AVOIDING TRUST LITIGATION: 5 STEPS A NEW #TRUSTEE SHOULD TAKE
A new trustee should take some basic steps when they assume the role of #trustee.
** After all, you don’t want to take charge of a lawsuit, right?
** You , as trustee, want to serve your beneficiaries, not be sued by them, right?
** And you also want to limit your liability, right?
Here are 5 Steps a New Trustee Should Take when you start serving as trustee of a trust.
1) Review the actions of your prior trustee.
Did he or she do everything correctly?
If not, you have a duty to “right” the wrong, which may mean suing the former trustee. Sometimes, you may not have a duty to investigate the acts of the prior trustee, but trustees generally have a duty to investigate the acts of the prior trustee. The exception is if a #probate court order, or all the beneficiaries, agree that you shouldn’t.
2) Review the investments and cash on hand. Did you get all the trust assets you were supposed to? How are the assets invested?
3) Prudent investing: create an investment strategy. You need to come up with, create, an #investment strategy for the #trust assets and money. You have to comply with the #prudent investor rule which governs how trustees handle trust assets — money, cash, real estate, investments, etc. Hire a pro if you like or a good #trust lawyer, but here is an important tip: independently evaluate all investments made by the prior trustee.
DON’T ASSUME THAT INVESTMENTS YOU INHERIT FROM THE PRIOR TRUSTEE ARE “GOOD” OR PRUDENT.
YOU HAVE A DUTY TO CONDUCT YOUR OWN ANALYSIS.
REMEMBER: your decision to “hold” an investment you received from your prior trustee is the same as if you had cash and decided to “buy.”
4) File a Notice of Trust . Send a statement to your beneficiaries identifying yourself and your contact information. Tell the #trust beneficiaries that they are entitled to relevant information and a copy of the trust document. Send them statements — disclose, disclose, disclose !
5) Get Someone In Your Corner. Hire an investment professional and #trust lawyer.
Most people don’t have the time or experience to manage money prudently let alone administer a trust.
Consider delegating #investment authority to a #trust company or bank . Get a good #trust lawyer who actually handles disputes and #trust litigation so she can tell you what you need to be wary of, and so he can give you a heads up of trouble coming down the line. The trust can pay reasonable #trust attorneys fees and costs and will also pay #reasonable investment management fees for an investment agent if you delegate investment authority to that investment pro.
FOR REFERRAL SOURCES, LAWYERS AND LITIGATORS ONLY
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- hands your clients back to you at the conclusion of the #Florida matter—after all, they are YOUR clients
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Who are we? Our firm is comprised of
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We have been involved in high profile, nine figure, multi-million-dollar #Florida estates, including Madoff matters, old # Palm Beach money and complex trusts and multi-party #Florida probates. We also handle “small” or “simple” matters. All we do is litigate and help you with #Florida estate and trust administration. #Tortious interference with an inheritance and allegations of #undue influence, and #will challenges and trust challenges are a unique subspecialty of the law. Does your client know which ones to file, when to do that, and why? Do you know the different ways to prove each case? How about quantifying or assessing damages? It would be our pleasure to work with you and to serve your clients. For a complete copy of this very recent legal opinion please email michelle@pankauskilawfirm.com.
John Pankauski, www.johnpankauski.com, is the author of The Trustee’s Book – An Individual’s Guide To Money, Misfits, Marriages, and Mismanagement, and the upcoming The $41 Trillion Inheritance War. He is an estate and trust litigator in West Palm Beach, Florida, www.pankauskilawfirm.com and has been featured on the CBS Evening News, in The Wall Street Journal, MarketWatch, NBC, ABC and Fox networks.