Starting Your Tenure
Retain counsel when you begin your trusteeship. There are unique issues which a new or incoming trustee faces which you won’t know about, but which experienced trust counsel will.
Do you have a duty to investigate the acts of the prior trustee? Should you sue the prior trustee? Do you know how to gather all the trust assets or even how or where to look for them? How and when do you communicate with the beneficiaries? Should I retain or fire any service providers?
Trust counsel, from the outset, can assist you with these issues and help you provide the proper notices to beneficiaries – even when beneficiaries know who you are and that you are coming on board as trustee.
Do Your Own Work: It’s Your Fault, Not Mine
Don’t assume that what the prior trustee did in the past was proper or appropriate. Far too many times, we hear from trustees that they are merely following what the prior trustee did. Too many times we are hearing that the present trustee is assuming that what the prior trustee did was OK. One word of advice: don’t!
You have a duty to investigate the acts of the prior trustee.
- What assets are there
- What transpired
- Independently evaluate the trust, the actions of the prior trustee
- Chart a course, or create a plan or strategy for administration and investment
- Make your own independent evaluation and decisions, particularly if the prior trustee did something bad, or harmful to the trust.
Likewise, don’t retain the trust investments which the prior trustee had simply because you believe the prior trustee knew what he or she was doing. You have a duty to review the assets yourself and retain, sell or purchase as you believe is prudent – not as the prior trustee may have believed. Simply following in the footsteps of a predecessor trustee is no excuse for wrongdoings and no replacement for your own independent analysis, prudence and judgment. Remember that you need to exercise independent judgment and sound discretion.
Ideally, you should consult with counsel even before you accept the trusteeship, although you may have to pay for that advice on your own dime.
You should retain counsel with some experience in the area of trust administration including advising trustees. Hiring an experienced trust attorney is ideal. You may compensate them a reasonable amount, which often depends on where you are located, the complexity of the issues you are faced with, based upon an hourly rate and the amount of time required to provide legal services. If you are in a mid-sized city in the south, the hourly rates for trust attorneys with 20 years’ of experience may be $300-$600. It is probably substantially higher in the largest metropolitan areas and considerably lower for those with less experience, or in smaller legal markets. You can’t pay a new attorney at the rate of a senior partner. You shouldn’t pay a lawyer with no trust experience the same rate as one with substantial experience. You shouldn’t hire your spouse, relative or best friend.
Remember: you are under a microscope. Everything which you do will be scrutinized, examined and, if wrong, corrected – either voluntarily by you, or maybe by a judge.