Administering a trust involves far more than simply distributing the assets held by the trust to the right people. If you’re not careful, you can get into big trouble.
TRUST ADMINISTRATION
Failure to Follow Terms
As trustee, you are required to follow the trust exactly as it is written. Even small deviations or oversights can result in legal problems, delay distributions, or — in the worst case scenario — open the door to lawsuits from unhappy beneficiaries.
Incomplete or Sloppy Records
Trustees have to track every transaction, expense, and communication related to the trust. If you do not maintain clear records, you risk disputes, delays, and even the possibility of personal liability if things don’t add up later.
Mixing Personal & Trust Funds
Even a simple mix-up like using the wrong bank account can create legal and tax trouble for a trustee. Keeping your personal funds and trust funds strictly separate is essential to avoid accusations of mismanagement.
Administrative Task Delays
If you are late on notifying beneficiaries, filing tax returns for the trust, or dragging out distributions, this can frustrate heirs and violate your legal duties. A good attorney helps you stay organized and on schedule.
Incorrectly Handling Debts
Paying the wrong creditor or missing a valid claim can result in you being held personally responsible for the error. An attorney helps you handle debts properly and avoid these kinds of costly mistakes.
Asset Mismanagement
As trustee, part of your job is to protect and grow the trust’s assets, not just let them sit or decline. If you make poor investment decisions (or no decisions at all) it can reduce the value of the trust and cause legal issues.
Biggest Trustee Lesson? You Can Be Held Personally Liable
As a trustee, you are a fiduciary. What does that mean?
Essentially, you are legally required to act in the best interests of all the beneficiaries, follow the exact terms of the trust, and handle everything — from record keeping to tax filings — with care and accuracy.
Even simple mistakes can lead to legal trouble and financial penalties, which is why it’s so helpful to work with a trusted professional.
Step 1
Schedule a Free Consultation
Reach out and set up a time for us to talk with each other. We won’t know if it feels like a fit until we get to talk.
Step 2
Collaborate on an Estate Plan
Our team learns about you and your unique needs so we can work with each other to help you design your ideal plan.
Step 3
You Are Set Up for the Future
We’re committed to making sure you understand and feel confident in whatever plans we help you to create.
