Preventing Conflicts Between Trustees and Beneficiaries

The relationship between trustees and beneficiaries is often complicated and can lead to expensive litigation and broken friendships. Here are a few ways to avoid such problems from arising:

• Beneficiaries should have a clear idea of the terms of the trust and what if any discretionary power the trustee has.
• If a trustee has discretion in making distributions, the beneficiaries should be instructed to make a clear and calm case for themselves when there is an initial disagreement with the trustees decision not to make a distribution.
• Including clear instructions for the amount of fees in the trust document and following state guidelines may prevent future conflict over fairness of fees.
• Keeping the lines of communication open and using a third party facilitator can aid in resolving conflicts early.

See Liz Moyer, The Trouble With Trustees, The Wall Street Journal, Nov. 21, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.