Sometimes, a Professional Trustee is a Good Idea

July 18, 2024

A couple in their 70s are trying to complete their estate plan but can’t determine who should be their trustee or executor. It’s a second marriage for both. They each have an adult child, but neither child can serve. There are no other living relatives, and all their friends are also in their 70s. Sometimes, a professional trustee is a good idea. A professional trustee or company can provide administrative services for the trust without the potential headache with family members.

The couple gets kudos for tackling this complex issue, according to the article “We’re in our 70s and don’t trust our family to handle our estate. What can we do?” from Market Watch. Most people give up at this point and then run into problems in the future, either because of incapacity or because the death of the first spouse leaves the surviving spouse in a difficult situation.

The first place to start is conversing with your estate planning attorney. They will likely know of a professional trustee or company providing “estate administration services.” It may be possible that they offer this service in their own office, too.

If this isn’t satisfactory, speak with a major financial institution, which will likely be insured and subject to state and federal regulations. They may handle your financial and personal information, such as distributing assets, closing down accounts, handling digital assets and filing income and estate tax returns.

Consider the window of time. You’ll want to be sure the person or bank will still be operating in ten to twenty years. You’ll also want to be sure they are a fiduciary. This means they are legally bound to put your interests above their own, which a court can enforce.

The fees will depend upon the size of your assets and the entity you choose. A large bank will usually charge a certain percentage of your assets. Some use a sliding scale, like 5% on the first $100,000 and a lower percentage as the asset level rises. A $1 million estate could cost around $30,000 to administer.

If a professional trustee is the same person who is administering your trusts, there will be additional fees. The assets in the trust will need to be managed, including investing, making distributions and paying taxes. Many professional trustees handle special needs trusts, where parents have left money for disabled adult children, and administer trusts for family members.

Sometimes, a professional trustee is a good idea, even when family members are available. Naming a professional, whether an institution or an individual, can alleviate concerns about family dynamics interfering with your wishes. If you would like to learn more about being an executor, or trustee, please visit our previous posts.

Reference: Market Watch (June 15, 2024) “We’re in our 70s and don’t trust our family to handle our estate. What can we do?”

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Should You Tell Beneficiaries Their Inheritance?

July 16, 2024

Should you tell beneficiaries their inheritance? It is a legitimate question for many families. If you’ve watched Netflix’s The Gentlemen or HBO’s Succession, you know how powerful the inheritance storyline can be. The mystery creates suspense, and the reveal invites drama. However, your estate plan shouldn’t take lessons from these plot lines, says an article from mondaq, “Communicating Your Estate Plan: A Helpful Tool, Not A Fix-All.”

Whether to reveal the details of your estate plan should be preceded by another question: will being upfront with heirs and beneficiaries before you die reduce the likelihood of family fights and litigation, or will it create the conflict you were hoping to avoid?

While it’s best to be able to share your wishes, whether or not to communicate anything about your estate plan is entirely up to you. No one should feel they must share this information. Your estate planning attorney is ethically required to keep your discussions and any details confidential, even after you have passed.

Any person can modify their estate plan at any time, as long as they are competent and living. You can make any changes you want, even if you’ve told your beneficiaries one thing and then decide to do another. This may have negative consequences. However, you are legally allowed to do it.

Communication can take any form and be vague or specific. You could disclose the existence of an estate plan and inform heirs that it was carefully created based on your wishes and the advice of an estate planning attorney and any other tax and wealth advisers.

Sometimes, knowing a plan has been made with professional help can allay concerns from heirs. You might communicate the general framework of the estate plan, letting heirs understand who has been named for roles like Power of Attorney, Health Care Power of Attorney, Successor Trustee and Executor. It may be helpful to explain why you’ve made these decisions to avoid the “Mom would have never wanted this” arguments.

Things don’t always go as planned, however. If explanations are not consistent among heirs, there will be conflict. Even if explanations are consistent, there will be conflict in some families, no matter how clear you are with everyone.

In some cases, having your estate planning attorney convey details of your choosing to family members might be helpful. Learning this information from someone outside the family can be less triggering, particularly when the family respects the attorney as a skilled professional.

Should you tell beneficiaries their inheritance? Unfortunately, there are some families where transparency won’t preclude conflict. In these situations, sharing any details may create battles you may not want to be a part of or subject you to attempts to influence your decisions. This is something that each person has to consider. A frank conversation with your estate planning attorney about handling these issues will help you decide if or how much information to share with your family. If you would like to learn more about inheritance planning, please visit our previous posts.

Reference: mondaq (June 18, 2024) “Communicating Your Estate Plan: A Helpful Tool, Not A Fix-All”

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Estate Planning with Annuities can be Complex

July 15, 2024

Estate planning can seem daunting. If you’re new to it, you have to learn about power of attorneys, trusts and much more. However, this effort can pay off many times over for you and your loved ones. Once you have a handle on the basics, you can start incorporating advanced strategies into your estate planning such as annuities. Nerdwallet makes the case that having good estate planning is important, and annuities are a vital tool to consider. Estate planning with annuities can be complex.

Annuities are insurance contracts that offer a series of payments over time. These contracts can pay out for a set period or the rest of your life. People often use them to manage retirement income.

Annuities have two phases. An accumulation phase is where you contribute money to the fund, and a withdrawal phase is where the contract pays out. Leaving your money in an annuity during the accumulation phase gives it room to grow tax deferred.

Annuities offer income security, tax advantages and legacy planning opportunities. Not only can you fund your retirement, but you can ensure a steady income stream for your beneficiaries. Annuities are a flexible tool to hedge against volatile markets and achieve financial security.

One of the primary reasons to include annuities in your estate plan is to provide for your heirs. According to Charles Schwab, there are three strategies you can consider during the accumulation phase:

Cash out your annuity if you’re at the end of its surrender period, though be aware of potential charges and taxes. This option provides immediate liquidity, which can be useful for other estate planning needs. However, you may suffer fees or tax penalties related to the early withdrawal.

Moving ownership to a non-grantor irrevocable trust will remove your annuity from your estate to benefit your heirs. This strategy can protect the annuity’s value from creditors and reduce estate taxes.

Make periodic withdrawals during the accumulation phase to take advantage of favorable tax treatment. Regular withdrawals can help you manage your income and tax liabilities more effectively and provide funds for other investments or expenses. This approach allows you to access the annuity’s value without triggering large tax penalties.

Once your annuity enters the payment phase, you have different options to support your estate planning goals:

Annual Gifts to Heirs: Make annual gifts using annuity distributions. This will reduce your taxable estate, benefit your loved ones and comply with annual gift restrictions.
Purchase Life Insurance: Use payouts to fund life insurance premiums. By setting up one of these policies, you can provide a tax-free inheritance for your beneficiaries.
Charitable Donations: Donate annuity payments to reduce taxable income and support charitable causes.
Reinvestment: Reinvest annuity payments into other financial instruments to continue growing your estate’s value.

Estate planning with annuities can be complex. However, you don’t have to navigate it alone.

Key Takeaways

Income Security: Annuities provide a steady income stream, ensuring financial stability during retirement and for your beneficiaries.
Tax Advantages: Annuities allow contributions to grow tax-deferred, and strategic payouts minimize taxable income.
Legacy Planning: Transferring annuities to a trust or using them to purchase life insurance protects your estate from taxes and ensures that your heirs benefit.
Flexibility: Options like annual gifts, charitable donations and trust transfers offer diverse ways to include annuities in your estate plan.

Reference: Nerdwallet (Dec. 21, 2022) “Annuities: What They Are and How They Work – NerdWallet” and Charles Schwab (Nov. 17, 2023) “5 Ways to Use Annuities in Your Estate Plan”

If you would like to learn more about annuity planning, please visit our previous posts.

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Inheriting Foreign Assets is Complex

July 1, 2024

An inheritance is almost always a mixture of happiness and sadness. You’re grieving the loss of a loved one at the same time you’ve received a financial bequest. Inheriting foreign assets from someone who lives outside of the country or from a non-U.S. citizen makes matters complex, says this recent article, “U.S. Tax: 4 Tips For Americans Receiving A Foreign Inheritance,” from Forbes.

There are certain IRS reporting requirements to be aware of, in addition to knowing what taxes you’ll be responsible for. Here are four top issues.

If the deceased person was a former American citizen and met specific requirements as a “covered expatriate” or “CE,” anyone receiving an inheritance must pay the IRS 40% of the inheritance. An estate planning attorney with experience in CE inheritances can help avoid or minimize this admittedly high level of taxes.

Even if the inheritance is not taxable, it must be reported to the IRS by the American recipient. If it is found to have been unreported, a 25% penalty will be levied. Your estate planning attorney will know how to report the inheritance using IRS Form 3520.

Depending on the type of asset inherited, there may be other reporting obligations. The Foreign Account Tax Compliance Act (FATCA) requires IRS Form 8938 to be filed if the total value of foreign financial assets is more than a specific threshold. The annual thresholds are lower for citizens who live in the U.S. than for Americans living abroad.

The U.S. tax basis must be accurately valued and documented when inheriting a foreign asset. The basis of a foreign asset from a CE will be “stepped up” to its fair market value as of the decedent’s death date. However, there are many nuances to this, and in some situations, there is no step-up.

Inheriting foreign assets is complex and requires the guidance of an experienced estate planning attorney to avoid significant taxes and penalties. If you know you’ll be inheriting assets from a CE, speak with an estate planning attorney to figure out what to do before and after the inheritance. If you would like to learn more about inheriting assets, please visit our previous posts.

Reference: Forbes (June 3, 2024) “U.S. Tax: 4 Tips For Americans Receiving A Foreign Inheritance”

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Creating a Trust to Avoid Probate Nightmares

June 25, 2024

Good estate planning ensures that your loved ones receive what you leave them without unnecessary delay or expense. However, that can go out the window when the procedure freezes your estate for months or years. Creating a trust to avoid probate nightmares can go a long way to help your loved ones once you pass.

Waiting months for probate can worsen the grief of losing a loved one. Look no further than the story of Penelope Ormerod, as told by The Guardian.

When Penelope Ormerod applied for probate on her late aunt’s estate, she expected a smooth process. Instead, she waited for seven months due to severe delays in the probate system. Recent reforms and centralization efforts had made the system more unresponsive and left her waiting. Beneficiaries, like her daughter Jessica, had dreams of funding their education on hold. This is one example of the turmoil that can ensue when your estate doesn’t avoid probate.

Trusts are powerful tools in estate planning that can prevent your family from going through similar probate ordeals. Setting up a trust means transferring your assets smoothly and quickly to your loved ones. While the traditional will process often requires probate, a trust operates outside this framework. In many cases, this saves time and reduces stress for your inheritors.

Trusts offer flexible, tailored methods for asset distribution. You can use a trust to give assets under various conditions or for specific purposes. You can establish trusts to provide your beneficiaries with lump sums or structured payouts. This ensures that beneficiaries like the Ormerod’s can avoid probate instead of waiting to receive their inheritance. Preventing delays in accessing an estate’s assets is particularly important for young families supporting minor children or ensuring that a family does not have to change their living arrangements due to court scrutiny of home ownership.

By avoiding probate, trusts can save your family stress, time and money. Probate fees and legal costs add up; setting up a trust can be a cost-effective way to pass on your assets. Trusts can also reduce tax liabilities and get more of your money to your loved ones.

Consider creating a trust so your family can receive their inheritance when you want them to, and avoid the nightmares of a probate. If you want to get started, contact an estate planning attorney. They’ll guide you through the options and help you ensure that your loved ones get what you leave them.

Key Takeaways:

Avoid Probate Delays: Trusts can bypass the lengthy and stressful probate process. As a result, your beneficiaries will receive assets sooner and without undue stress.

Flexible Distribution Options: Trusts provide various ways to distribute assets. Choose from lump sums, structured payouts and other options that best serve your loved ones.

Cost and Time Efficiency: Trustees can save on legal fees and court costs by avoiding probate through a trust. Trusts may also reduce tax liability for your beneficiaries.

Secure Your Legacy: Setting up a trust with the help of an estate planning attorney helps safeguard your wishes when you’re gone.

If you would like to learn more about probate, and how to avoid it, please visit our previous posts.

References: The Guardian (May 2, 2021) “Grieving relatives despair at months of waiting for probate”

SmartAsset (August 25, 2023) “How Does a Beneficiary Get Money From a Trust?”

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Integrating Irrevocable Trust into Medicaid Planning

June 24, 2024

When planning, especially under the umbrella of elder law and Medicaid, one tool often considered is the irrevocable trust. While reviewing the advantages and challenges of integrating an irrevocable trust into Medicaid planning, it’s important to consider the broader implications of asset management for elder care. This article helps to clarify how these trusts work, their benefits and their limitations.

An irrevocable trust serves a strategic role in Medicaid planning. By transferring assets into an irrevocable trust, these assets are generally not counted as personal assets for Medicaid eligibility purposes. This arrangement allows individuals to qualify for Medicaid, while preserving their wealth for future beneficiaries. This aspect of asset protection is paramount, as the trust shields the assets from creditors and legal claims, ensuring that the beneficiaries’ inheritance remains intact and secure.

Medicaid Asset Protection Trusts (MAPTs) are one type of irrevocable trust specifically designed to safeguard a Medicaid applicant’s assets from being counted towards Medicaid eligibility, as explained by Very Well Health. This is crucial for those whose assets would otherwise disqualify them from receiving Medicaid benefits for long-term care, which is often necessary for custodial care in nursing homes or at home.

Very Well Health notes that Irrevocable Funeral Trusts and Medicaid Compliant Annuities are also used to shield assets to enable seniors to become eligible for Medicaid benefits.

The primary advantage of using an irrevocable trust in Medicaid planning lies in its ability to protect and preserve assets. Since the assets placed in the trust are no longer under the direct control of the individual, they are effectively shielded from many forms of legal recovery efforts, including those from creditors and lawsuits. This protective measure ensures that the assets can be passed on to loved ones without being depleted by external claims or excessive taxation.

Despite their benefits, irrevocable trusts are not without their drawbacks. The most significant of these is the loss of control over the assets. Once assets are placed into an irrevocable trust, the terms of the trust cannot be easily changed, nor can the grantor retrieve the assets. This lack of flexibility can pose a problem if the financial situation of the grantor changes unexpectedly. The Medicaid five-year “look-back” period also applies, meaning that any assets transferred into the trust within five years before applying for Medicaid can incur penalties, potentially affecting Medicaid eligibility.

Setting up and maintaining an irrevocable trust involves navigating complex legal and financial planning landscapes. The trust must be structured correctly to comply with Medicaid regulations and to align with personal estate planning goals. This often requires sophisticated legal and financial advice to ensure that all aspects of the trust serve the intended purpose without unintended consequences.

Key Takeaways:

Asset Protection: Irrevocable trusts, including MAPTs, protect assets from being counted towards Medicaid eligibility, allowing individuals to qualify while preserving wealth for beneficiaries.
Benefits of Irrevocable Trusts: Assets placed in an irrevocable trust are protected from creditors and lawsuits, ensuring that the beneficiary’s inheritance remains secure.
Disadvantages of Irrevocable Trusts: Once assets are transferred into an irrevocable trust, the grantor cannot alter the trust terms or retrieve the assets, reducing flexibility. Transferring assets into a trust less than five years before applying for Medicaid can incur penalties due to the look-back period, potentially affecting eligibility.
Complex Setup Requires Legal Guidance: Establishing and maintaining an irrevocable trust requires careful legal and financial planning to ensure compliance with Medicaid rules and alignment with personal goals.

If you have the goal of integrating an irrevocable living trust into Medicaid planning, work closely with your estate planning and elder law attorneys to ensure you have covered all of the complexities of this law. If you would like to learn more about Medicaid planning, please visit our previous posts.

Reference: Very Well Health (Feb. 11, 2024) “How Medicaid Asset Protection Trusts Work”

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Should You have an Irrevocable Trust?

June 20, 2024

You may have heard the terms “revocable trusts” and “irrevocable trusts.” Both are created to hold assets for different purposes. Which is right for you? Should you have an irrevocable trust? The differences are explained in a recent article from Kiplinger, “With Irrevocable Trusts, It’s All About Who Has Control.”

Both types of trusts are separate legal entities created through contracts. They name a trustee who is in charge of the trust and its assets. The trustee is a fiduciary, having a legal obligation to manage the assets in the trust for the beneficiaries. Depending on how the trust is structured, these are the people who will receive assets or income generated by the assets in the trust.

With the revocable trust, the grantor—the person who creates the trust—can be a trustee and maintain total control of the trust. They can change the terms of the trust, beneficiaries, and successor trustees at any time. In exchange for this level of control, however, come some downsides. The revocable trust doesn’t have the same level of protection as an irrevocable trust while the grantor is living.

The irrevocable trust trades control for benefits. The grantor of an irrevocable trust can’t change the trust once it’s been created, nor can they move assets in and out of the trust at will. Beneficiaries may not be changed either. However, when the irrevocable trust is properly created with an experienced estate planning attorney, they achieve many estate and tax goals.

Your estate planning attorney will be able to explain which irrevocable trust suits your situation, as there are many different kinds.

An irrevocable trust where the grantor is also the beneficiary is referred to as a Domestic Asset Protection Trust or DAPT. The grantor is allowed to be the beneficiary of the trust, but it has to be created in one of the 20 jurisdictions where the grantor is allowed to be the beneficiary. You can have a trust created in a jurisdiction other than your own.

The first step is to determine how to fund an irrevocable trust, where assets are transferred into the trust. There are fine points here. For instance, you can’t fund an irrevocable trust if there are issues with the IRS or the threat of litigation from a creditor. If the dispute goes to court, a judge can set aside the transfers into the trust as they were made with the intent to circumvent a creditor’s claim under fraudulent transfer laws.

If a trust seems like the right planning structure for your assets, discuss with your estate planning attorney if you should have an irrevocable trust. Decisions about naming trustees, successor trustees, beneficiaries, and funding sources should be discussed with an experienced estate planning attorney first. Creating irrevocable trusts, like much of estate planning, needs to be completed before issues arise. If you would like to learn more about different types of trusts, please visit our previous posts.

Reference: Kiplinger (April 28, 2024) “With Irrevocable Trusts, It’s All About Who Has Control”

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Diverse Family Structures Have Unique Estate Planning Challenges

June 10, 2024

American family law has traditionally focused on the nuclear family. However, Forbes reports that only 18% of American adults now fit this model. There are many new types of families today, such as blended families, single-parent households and LGBTQ+ families. Dated legal definitions of family could be a hurdle in your estate planning. Diverse family structures have unique estate planning challenges. However, it’s a hurdle you can overcome with knowledge and legal guidance.

Most legal protections and rights cater to the assumption that a family is a married couple with blood children. This alone creates obstacles for many families, even those that look traditional. Many heterosexual couples have children but haven’t yet married. This can deprive them of various rights and may exclude partners from inheritance.

Blended families with stepchildren also frequently struggle with inheritance. If the parents fail to lay out the rights of the children, it can go to a lengthy probate process. Likewise, the children of single parents face a uniquely uncertain future should their parents die unexpectedly. Another diverse family type that frequently struggles with family law is LGBTQ+ families. The rights of same-sex couples vary widely by state, which makes estate planning especially important for them.

These diverse families and more can find themselves underserved by laws that don’t have them in mind. However, that doesn’t mean that their wishes must go un-respected. There are many estate planning tools available that can help people clarify and execute their wishes once they’re gone.

Advanced estate planning techniques can give anyone greater control of their estate. Everyone with a significant estate or minor children should have an estate plan. However, diverse families need to use these tools to safeguard their wishes.

Wills: A well-drafted will is Step One. It makes it far easier to ensure that your assets go to your inheritors as you wish.
Trusts: Trusts offer greater control over asset distribution while avoiding will-related pitfalls. Living trusts can be adjusted during one’s lifetime, while irrevocable trusts protect assets but are permanent.
Powers of attorney: Financial and healthcare powers of attorney let a trusted person decide if the primary individual is incapacitated.
Testamentary guardianship: Single-parent, blended families and same-sex couples should appoint guardians for minor children in their wills.
Beneficiary Designations: Designate the beneficiaries for life insurance, retirement and investment accounts. This ensures that the executor of your will transfers assets according to your wishes.

The evolving definition of family challenges conventional estate planning. Unmarried couples, blended families and other non-traditional arrangements often need tailored estate plans. However, untangling estate law on your own isn’t easy.

Diverse family structures have unique estate planning challenges. Schedule a consultation with an estate planning attorney, who will address local laws and your unique family structure, to craft a comprehensive estate plan. If you would like to learn more about planning for blended families, please visit our previous posts.

Reference: Forbes (April 2, 2024) “How Expanding The Legal Definition Of Family Helps Us All”

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Maximizing Tax-Free Giving to Children

May 21, 2024

In the ever-evolving landscape of wealth management, affluent estate owners choose to support their children and grandchildren financially during their lifetimes. While the desire to make a positive impact is evident, navigating the tax implications of such generosity can be complex. Fortunately, several strategies exist to facilitate tax-efficient giving, while maximizing the benefits for donors and recipients. Based on Kiplinger’s article, “Three Ways to Give to Your Kids Tax-Free While You’re Still Alive,” we explore three strategies that can maximize tax-free giving to children in your estate planning.

One estate planning strategy leverages possible tax breaks on capital gains. Beneficiaries of assets that increase in value have traditionally received a break if the IRS calculates capital gains tax based on the inherited value, not when the decedent purchased the asset. The inherited asset’s higher valuation is considered a “stepped-up cost basis” and lowers capital gains tax on any increase in value.

You can give to your children during your lifetime and get capital gains tax breaks if the recipient’s taxable income falls below certain thresholds. If a single child’s taxable income is below $47,025 or a married child’s is below $94,050, they may pay zero capital gains tax upon selling the asset. Note that these tax breaks apply to capital gains. Estate taxes are a different story.

The gift tax exclusion allows individuals and married couples to give money to a child and maximize tax efficiency. Individuals can contribute money to a child’s college education or the down payment on a home as a gift. In 2024, the exclusion amount is $18,000 per recipient or $36,000 for married couples engaging in split gifts. With the lifetime federal exclusion set at $13.61 million per person, most individuals can engage in tax-free giving without exceeding their lifetime allowance.

Specific expenditures, such as educational or medical expenses and direct payments to institutions, are excluded from the annual gift limit and lifetime exclusion. This direct payment strategy allows donors to support significant financial obligations, such as college tuition or medical bills, without impacting their gifting allowances. Donors can provide meaningful support to their children and grandchildren while minimizing tax implications.

While maximizing tax-free giving is essential, assessing the broader impact of financial support on recipients is essential. By incorporating gifts into a comprehensive financial plan, donors can align their generosity with their financial objectives and ensure sustainable support for future generations.

Key Tax-Free Giving to Children Takeaways:

Giving to a Child Tax-Free: Take advantage of tax breaks to give to a child in your lifetime.
Giving in Your Lifetime: Maximize the tax advantage of giving money to a child during your lifetime.
Paying for College: Transferring money directly to a child’s college does not impact the gift tax exclusion limit.

Maximizing tax-free giving allows affluent parents to support their children and grandchildren, while minimizing tax liabilities. Implement gifting strategies and consider the broader financial impact to leave a lasting legacy and support loved ones. If you would like to learn more about minimizing taxes in your estate planning, please visit our previous posts.

Reference: Kiplinger (April 10, 2024) “Three Ways to Give to Your Kids Tax-Free While You’re Still Alive,”

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Avoiding Trouble with Your Trustee

April 25, 2024

Estate planning and elder law considerations linger in the background of our senior years. We plan for senior living, incapacity, and Medicaid. We create an estate plan to protect and preserve your wealth and provide for heirs after you are gone. Trusts are a smart and well-known estate planning tool that names or appoints a trustee to administer and distribute the assets according to the terms. However, how often do estate owners ask, “What if something goes wrong and the trustee breaches their duties?” This blog offers tips on avoiding trouble with your trustee.

The case discussed in WealthCounsel’s article, “Trustee of Living Trust Who Was Beneficiary of Decedent’s Residuary Estate Had Duty to Collect and Protect Assets Not Yet Transferred to Trust,” reminds us to take steps in appointing the right trustee and to draft the trust’s terms carefully.

The case discussed in WealthCounsel’s article involved three beneficiaries, three co-trustees and assets meant for a restated revocable trust. One of the trustees did not collect and protect untransferred trust assets. The deceased’s three children and their mother sued that trustee for breaching fiduciary duty.

The Barash v. Lembo case underscores a critical aspect of trusteeship: the duty to protect and collect assets awaiting transfer into the trust designated for distribution from the trust. Despite the probate process, trustees must proactively preserve trust assets, even before their transfer.

In this case, the Connecticut Supreme Court emphasized that trustees are entrusted with a fiduciary duty from the moment of acceptance. This duty extends to diligently administering the trust in the beneficiaries’ best interests, including the prudent collection and protection of assets.

Central to the trustee’s role is the obligation to uncover and address breaches of fiduciary duty by prior fiduciaries. Whether it’s compelling the transfer of assets or rectifying breaches, trustees must act in the trust’s best interests.

When a testamentary trust emerges as a will beneficiary, trustees are tasked with pursuing reasonable claims against the estate executor. This duty demands due diligence in securing all trust assets and ensuring comprehensive asset management.

While a duty of due diligence binds trustees, evaluating their performance hinges on contextual considerations. All trustee’s actions are scrutinized within the framework of trust administration dynamics, emphasizing the need for meticulous asset management.

In Barash v. Lembo, the court’s ruling underscores the significance of trustees’ proactive engagement in protecting and collecting trust assets. Trustees must exercise diligence and vigilance, leveraging legal avenues to preserve beneficiaries’ interests.

In your pursuit of avoiding trouble with your trustee, partner with a seasoned estate planning attorney who understands the intricacies of trust administration. If you would like to learn more about trustees and trust administration, please visit our previous posts.

Reference: WealthCounsel (Jan 19, 2024) “Trustee of Living Trust Who Was Beneficiary of Decedent’s Residuary Estate Had Duty to Collect and Protect Assets Not Yet Transferred to Trust.”

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Category: Assets

Sometimes, a Professional Trustee is a Good Idea

Should You Tell Beneficiaries Their Inheritance?

Estate Planning with Annuities can be Complex

Inheriting Foreign Assets is Complex

Creating a Trust to Avoid Probate Nightmares

Integrating Irrevocable Trust into Medicaid Planning

Should You have an Irrevocable Trust?

Diverse Family Structures Have Unique Estate Planning Challenges

Maximizing Tax-Free Giving to Children

Avoiding Trouble with Your Trustee

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