The person who creates a trust is always the beneficiary of the trust, especially after he or she dies. Yet, it is usually the trust creator who chooses the trustee to serve now and later on.
Since the beneficiaries do not ordinarily have a say in the trustee designation this often leads to conflicts between those beneficiaries and the trustee.
Minimizing those conflicts is an important part of trust planning.
Recently, the Wills, Trusts & Estates Prof Blog published a list of ways to do just that in an article titled "Preventing Conflicts Between Trustees and Beneficiaries."
The list includes:
- Make sure that beneficiaries know what the terms of the trust are and what authority the trustee has to make discretionary decisions.
- If the trustee has the authority to distribute trust assets on a discretionary basis, beneficiaries need to make a clear and calm case for why assets should be distributed and avoid getting emotional.
- The trust should clearly state the rules to be used to determine the trustee's fees.
- Trustees and beneficiaries need to communicate. If conflicts arise, a third party should be used to facilitate resolution.
Fights between trustees and beneficiaries often lead to legal battles.
For that reason it is important that the previous steps are followed.
If you have any questions about other ways to minimize conflicts over trusts, contact an experienced estate planning attorney.
Are you a trustee or a beneficiary looking for more information on estate planning? Contact us for more information.
Reference: Wills, Trusts & Estates Prof Blog (December 8, 2014) "Preventing Conflicts Between Trustee and Beneficiaries"