting to administer a trust alone.
Violating Your Fiduciary Duty
As the Trustee, you have a fiduciary duty to the beneficiaries of that trust. This means that you put their best interests first when making decisions about the trust assets. To do otherwise violates your duties and can even lead to legal action against you.
Conflicts of Interest
Rather than appointing a family member or friend, many people choose to appoint a professional Trustee to avoid potential conflicts of interest. If you are personally acquainted with the trust’s beneficiaries, make sure you avoid creating a conflict of interest because of your close relationships. Keep your role as a Trustee separate from your personal relationships.
Failing to Keep Detailed Records of the Trust Administration
A Trustee is required to keep detailed and thorough records of all trust business. A common mistake is that the Trustee fails to take this requirement seriously because the trust is relatively informal. However, you never know when a trust may be involved in litigation. For this reason, it’s best to keep detailed and accurate records.
Failing to Understand Compensation
A Trustee often has to put a considerable amount of time into working on trust duties. It makes sense then that the Trustee is entitled to compensation for their time. However, as a Trustee, you may be reluctant to bring up the issue of payment with the creator or beneficiaries of the trust, especially if you are close to them. If you are concerned about compensation, you should bring it up at the beginning before problems or miscommunication occurs down the road.
Estate Planning Made Easy With Millman Law Group
Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.