Trustee Role: Proceed with Caution

Your San Jose Trust Lawyer understands that if someone asks you to serve as trustee for their trust, you should consider that a great honor. That means the family trusts and respects you. However, your San Jose Trust Lawyer also knows that before you accept the job, you need to understand that it comes with great responsibility.  To understand that responsibility, ask yourself these 5 questions:

• Can I read the trust?

The trust is the document where you will find almost everything you need to know. It tells you what you should do with the money or property in the trust that you will be required to manage. Make sure that you can read the trust and fully understand it. If you have questions, your San Jose Trust Attorney at Copenbarger & Copenbarger can help you navigate the document(s). If you ask to see it and are refused, you should definitely decline the position. That would be like accepting a job before you know what you are required to do.  

• What are the trust creator’s goals?

Most trusts are discretionary trusts that give the trustee a lot of latitude to make distributions. But, each settlor (creator) has different ideas about what types of purchases are appropriate. It is important that you ask the settlor about their goals and even ask him or her to put their intentions in writing in the form of a letter or memorandum addressed to you.

• Will I have help?

Will you be on your own as the only trustee or will you be working with another person as co-trustee? If there is more than one trustee, how will the work be divided? If the co-trustee is a professional trustee like a bank or trust company, will they take charge of investments, accounting, and tax issues and simply consult with you on questions about distributions? If you do not have a professional co-trustee, can you hire attorneys, accountants, and investment advisors as needed to make sure the trust operates properly?

• How long will my responsibilities last?

Almost all trusts last until the death of the beneficiary or until the trust funds run out. Since your position could last for some time, you need to know the terms of the trust that allow you to resign and how your successor trustee(s) is named. 

• Will I be compensated?

Often family members and friends serve as trustees without compensation. However, if the duties are demanding, it is perfectly appropriate to expect compensation. Professionals generally charge an annual fee of one percent of the assets in the trust. If you are doing all of the work, you should charge a similar fee. In situations where you pay others to perform functions such as investment management, distribution, and accounting or you are acting as co-trustee, it may be appropriate to charge a percentage of what the professional charge would be.

If the answers to these questions leave you in doubt, please do not accept the role of trustee. However, if you are willing to do the work and have a desire to help the beneficiary, you will find that serving as trustee is rewarding. If you need help deciding, feel free to contact us to schedule a consultation with a San Jose trust lawyer or a trust lawyer at one of our many other law firms located throughout the state of California by calling (800) 244-8814. 

If you have any further questions about estate planning and strategies to shield your wealth, or if you’d like to have your current asset protection plan reviewed to make sure it still meets your needs, please contact us at one of our offices located throughout the state of California 800-244-8814 to set up a consultation.