Many people in California and across the country are turning toward trusts when creating their estate plans. This step can have numerous benefits, but it is important to remember that some issues could arise during trust administration. In particular, the trustee may not act appropriately for the role.
Though trustmakers are able to choose their trustees, some people are simply not suited to the role, especially if they lack a full understanding of their responsibilities. As a result, during the administration process, a trustee could believe that he or she must act in the best interests of the person who created the trust. However, in reality, the trustee is supposed to act in the best interests of the beneficiaries. If not, conflict between the trustee and beneficiaries could arise, causing significant problems.
Another issue that could arise with a trustee’s fiduciary duty is if he or she cannot act in an unbiased and objective manner. If the trustee is a family member who holds a grudge against one of the beneficiaries, it is possible for those feelings to get in the way of managing the trust appropriately. Unfortunately, a beneficiary could end up having to take legal action against a trustee for mismanagement of the trust in such a situation.
Trust administration is a delicate matter, and having the right person in charge is vital. Of course, even if California residents thought they appointed the best person to the role, problems could still come about. As a result, it may be wise to trustees and beneficiaries alike to have the support of legal professionals to ensure that everything goes smoothly.