Smooth Sailing: Tips for Efficient Trust Administration

Agreeing to serve as the trustee of a trust for your friend or loved one is a thoughtful and generous gesture. The role of trustee comes with many responsibilities, and the burden of these tasks should not be underestimated. Conflict, in particular, can seriously affect your ability to administer the trust in a quick and efficient manner. Fortunately, the following tips can help to minimize the likelihood of controversy:

  1. Communicate with the beneficiaries on a regular basis. Open communication is often the most important way to minimize potential conflicts.
  2. Refrain from taking any action that could appear as self-dealing. In other words, do not act for your own benefit. A trustee must always act for the benefit of the beneficiaries as a whole.
  3. Consider utilizing professional advisors such as attorneys, CPA’s, and financial advisors. By backing up your actions with these professional opinions, beneficiaries may be less likely to challenge your decisions.
  4. Avoid appearing as though you are favoring any one beneficiary over the others.
  5. Provide open and honest answers to the questions that the beneficiaries might have about the trust or the trust assets.
  6. Respond promptly to requests from the beneficiaries.
  7. Take proper steps to protect the assets of the trust in order to protect the beneficiaries.
  8. If the trust permits, consider engaging a corporate trustee to assist with the trust administration process. The corporate trustee can serve as a neutral third party in the event that the beneficiaries do not agree with some of your decisions.
  9. Help the beneficiaries to understand that conflicts will increase the amount of time it takes to administer the trust. In addition, if money is spent to settle disputes, the assets of the trust will be reduced.

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