Questions to Ask Before Agreeing to Be the Grantor of a Family Member’s Trust

A trust, revocable or irrevocable, is a non-probate asset. This means that it does not become part of the grantor’s estate when the grantor dies, so probate proceedings do not affect the trust or its property. This means that the court is not involved in the daily operations of the trust. The courts do not get involved at all unless the beneficiaries sue the trustee, in which case the court must rule on their trust-related dispute. As stressful as probate might be because the court is always in your business, managing a trust can be equally stressful, because you are on your own to deal with the legal ambiguities and disputes, if any. Think of a trust as the grantor creating a monster and bringing it to life, with only the trust instrument to program its actions and only the trustee to keep it out of trouble. For instance, imagine that your family member entrusted his or her money to the 80-HD robot from the Dog Man comics, and then the 80-HD bounded away, and it was your job to catch it; that is what it is like to be the trustee of a trust. Before you agree to take on this role, you should contact a Bronx estate planning lawyer.

What Does the Trust Instrument Require Me to Do?

Your role as trustee of a trust does not begin until you sign the trust instrument. Do not sign until you have read the trust instrument thoroughly, preferably with a lawyer, but at least when the grantor is not in the room. A family member asking you to sign a trust instrument without reading it is like a fiancé asking you to sign a prenuptial agreement without reading it. If there are ambiguities in the trust instrument, you should ask the grantor to amend it so it is clear. If the grantor just gives you verbal instructions, then it is your word against the beneficiaries’ what the grantor meant. When you are a trustee, the trust instrument, not the grantor, is your boss.

How Does This Story End?

If the trust is revocable, it will become irrevocable when the grantor dies. If the trust instrument does not indicate a final act for the trust, your job lasts until the money runs out. Some trust instruments indicate that the trust remains in effect until the youngest beneficiary reaches a certain age, at which point the trustee distributes the remaining funds. Even if the duration of the trust is short, the trust instrument should list a successor beneficiary to take over your role if necessary.

What Could Go Wrong?

Before agreeing to the role of trustee, you should make sure you understand what liability you will personally bear for problems or mistakes with the trust. It is never too soon to hire a trust lawyer to help you.

Schedule a Confidential Consultation With a Bronx Estate Planning Attorney

An estate planning lawyer can help you fulfill your responsibilities as trustee of a family member’s trust.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.

Source:

codes.findlaw.com/ny/surrogates-court-procedure-act/scp-sect-2309.html