CHALLENGES OF TRUST ADMINISTRATION
Even though properly funded trusts avoid the legal proceedings of probate, trust administration is not without its own set of challenges.
A trustee’s task is to: (a) collect all assets belonging to the trust; (b) manage and invest trust assets; (c) pay debts and taxes as required in the trust documents; and (d) distribute the remaining trust assets to the designated beneficiaries, as provided in the trust instrument.
A trustee must act in accordance with his fiduciary obligations to the beneficiaries. What this means is that a trustee must not do the following: (a) act without consent of co-trustees; (b) comingle personal funds with trust funds; (c) loan trust funds without adequate documentation and proper security; (d) make speculative investments or invest without proper documentation; (e) place trust assets into personal safe deposit boxes; (f) make cash disbursements to any beneficiaries without getting a signed receipt; (g) take assets in your own name without reflecting your capacity as trustee.
The bottom line is that the trustee must adhere to set standards or the trustee may be subject him or herself to personal liability. We will work closely with the trustee to make sure that the trust is administered according to the intent of the decedent while shielding the trustee to unnecessary liability.