Transparency with family members, friends and business partners is key throughout our lives—and holds true when establishing a trust too. Estate planning specialists urge transparency with both the designated trustee and beneficiaries, to avoid both heartache and costly litigation down the road.
Avoid Surprises, Conflicts and Litigation
Setting up a trust can be helpful for numerous reasons. For example, trusts enable us to plan ahead for our own potential needs as we age, disburse payments over time to designated beneficiaries, including those with special needs, and even ensure assets get to beneficiaries more quickly, and with greater confidentiality, than the probate process generally enables. However, as Ettinger Law Firm experts point out, failure to clearly communicate our intentions when setting up a trust can lead to costly conflicts, disagreements and even extended, resource-draining litigation. Recommended best practices when establishing a trust include:
- Be Transparent. The most important step a person can take while estate planning is to remain transparent about everything from beneficiaries to trustees. This way everyone has an understanding of the various parties in an estate and their roles later.
- Obtain Approval or Consent. If parties involved in an estate plan agree to actions ahead of time, they are much less likely to end up in a disagreement. By providing each party that will be impacted by your estate plan with sufficient details, you can greatly reduce the chance of disagreement among your loved ones. Remember, adequate communication is almost always the key.
- Keep Sufficient Records…The more detailed records you keep, the less likely other parties will be able to argue that you were subject to duress, undue influence, or any other type of fraud. By keeping detailed paperwork, you can also make sure that your wishes are fully reflected to anyone who is impacted by your estate plan.
Trustees and Trustee Bonds?
Importantly, when creating a trust, you (the grantor) name a trustee to administer the assets in accordance with the plans specified in the trust agreement. It is possible to name oneself as a trustee, along with a successor trustee. When families choose trustees and successor trustees, they typically designate a loved one or friend to serve as the trustee. An independent fiduciary is also an option. Keep in mind that the trustee role is not a ceremonial one. All trustees are fiduciaries: they are legally bound to the highest duty of care in executing their responsibilities. In fact, given the significant duties undertaken by trustees, the trust agreement may require procurement of a trustee bond.
A trustee bond is a type of fiduciary bond that protects the interests of the trust and beneficiaries by guaranteeing the faithful performance of a trustee in accordance with the law. As a leading national provider of many types of fiduciary bonds, Colonial Surety makes it easy and efficient to obtain a trustee bond. Just get a quote online, fill out the information, and enter a payment method. The bond can be printed or e-filed from anywhere. Trustee Bonds Here
To avoid having those you care about acting as detectives and accountants while grieving, it’s best to share as many details about your finances—along with practical information about accessing your accounts—as you can. As the affairs of the famous frequently demonstrate, death renders good intentions—and sticky notes —insufficient. Estate planning attorneys remind us to discuss not just the assets available for beneficiaries, but also anticipated debt. After all, generally assets cannot be distributed until claims against the estate are resolved. As Ettinger Law Firm sums up: “Your estate plan should clearly list all of your debts as well as your assets. This way there is no uncertainty about anything that you leave behind. Remember, if you fail to do this type of accounting then it will be done by your loved ones. Estate planning, in part, helps to avoid leaving your loved ones in the undesirable situation of straightening your affairs after you pass away.”
Estate Law Practice?
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