By Lane V. Erickson, Attorney
Being named as a Trustee in a Trust for a family member or a close friend may be a great honor but it is also a great responsibility. Just because you are named as a Trustee doesn’t mean that you are required to serve. Before you agree to serve as a Trustee you should be fully informed about what you are being asked to do. To help you become more informed here are 4 questions to ask before you agree to serve:
1. CAN I READ THE TRUST?
The trust document is always the place to start. Like an instruction manual the trust document essentially tells the Trustee what they should do with the property that is placed in trust. If possible you should talk to the attorney that drafted the trust so can ask him or her to explain what the language in the trust means if you don’t understand it.
2. WHAT IS THE GOAL OF THE PERSON CREATING THE TRUST?
Often trusts don’t state specifically what their purpose is. More often, the trust document provides the trustee with considerable discretion about how to deal with trust property, often with little or no real guidance other than to use it for the benefit of the named beneficiaries. It’s common that the trust may simply state that the Trustee may distribute the principal and/or interest from the Trust for the benefit of the surviving spouse or children for their “health, education, maintenance and support.” If possible it is important for you to ask the person creating the trust questions about what they want you to do as Trustee. It may also be a good idea for you to ask the person creating the trust to put their intentions in writing in the form of a letter or memorandum. This could go a long way in helping you get the direction you may need to serve as Trustee.
3. CAN I GET HELP IF I SERVE AS THE TRUSTEE?
There is no reason you should be alone if you serve as a Trustee. You may be able to serve with one or more additional co-trustees in divvying up the duties of Trustee? If that isn’t a condition of the Trust then you may still be able to employ professionals or institutions, such as a bank, accountant, attorney or trust company. This may assist you as the Trustee in caring for and completing all necessary accounting and tax issues.
4. WILL I GET PAID TO BE A TRUSTEE?
A Trustee is not required to serve with being reasonably compensated even though family members and friends often do. Idaho specifically allows a Trustee to be reasonably compensated for the services provided. In any event, the starting place again is to read the Trust document and see if it has any specific language about compensation for the Trustee. If not, then you would be allowed to charge the Trust a reasonable compensation for your services. By asking either the person who created the trust or the drafting attorney you will be able to learn whether you will get paid for your services.
If you have been named as a Trustee in a Trust for a family member or a friend and have questions, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Lane Erickson and the Racine Olson team of Estate Planning attorneys in Idaho. You can also email Lane Erickson directly at lve@racinelaw.net. We will answer your Idaho Estate Planning questions and will help you solve your Idaho Estate Planning problems.
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