How Trustees Can Avoid Problems

9:56 pm California Trusts, Trust Administration

trust pic 150x150 How Trustees Can Avoid ProblemsIf you have been appointed as trustee of a California trust, then you have responsibilities both to the beneficiaries of the trust and to the law to perform your duties correctly.  If you don’t, you could be held personally liable, which is why many trustees without experience in this area of the law get professional help to guide them in their decisions and duties.

As a trustee, you must locate and protect trust assets, invest those assets prudently, distribute assets to beneficiaries, maintain careful financial records and file taxes.  Under California law, you have a fiduciary duty to the beneficiaries of the trust, which means you must act in their best interests at all times.

While a trust can be administered without the involvement of a court, this doesn’t mean that trust administration is easy.  There are circumstances when problems could arise – for example, if proper records are not kept, if tax filings are not done on time or if assets are not invested wisely.  If a trust is not administered properly, the trustee can be removed and help personally liable for any losses suffered or costs incurred.

Unless specifically prohibited by the trust document, a trustee can generally hire an attorney or financial adviser to help with the administration of a trust.  The fees for these professionals are paid by the trust, not the trustee.  Most trustees find it well worth the cost to obtain expert guidance to ensure they comply with the provisions of the trust and California law.

If you are a trustee and need assistance with trust administration, contact our Orange County law firm.

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