SHOULD I HIRE A TRUST ADMINISTRATION LAWYER IF I’M THE TRUSTEE? – One of the most popular additions to a comprehensive estate plan is a trust. Though once used primarily by wealthy families as a way to shelter, control, and pass down their wealth, trusts are now commonly found in the estate plan of the average person. Trusts have evolved to the point where there are numerous specialized trusts that focus on accomplishing very specific estate planning goals. All trusts, however, require the same basic elements for creation. One of those is the appointment of a Trustee. If you recently found out that you were appointed the Trustee of a trust that is now active, you may not be sure where to start if this is your first time serving as a Trustee. One of your first concerns after finding out you are the Trustee may be whether hiring a trust administration lawyer is necessary or not.
A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, who transfers property to a Trustee appointed by the Settlor. The Trustee holds that property for the trust’s beneficiaries. Trusts are broadly divided into two categories – testamentary and living trusts. A testamentary trust is one that does not activate until the death of the Settlor whereas a living trust takes effect as soon as all the formalities of creation are complete. Living trusts are then further sub-divided into revocable and irrevocable trusts. A testamentary trust is also revocable because it is generally triggered by a provision in the Settlor’s Last Will and Testament, making it revocable up to the point of the Settlor’s death.
Trustee Duties and Responsibilities
The duties and responsibilities of a Trustee are numerous and varied. Unfortunately, people often fail to realize exactly how complex the job of a Trustee can be. Consequently, many Settlor’s also fail to spend the time necessary to choose the right person for the job. Some of the most common Trustee duties and responsibilities include:
- Managing and investing the trust assets using the “prudent investor standard.”
- Administering the trust according to the terms and provisions created by the Settlor unless one of those terms is unconscionable or illegal.
- Communicating with beneficiaries and keeping them apprised of trust business.
- Making discretionary decisions with the trust purpose in mind.
- Distributing trust assets according to the terms of the trust.
- Keeping detailed records of trust business.
- Preparing and paying any taxes owed by the trust.
How Can a Trust Administration Lawyer Help?
Many of the duties and responsibilities of a Trustee require the Trustee to have at least a basic understanding of the laws relating to trusts and estates. Some financial expertise and experience is also helpful. A Trustee who makes trust decisions without the necessary legal and/or financial knowledge necessary to make those decisions can make costly mistakes. Under certain circumstances, a Trustee can even be held personally liable for those mistakes. With all of that in mind, it only makes sense to retain the services of a trust administration lawyer to help you administer the trust if you have been named as Trustee – particularly if this is the first time you have served as a Trustee. A trust administration lawyer can help you in a number of important ways. Without a doubt, the most important reason to work with a trust administration lawyer if you are the Trustee is to ensure that you understand, and abide by, the laws governing trusts and Trustees. Typically, the trust funds will cover the cost of professional services, making it affordable as well for you to consult with an experienced attorney.
If you have additional questions or concerns about serving as a Trustee, or if you would like to consult with an experienced trust administration lawyer, contact the experienced California trust administration attorneys at The Hayes Law Firm by calling (626)403-2292 to schedule an appointment.
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