Trouble with trustees: Managing the delicate beneficiaries vs. trust officials relationship

Posted on 03-02-2015 by
Tags: Trending News & Topics , estate planning

Some people may think beneficiaries of family trusts are lucky or always stand to inherit a lot of good, but in fact the first thing they inherit is a relationship. A relationship? Yes, a delicate relationship with the trustees who pull the “purse strings”. According to the Wall Street Journal here are three aspects to the relationship with trustees and how you can manage your relationship with the trustee:

Source of Tension

Heirs often want to get control of the assets sooner, and trustees sometimes push back out of concern heirs will spend the money unwisely. See if there might be a reason a trustee is resisting a request.

Money Problems

Fees can cause tensions with trustees as well. Individual trustees negotiate management fees privately, and the fees are sometimes spelled out in the trust document. Costs can vary greatly, but rules governing trust fees in some states can offer guidelines.

One problem may come if the beneficiary thinks fees are too steep, he or she may be able to limit them by hiring someone to manage the trust and someone else to invest the assets. Many states allow the division of roles.

Resolving Disputes

If you are a beneficiary of a trust and you aren’t happy with the way the trustee is handling matters, try opening the lines of communication, perhaps by setting up a meeting to air your grievances. Try to find out what might be driving an unwelcome decision by a trustee. The trustee might feel torn between making sure all beneficiaries are being treated equally and meeting the specific needs of a beneficiary who needs more money than others.

Seek a compromise or if a relationship is beyond saving, seeking a change may be necessary. Many trusts set up in the past decade include provisions allowing heirs to switch trustees.


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