HOME

SERVICES

OUR DIFFERENCE

WHO WE ARE

GETTING STARTED

PLANFUL PATHâ„¢

NEWSLETTER ARCHIVES

LINKS

CONTACT

DIRECTIONS

DISCLAIMER

 

Subscribe to our Newsletter
Email:

Click here to learn more

 

Burlington, VT office 802.540.0529
Hanover, NH office 603.643.6072
Rutland, VT office 802.773.3822
Woodstock, VT office 802.457.9492

June 18, 2013 Newsletter Archive


Basic Fiduciary Tips: What Every Lay Trustee Should Know, Part 1

When it comes to establishing trusts a significant discussion point with our clients is the challenge of naming trustees. Clients often name a family member, friend, or business associate to serve in a fiduciary role because they believe that individual is trustworthy, responsible, honest and reliable. With a revocable trust, our client may be the sole initial trustee, but name a spouse or child or combination as successor trustee. Once a named trustee learns of his or her role, he or she may be flattered, and yet may be unaware of the fiduciary responsibilities that lie ahead.

Trusts are complex legal instruments and may have substantial perils and pitfalls for trustees. Serving as trustee can be a daunting task and sometimes a lot of work. Trustees are often not well informed of their duties, even though these are often spelled out in the trust instrument itself.

While our work often involves creating trusts, we also work with trustees to help them understand their roles and responsibilities. In the next months we will have articles to help demystify that role. This month we will cover the very basics and next month essential duties. These are only the elementary aspects of serving as a trustee however, and are not a substitute for speaking directly to a professional if you find yourself in the trustee role. We recommend that if you do become a trustee and have questions that you call us for assistance in navigating the trustee landscape.

First Some Definitions

A Trustee is one type of fiduciary. A fiduciary is a person bound to act for another's benefit, as a trustee in relation to his or her beneficiary.

A Trust is a fiduciary relationship in which one party, often called the donor or settlor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary

Types of Trust

Sometimes trusts name Co-Trustees who serve together. Co-trustees should work well together and communicate with each other about trust administration and any concerns they might have.

A successor trustee is someone who is named in the trust to succeed a trustee in the event that the initial trustee is unable, unavailable or unwilling to serve.

Fundamentals of being a Trustee

Once an individual learns that he or she is trustee, it may be best to seek advice from an attorney to review the trust to ascertain the trustee's roles and responsibilities. It is important to remember that as a trustee the standard you bear should include absolute honesty, transparency, loyalty, and complete and accurate disclosure to the trust beneficiaries

Authority

Your authority as trustee comes from the instrument itself. The Trust will delineate your roles and responsibilities. If you find any provisions confusing or have any questions it is prudent to seek the advice of an attorney who can provide you with guidance, recommendations and a basic tutorial about your duties.

Another source of authority comes from your state's trust code. Both Vermont and New Hampshire have adopted variations of the Uniform Trust Code found in Title 14A of the Vermont Statutes Annotated and NH RSA 564-B.

Additionally, case law will impact the trustee's duties.

Furthermore, the Internal Revenue Code guides many aspects of fiduciary duties. Generally, if you are a lay trustee seeking the advice of an estate planning attorney, a CPA and other advisors is a prudent course of action.

Signature

When signing as trustee, include your name as Trustee on documents. This will distinguish you personally from your fiduciary role.

Next month we will discuss essential duties of a trustee.

If you have any question about serving as a trustee call us at
(603) 643-6072 or (802) 457-9492

Disclaimer
This newsletter is made available by the lawyer or law firm publisher for educational purposes only, to give you general information and a general understanding of the law, but not to provide specific legal advice. No representation is made about the accuracy of the information. Discussed topics may or may not be updated subsequent to their initial posting for changes in applicable laws. Please note that information in this newsletter may change from time to time. In reading this newsletter you understand that this information is not provided in the course of an attorney-client relationship and is not intended to constitute legal advice. This site should not be used as a substitute for competent legal advice from a licensed attorney in your state.

We would love to hear from you! If you are interested in guest writing for our newsletter or simply have a comment to share, please let us know.


Melendy Moritz PLLC is a client centered boutique firm. We focus on your unique needs by providing the individualized legal counseling and advising tailored to your specific situation.

We concentrate on the planning that matters to you.
Call us at 603.643.6072 or 802.457.9492

 

Return to Newsletter Archives