What are some of the common conflicts that I should look out for as I administer the trust of my loved one?

Up-front understanding up some of the common conflicts that arise during trust administration is a valuable tool for a trustee. While every trust administration is unique and depends largely on the dynamic between the trustee, the beneficiaries, and the creditors of the trust, certain issues arise more frequently than others do. These potential conflicts include the following:

  1. Beneficiaries who are upset because they feel the trustee is favoring one beneficiary over the rest. Trustees have an obligation to treat all beneficiaries equally. It is very important to be aware of this fact as you carry out the trust administration.
  2. Beneficiaries who are unhappy with the terms of the trust. If the beneficiary had different expectations as to what property he was to receive under the trust, there may be conflict. The best that a trustee can do in these circumstances is to be open and transparent with the beneficiary about the terms of the trust instrument, the assets of the trust, and the actions he takes.
  3. Beneficiaries who are upset that they cannot access their share sooner. A trustee should make it clear to the beneficiaries what the terms of the trust say about distributions. If the trustee has the ability to make discretionary distributions, he must be consistent throughout the administration with regard to how those decisions are made.
  4. Co-trustees who disagree about how to administer the trust. In some cases, the trust may contain guidelines as to what should happen if the trustees are in disagreement. Generally, however, co-trustees should use their best efforts to be cooperative, transparent, and communicative with their co-fiduciary.

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