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Retaining Trust Counsel

Help…you’ll need it.

So now that you have decided that you want to be a trustee, now that you understand why you want to serve, and now that you have read the trust document completely, we can move on to the finer details of beginning to administer the trust for the benefit of the beneficiaries.

Administering a trust means that it’s your job to:

  • Protect the beneficiaries and the trust property.
  • Safeguard that property.
  • Invest it prudently so that it hopefully increases in value over time.
  • Monitor the assets in light of the decisions which you’ve made .
  • Watch costs and expenses .
  • Share all this information with those who you have chosen to serve, namely, the beneficiaries.

But along the way, you, like any legal actor, should also use the law to protect yourself. While it is certainly true that you must serve your beneficiaries, and that you must be loyal to them, nothing prohibits you from taking advantage of safeguards which the law provides trustees. It is only common sense to do so. After all, you are agreeing to serve as trustee, not indemnify the beneficiaries from every market downturn or bump along the road.

One of the best ways to both assist you with administering the trust for the beneficiaries, and to protect yourself as trustee, is to retain experienced trust counsel to advise you.

Don’t Go It Alone: It Is Expected That You Will Have Trust Counsel

It is not only acceptable for a trustee to hire a trust lawyer, but it is expected. Most states have statues which specifically permit the trustee to retain experts and professionals including attorneys and accountants. Likewise, most trust documents say the same thing.

Don’t feel that hiring trust counsel will make you look weak, or suggest any wrong doing to beneficiaries or a judge. Even the most seasoned individual trustees have counsel. Many Americans prepare their own tax returns, on their own, when they shouldn’t – they should have an accountant prepare them. Hiring trust counsel is not a big deal.

Some individuals may believe that hiring an attorney “sends the wrong message” to the beneficiaries. Let’s face it: hiring an attorney most times sends a serious message to the other side. This may be doubly true in the case of a trust where one is dealing with family members and money. Many may believe that you’ve done something wrong (why hire an attorney if you’ve done everything correctly?).

My suggestion is to disclose the hiring of trust counsel and to simply be upfront with the beneficiaries: explain that the trust law, and the trust document, both contemplate a trustee hiring trust counsel for the limited role of advising the trustee on trust law and administration. You might even say that the hiring of trust counsel should not be interpreted in any other manner and that you will monitor the fees paid to counsel from trust assets.

When I was a boy growing up north of Boston, just after attorneys were permitted to begin advertising on television, a local attorney had a TV ad with a saying that summed it up perfectly: “Don’t go it alone.” Although he was a personal injury attorney, trustees should heed his advice.

Dispelling Common Myths – Money Changes Everything

Many believe that their family, their loved ones, would never sue them. Let me dispel this myth. 9 out of 10 calls to our firm are from a prospective client distraught over what a family member did…and ready to sue them. When you put money in the mix, rules change. Love changes. The sense of family changes.

Let’s face it, many times it may not even be your immediate family member, but rather the in-law or dominating, know-it-all spouse of your relative who has no interest in the trust, that is complaining the loudest. Or threatening the most. I have repeatedly found that it is often the spouse or boyfriend or girlfriend – who has no money or interest in the underlying disagreement or dispute – who is the catalyst. The agitator. A word of caution to trustees: don’t believe a self-imposed myth that your family members won’t sue you, or seek your removal as trustee. They do it every day and hire lawyers like me to get it done.

Hiring trust counsel and actually hearing – objectively – what they have to say may just open your eyes, your ears and your mind. That’s because once you hire counsel, they can assist you in dispelling two other common myths: that you don’t need counsel and that what you are doing could never be questioned.

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