Trusteeship

The TRUSTEE manages the assets that are in a trust. Many people choose to be their own trustee and continue to manage their affairs for as long as they are able. Married couples are often co-trustees, so that when one dies or becomes incapacitated, the surviving spouse can continue to handle their finances with no other actions or steps required, including court interference (Probate).

A SUCCESSOR TRUSTEE is named to step in and manage the trust when the trustee is no longer able to continue (usually due to incapacity or death). Typically, several are named in succession in case one or more cannot act. Sometimes two or more adult children are named to act together. Sometimes a corporate trustee (bank or trust company) is named.

We are serving the Elderly and Their Families throughout the Commonwealth

If you have been designated as a trustee or if you plan to designate someone as the trustee of your estate, the Law Offices of Jay B. Jackson can help you. A beneficiary-trustee is not entitled to a greater share of the estate, but is rather acting in a fiduciary capacity and must, at all times, act in the best interest of the estate. Self-dealing is prohibited and will be a cause for removal.

If a decision is made to have family members serve, it is common to have the third-party act as an independent voice, sometimes known as a “private consigliere.” This person should be a person experienced in the administration of estates, resolving disputes, and should have experience both as a mediator/litigator, and probate attorney.

Should an Attorney Act as My Trustee?

Since trusts are regularly drafted by attorneys, it may seem convenient to appoint the drafting attorney as a trustee. However, that attorney MUST be aware of the ethical risks may potentially arise.

1. What Potential Conflicts Arise when an Attorney Acts as Trustee?

Importantly, Trusts usually include exculpatory language that protects the trustee from liability. This may form the basis of potential ethical violations by attorneys who draft the trust. Consider the following:

· The Model Rules of Professional Conduct caution attorneys against making agreements that prospectively limit their liability. An attorney who drafts Trust language that restricts liability for the Trustee and then becomes that Trustee runs the risk of violating this Rule.

· Any terms exculpating an attorney-trustee may be ineffective if the client doesn't receive independent advice concerning the terms of the Trust and/or those terms are not fully disclosed to the client.

· If an attorney-trustee includes exculpatory language through abuse of confidentiality or fiduciary duties, that language will be deemed ineffective.

2. Double Compensation Limits: What Does This Mean to an Attorney?

· Trustee compensation for trust management may be limited when the drafting attorney is a trustee. A limit on compensation could mean more work for less money for an attorney who does not take the time to properly draft the document and educate his or her client.

If you require Trustee services and wish to engage our firm in this capacity, we will ask for you to voluntarily provide a document noting informed consent. We will thoroughly explain any exculpatory terms in the Trust Instrument and, if we draft the instrument, we will ensure that you understand all of these terms and fully consent to them. Remember, all of the parties involved in the creation of a trust, as well as in its administration, may benefit for the advice of a qualified estate lawyer. That person can draft trust documents, address any potential conflicts of interest and help in resolving trustee compensation issues