As a Trustee, Do I Need an Estate Attorney?
Being appointed a trustee means someone has placed significant trust in your ability to manage their assets to benefit their beneficiaries. While you’re not required to hire an attorney while serving as a trustee, having legal representation can help you better handle the complexities of estate law regarding trusts. Once you understand your responsibilities as a trustee, it’s easy to see why hiring a lawyer can be advantageous.
What’s a Trustee?
A trust is an agreement in which one party (the trustee) holds property for another’s benefit. Some trusts don’t get created until after an estate holder passes away.
If you’re named as a trustee, you’re the person to whom one transfers property to hold for one or more current or future beneficiaries. You’re the person responsible for managing and safeguarding the assets that are part of the trust, and you typically perform several functions, including
- Keeping detailed accounts and records
- Communicating regularly with beneficiaries
- Approving or denying distribution of funds to beneficiaries
- Opening accounts under the trust
- Paying taxes, debts, and expenses that are part of the trust
- Overseeing trust investments
- Carrying out all terms of the trust
- Making discretionary decisions
Why a Trustee Should Hire an Estate Planning Attorney
Acting as a trustee is an important responsibility. An estate lawyer can help you do the best job possible. Here are some compelling reasons to have an attorney on retainer:
Meet Fiduciary Obligations
As a trustee, you must take seriously managing assets on someone else’s behalf. Your lawyer can ensure you stay detail-oriented in handling all the administrative aspects and carrying out the grantor’s instructions.
Avoid Conflicts of Interest
As a Trustee, you must identify and eliminate other conflicts of interest and prevent undue influence from beneficiaries or other parties. Your lawyer can help you understand your responsibilities in this regard.
Prepare for Trust Litigation
Beneficiaries or creditors can bring a claim against the trust you’re managing. In such cases, your attorney can do the heavy lifting and mount a legal defense for you, especially if beneficiaries sue you for alleged mismanagement of funds or assets.
Meet Accounting Requirements
There’s a great deal of accounting involved in managing a trust. You must keep meticulous and accurate records of all disbursements, payments, and other transactions. Also, you need to supply a detailed accounting report at least once a year. An attorney can help you prepare reports and maintain accounting records in compliance with the law.
Protect Trust Investments
When investing assets from a trust, a lawyer can help you avoid mistakes that could bring litigation or legal repercussions. An attorney also knows how to reduce some tax burdens associated with investment transactions.
Get Support from an Experienced Will and Trust Lawyer
Without legal advice, it’s easy for a trustee to make mistakes. Some mishaps, however, could result in serious legal consequences, such as the termination of the trust or being held liable as the trustee.
Although you don’t need a law degree to be a trustee, having the support of a Cincinnati Will and trust attorney at Donnellon, Donnellon & Miller can help you be better prepared. Working with an attorney makes it easier to navigate complex legal and accounting requirements, ensure you carry out your duties effectively, and manage the trust in the beneficiaries’ best interests.