Have you been named as successor trustee of a trust? Perhaps your parents have been persuaded that they should create a “living” trust as part of their estate plan, and they have selected you as the person to wrap up the trust when they both die. Maybe your sister or brother has identified you as the person to handle their kids’ funds in the unlikely event that they die before the kids are old enough to take care of things themselves. Do you know what the job entails?

Probably not, and not because there is any deficiency in your education or understanding. It is easy to find literature, seminars, self-help programs and online information about the benefits of living trusts. It is quite a bit harder to locate information about how to be a trustee.

We have some modest offerings online (including our "Now You Have a Trust" brochure and the seminar outline from our popular 'Trust School"). We also provide some quick tips here. None of these are intended as a substitute for good professional advice, but they might give you some insight and ideas about questions to ask.

Do you have some experience — good or bad — with books, seminars or other resources on how to act as a trustee? We’d love to hear from you, so that we can pass along the positive experiences and help warn other trustees about the negative ones.

Some tips for successor trustees:

• Keep track of your time. You may have no intention of charging a fee (family members often serve as trustee without payment), but there are a myriad of circumstances where it might later be important to know how much work was done. It is easy to throw away the information if it turns out you didn’t need it, but hard to reconstruct it if you do.
• Remember: it’s not your money. The trust beneficiaries are entitled to fair treatment and a full accounting. This is not an opportunity to settle old scores, and certainly not a chance to prove which child mother always favored.
• Keep receipts. That might seem like the most obvious of recommendations, but it is surprising how often trust administration problems arise because there is no indication of why even a modest check was written to, say, a grocery store.
• Related to the need for receipts: do not use cash. Just don’t do it. Write a trust account check for everything. Everything. Cash, and ATM cards, just lead to problems. A vendor (or care provider) is insisting on cash? Find someone else to do the work.
• Hire professionals. You have the authority as trustee to do the trust’s tax returns, and there is no requirement that you hire a lawyer. You will find that at least one visit each with a qualified attorney and a capable accountant are well worth the modest cost.
• Keep the beneficiaries informed. Share account statements and copies of bills. Tell them how long you think it will be before the trust is wrapped up. Beneficiaries who feel left out of the loop are much more likely to seek legal redress; even if you are vindicated, you will incur personal and financial costs.

Have you found a good resource for acting as trustee? Did you try something that didn't work well? We'd like to know. We want to suggest good resources for our clients, and also tell them what to avoid. Please tell us about your experiences acting as trustee by e-mail, snail-mail or telegram. If we get some good suggestions (and warnings) we'll include them in a future installment of this newsletter.

Would you like to subscribe to Elder Law Issues? Simply provide your e-mail address and name below, and click "Subscribe". At the same time, you may choose to also subscribe to The Voice, the newsletter of the Special Needs Alliance.

© 1993-2009 Fleming & Curti, P.L.C.
330 N. Granada Avenue, Tucson, Arizona 85701
520-622-0400 /  FAX: 520-203-0240