The Problem with a Relative Trustee

Nov 23, 2012

Over the years, trusts have evolved and grown to the point where almost anyone can benefit from including a trust in his or her estate plan in Cherry Hill NJ. In fact, many people choose to place the bulk of their assets into a trust simply to make the disposition of those assets easier after their death. For smaller trusts such as these, the trustor may choose to name a family member as the trustee. Although this is certainly allowable, it can create tension or conflict among the beneficiaries.
 
Imagine, for example, that you have four children and you decide to name one of them as the trustee of your trust. All of the children, including the trustee, are beneficiaries under the terms of the trust. You chose your trustee because that child has a degree in accounting. While your decisions makes complete sense and is allowable under the law, it could result in conflict among the children.
 
Your trustee must abide by any specific terms included in the trust; however, any decisions not covered in the trust terms are made by the trustee. Your trustee must not favor himself or herself when making decisions and must administer the trust efficiently but the bottom line is that the trustee has the final say about how assets are handled in the trust. The other children may feel as though they should be consulted or even asked to consent to decisions that affect trust assets; however, consent of the beneficiaries is not required.
 
In order to avoid conflict, you may wish to appoint a neutral third party as trustee. If you decide to go ahead and appoint a family member, consider explaining why you made that choice and what the appointment means to your other beneficiaries.

 

Page Tools

  • Share this page SHARE
  • Print Friendly and PDF

Leave a Reply

  • (will not be published)

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

IMPORTANT! To be able to proceed, you need to solve the following simple math (so we know that you are a human) :-)

What is 9 + 5 ?
Please leave these two fields as-is: