Most of our clients soon learn that proper trust management requires a substantial amount of their time and attention to detail. Meetings or communications with beneficiaries to resolve problems and explain the workings of the trust can be time consuming, challenging, if not downright exhausting. Beneficiaries may have conflicting interests which require delicate communications, negotiations and analysis. There may be a need to manage, inspect or supervise the trust assets, such as income producing property. Amid all these duties, trustees have an affirmative duty to keep accurate records and keep the beneficiaries reasonably informed of the trust and its administration. We at East Bay Probate and Trust Administration can help you navigate the administration of your trust, handle communications between beneficiaries and trustees, and if necessary, provide expert legal support to have all parties come together to help them understand the trust document and resolve their differences.
What are some of the challenges facing a trustee? Perhaps a husband creates a trust but fails to mention that his surviving wife is to be of primary importance when making discretionary distributions. Sometimes it’s common for a trustee to feel closer to one particular beneficiary, especially a relative or someone with whom the trustee has a close personal or professional relationship. Often, a trustee’s duty of impartiality is questioned because of sympathy with the plight of an individual beneficiary who lacks financial resources. Sometimes a beneficiary wants to use the family home without paying rent. Regardless of the circumstances a trustee can find themselves in, we can help you navigate these difficult waters and offer a buffer between you, the trustee and the beneficiary seeking more trust benefits.
All co-trustees must act unanimously, unless the trust provides otherwise. When two or more persons exercise trustee powers, practical and legal problems may arise from the manner in which these powers are allocated. What happens when co-trustees disagree? One alternative is for the dissatisfied co-trustee to simply to resign as co-trustee or, taking a more aggressive policy, petition the court to remove the other co-trustee. Speaking of removing a co-trustee, beneficiaries may seek the removal of a trustee for a variety of reasons including failure to administer the trust properly such as exhibiting a lack of care, impartiality, or in the worst of circumstances, self-dealing when administering the trust. There may also be instances when the trustee is unfit to administer the trust because the trustee lacks the necessary capacity to manage the trust. East Bay Probate and Trust Administration has over 25 years of litigation experience and know-how to help you resolve your trust problems or as a last resort, petition the court and make a persuasive argument as to why a trustee should be removed.
What should a trustee do about stocks and bonds? We often recommend hiring an investment manager on a fee basis, making sure the broker is insured and leave only amounts with the broker that are within his or her insurance limits. We have several trusted brokers and institutions who we recommend for our clients.
What about real property? The trustee has the usual fiduciary duty to use care, skill and caution in analyzing both the role of real property in the trust’s overall portfolio as well as considering the risk-reward trade-offs involved. The trustee must weigh the special problems and extra risks that can occur with real estate investments. Our association with real estate and insurance agents, brokers, property managers and appraisers brings to you a team effort to help you deal with the challenges in managing trust-held real property.
Other issues that may arise in your management of your trust include evaluating creditors’ rights, preparing estate tax returns, being mindful of a beneficiary’s creditors, marshaling assets and understanding liabilities, reviewing the powers given the trustee by the trust document, and considering what options you may have, as trustee, at your disposal. Our attorney and CPA can make your duties manageable with our intent to put the challenges of trust management on our shoulders, not yours.
Should you wish to hire East Bay Probate and Trust Administration to educate, advise and assist you in the administration of your trust, we can arrange to meet and discuss the trust, your concerns, and a create a road map of how you might proceed. Concerned about payment for such services? Standard provisions in most trust documents allow the trustee to hire experts like an attorney, CPA, appraiser, bookkeeper, etc. Without specific limiting language, the cost for legal and accounting fees are usually relegated to “reasonable compensation” and is paid for by the trust.