After discussions with New York elder law attorneys, many individuals seek to protect their assets by creating a trust and assigning a specific family member as the “trustee” of that trust. Most are aware that the trustee will make decisions about the distribution of an estate following the death of the “grantor”–the individual whose assets were placed in the trust. It is important to remember, however, that the trustee is taking on specific legal duties. A trustee is more than a mere title indicating that the individual will help handle affairs; it is an acceptance of very specific responsibilities owed to all beneficiaries.
Unfortunately, with the recent passing of a loved one, stresses are at their highest at the very moment when a trustee is required to fulfill their duties. This often leads to complications between family members.
For example, the Napa Valley Register shared a story about an all too common occurrence involving a dispute with a trustee. A man died with a living trust. He left his estate to be administered by a trustee–one of his five children. Some of the children helped in the organization and distribution of the man’s assets, while some did not. Shortly after all of the matters appear settled, one of the children who was not involved began to wonder whether they received a fair percentage. They asked the sibling who was a trustee for an accounting of the distribution, and a protracted disagreement among the family members ensued.
This situation often occurs in our area, as living trusts and the designation of a family member trustee are common components of a New York estate plan. As the children in the above situation show, there remain legal issues of which to be aware following the creation of that trust plan. Trustees are fiduciaries, which means they owe a duty of competence and loyalty to those who seek to benefit from the trust–often a group of siblings. Even if some of those family members initially seem indifferent to the distribution process or are unwilling to help, the trustee must never act in a way that could treat certain beneficiaries unfairly.
The significance of the role of a trustee makes it advisable for the individual to seek the assistance of a New York elder law attorney when administering a trust. For some initial information, take a look at our trustee “to do” list which highlights many of the legal and practical steps that a trustee should take upon the passing of their loved one. The actions outlined in this list share ways that the trustee can ensure they are meeting their duties of loyalty and competence.
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