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.
Much of what passes for estate planning today is little more than word processing. Someone asks a few questions and then fits you into their pre-defined box. This isn’t planning – This is simply document preparation. Don’t settle for word processing in place of quality planning!
At Idaho Estate Planning we will take time to get to know you, your family, your desires, your concerns, your goals, and any potential future problems. Your estate plan should be a custom fit not a “one size fits all”. Remember, good planning is no accident.