Trustees

Friday, May 27, 2011

Recent Press Coverage of Estate Planning (May 27, 2011)

Lauren Foster of Barron’s reviews five common mistakes that non-professional trustees make when managing a trust. Pitfalls include failing to keep adequate records, failing to diversify trust assets, failing to recognize conflicts of interest and treating beneficiaries and remaindermen appropriately, and expecting timely and reasonable compensation for taking on the role of trustee. See The Five Biggest Ways to Bungle a Trust (May 21, 2011).

Arden Dale of the Wall Street Journal discusses how heirs and executors of people who died in 2010 are struggling with important estate administration decisions. Part of the problem lies in that fact that executors can choose among two estate tax regimes, one with no estate tax but a complicated capital gains framework, and one with an elevated federal estate tax threshold. On top of that, the IRS hasn’t issued some important forms, which leads to questions about elections and due dates. See A Tough Call for Heirs (May 21, 2011).

Tuesday, April 05, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

Can a beneficiary of a trust also be a trustee?

Yes, in some cases, depending on the type of trust. The same person is often both a beneficiary and trustee when creating a revocable living trust. But in other types of trusts, the beneficiary should not also be a trustee. Examples include certain irrevocable trusts where the purpose is to get the assets out of the grantor’s taxable estate. In that situation, naming the same person as both the trustee and the beneficiary could cause inclusion of trust assets in the grantor’s taxable estate, among other problems.

For more information on Trustees, see the NEET article:

Choosing a Successor Trustee
 

Tuesday, December 14, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website.

Can a beneficiary of a trust also be a Trustee?

Yes, trust beneficiaries are often also a Trustee of the trust. However, it takes careful drafting to avoid various tax traps that can inadvertently include the trust assets in the taxable estate of a trustee, among other potential problems. Selecting beneficiaries and trustees requires balancing many factors, including tax ramifications, the suitability of a particular person to take on the trustee’s responsibilities, and asset protection, among other considerations.

See the article: Choosing a Successor Trustee
 

Friday, February 12, 2010

Press Coverage of Estate Planning this Week (Feb. 12, 2010)

Shelly Banjo and Arden Dale of the Wall Street Journal discuss the dilemma of whether to re-do an estate plan when the future of federal estate taxes is so uncertain. Most attorneys agree that you should have an estate plan review to understand what the current law is and how it impacts your existing plan. See Making A Plan Amid Estate-Tax Limbo (Feb. 9, 2010).

Christopher Yugo writes in the Northwest Indiana Times about the different ways a successor trustee can take over trustee duties, and what paperwork banks and other institutions may want to see to accept the new trustee’s instructions. See Assuming Your Position As Trustee (Feb. 12, 2010).

Arden Dale of the Wall Street Journal covers what some states are doing to ensure that estate plans of people dying in 2010 are not upended by the federal government’s lack of an estate tax in 2010. Because no federal estate tax exists so far in 2010, some plans will yield results that the decedents did not anticipate. See States Pulled Into Estate Tax Vacuum (Feb. 11, 2010).

Tuesday, September 15, 2009

Estate Planning Tip of the Week

Can a Beneficiary also be a Trustee of a Trust?

A beneficiary may be a trustee of a trust, but depending on what the trust is intended to accomplish, you need to be very careful in deciding who the trustee should be.

Beneficiaries also fulfill the role of trustee in two common situations.  First, where the creator of a revocable living trust, also known as the settlor or grantor, is a beneficiary and also trustee of their revocable living trust until they die.  Second, if the deceased settlor drafted the trust to create beneficiary-controlled subtrusts upon the settlor’s death, the subtrusts will likely name the beneficiary as trustee for many purposes, but not others, such as distributing funds from the subtrust.

Naming a beneficiary as trustee has many implications that will impact federal and Vermont estate taxes, the degree of asset protection available, and, depending on the potential trustee’s abilities, whether the purposes of the trust are carried out.  Also, be aware that a person cannot be the sole trustee and sole beneficiary, but may be the only current trustee and beneficiary provided successor trustees and beneficiaries are named.

Who is named as trustee of the trust is a central question the trust settlor should not take lightly.  For more information on naming a trustee, see Choosing a Successor Trustee on the Articles Page.

Friday, June 26, 2009

Press Coverage of Estate Planning This Week (June 26, 2009)

Matthew M. Wallace, Esq., writes in the TimesHerald.com (Port Huron, Mich.) about one's responsibilities when taking over as trustee of a trust.  See I've Been Named a Trustee -- What Do I Do Now? (June 21, 2009).

Warren Pena writes in The Hour (Norwalk, Conn.) about planning considerations, including special needs trusts, for children with special needs.  See Planning for Your Child with Special Needs (June 22, 2009).

Christopher Yugo, Esq., writes in the Northwest Indiana Times (Munster, Ind.) about the importance of meeting and working with an estate planning attorney directly, not just having your financial planner arrange everything.  See Make Sure You Know Your Estate Plan (June 21, 2009).

Ashlea Ebeling of Forbes.com provides advice on estate planning for those with chronic illnesses.  See More Planning Prescriptions (June 25, 2009).

Victoria Knight of Dow Jones Newswires discusses how naming a relative or close friend the successor trustee of your trust can lead to abuses, and that naming an institutional trustee is sometimes a better approach.  See Elderly Need to Pick Trustees Carefully (June 22, 2009).

Lew Sichelman of the Los Angeles Times recounts the various ways to hold title to a home, including tenancy by the entireties, tenants in common, joint tenancy and sole ownership, with the pros and cons of each approach.  See Homeowners Should Be Careful About How They Hold Title to Properties (June 21, 2009).