ESTATE PLANNING: Know what you are doing

2013-09-21T15:01:00Z ESTATE PLANNING: Know what you are doingChristopher Yugo Times Business Columnist nwitimes.com
September 21, 2013 3:01 pm  • 

A while ago, I received an email from a reader who needed help with a trust administration. It appeared at the time that a trustee may not have doing what they were supposed to do.

The reader, who was a beneficiary of the trust, needed an attorney to get involved on behalf of the beneficiaries. Unfortunately, I wasn't able to help them and referred them to another attorney. I hadn't thought much about it since that time.

However, recently the reader contacted me again to update me on the status of trust administration. It seems that the parties weren't able to work out their differences and court action was taken.

The reader suggested you folks could learn a lot from what can go wrong when a trustee does things they shouldn't do and doesn't do things they should. Specifically, the reader wrote "the unknowing public needs to be aware of the avoidable costly problems that can develop in this kind of situation."

I tried to find the case on the online docket just to get a feel of what was going on, but I wasn't able to locate it. Since all I have to go on is the what the reader told me, I'm not taking a side on this. I have no idea who is right and who is wrong. However, I think the reader is correct when he says there are "avoidable costly problems" associated with trusts.

First, it's important to understand trusts are legal documents that are legally enforceable. I know that trusts are common these days, but don't let that fool you; trusts are sophisticated documents.

The next thing you need to know is the words in the trust agreement mean something. If you have ever read a trust agreement, you know that they can be confusing. The agreement will use big words some of which might be Latin. We do that to keep you on your toes.

Since these things are complicated and sometimes difficult to understand, it is important to get good advice from a qualified attorney and sometimes an accountant. As a trustee, you need to know what your duties and obligations. Ignorance is not always an excuse. If you don't understand what you are doing, you may find yourself on the business end of a lawsuit.

I'm not suggesting that if you are trustee, you need to worry about being sued. Most trustees don't find themselves in court. But if you get in over your head and you're not sure what you're doing, stop and get help. Mistakes happen, but it's almost always better to admit the mistake and correct it. A judge is much more likely to forgive incompetence that reckless disregard. Especially when it involves trust assets.

Opinions are solely the writer's. Christopher W. Yugo is a Crown Point attorney. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN, 46321 or to chrisyugolaw@gmail.com. Yugo's information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant or estate-planning specialist.

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