MN Law: Mistakes Made for Trustees and by Trustees
Being someone’s trustee can be a big ordeal. Those who take up the role have to understand the trust, execute the trust, communicate with the right people, practice good bookkeeping, and maintain a straight head. If they aren’t properly prepared, trust law can make their job relatively difficult. That said, here’s a bit of advice on what mistakes might occur and how they might be avoided. That is, already assuming that the trustee will be honest to a point with every last detail.
Here’s also a bit of information on how to help prevent issues when crafting the trust itself. How the money is given to a beneficiary can create huge problems unless done thoughtfully. No trust is going to be fool-proof as long as errors can be made. Nonetheless, you can attempt to put good guidelines in place and hope for the best of the best.
Not Reading the Print
Getting the most out of a trust document may appear to be a daunting task to most trustees. Since almost anyone can fit the role, trustees don’t have to know much legalese, so to speak, in order to sign the docs. The flip side of that coin is that most trust documents are not written in plain English, oftentimes making it difficult to follow trust directions unless someone clarifies the meaning. Think of reading Shakespeare in Latin. It may turn out they need a lawyer even if they’re far from falling into legal difficulties.
You, as the maker of the trust, can help prevent this by explaining the details with them and introduce them to the lawyer you’re working with. Your lawyer should be able to help explain the parts that you’re struggling to explain. There’s also the additional bonus that your lawyer will be able to explain things better because they’re the one who helped craft the trust. You, moreover, should be upfront with your trustee about the fact that some parts of the trust might be hard to understand. It’s possible that they won’t be fully aware of what they’re getting themself into otherwise.
Always Going Direct
Throwing free money at people usually sounds good on paper. However, in theory and life, it doesn’t always turn out so candy sweet. You’ve probably heard finical gurus talk about being smart with money and it’s good to be smart with your money even when you’re giving it away. It’s possible that by directly giving money to someone with special needs, you could unintentionally cause them to lose government assistance. Working around the system is a key part to successful estate planning.
There’s also the issue concerning minors. It’s very possible that the court will have to appoint a conservator just because you left money for someone who is under the age of eighteen. This could deal with rights of survivorship law. Your good intentions don’t change the law. It may prove far better to look into trusts, for instance, and see how to ensure that the money is taken care of properly. Conservators can do good, but they aren’t the only option. And that’s not even getting into how trusts can help beneficiaries who have trouble managing money on their own.
Bookkeeping Failures
Trusts often have purposes behind them. That’s to say that they usually have to serve and fulfill a designated purpose. The worry here is that it’s not your trust which might turn out to be at fault, but that the trustee might not carry things out as intended or maintain proper records. To reiterate that, besides all the things written in your trust that your trustee needs to follow, they’re also responsible for doing the bookkeeping.
False records are so serious that should someone find out that the records came up incorrect, your trustee could be brought to court. They have to be extremely honest or risk having to face a judge. You heard right. Not only do trustees need to be in the know about what the trust entails, they can get in trouble for getting the numbers wrong. The role of a trustee, for sake of conversation, is highly subjective to the trust and insuring that things are taken care of properly. Please be considerate of what a trustee must do before you have them start handling the money. Not everyone loves doing math.
Poor Team Communication
Weak links in a chain can break the whole. Your trustee needs to be the strong link or at least one that gets along and helps hold things together. Warring against your financial team should be a red warning sign unless they’ve got serious and legitimate concerns. Team collaboration is major concern here since it can cause your trust to win or fail. Successor trustees might not always have you to come back to if they actually outlive you.
Yes, redistributing the assets is their prime directive in a nutshell. But communicating with everyone inside of your financial team efficiently, effectively, and on time is a big deal. Money is on the line here, and unless your trustee gets themselves together, some of it could disappear. There could be misunderstandings if not actual financial loss.
Minnesota Trustee Lawyer
Before you even think about making someone a trustee, it may be wise to get a Minnesota trust lawyer on your side. As a recommendation, call the Flanders Law Firm LLC at 612-424-0398.
Get a quote and then help making the trust. There’s plenty of parts to estate planning and help with trusts is just one of the many services they can offer you and your trustee. Writing a trust in legalese doesn’t need to be your job. Rather, inquire about what someone can do for you in order to help prevent mistakes from coming up. Start with a lawyer before you make any hard decisions that may prove harmful.
