A DC trusts and estates lawyer can provide assistance with all types of estate planning techniques so you can develop a comprehensive plan for your future.

Mort graduated from Yale Law School after graduating cum laude from Bowdoin College where he was an elected member of Phi Beta Kappa.

Ms. Haber earned her Bachelor of Science in Psychology and her Juris Doctor from the University of Florida.

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Trustees for Revocable Living Trusts in Maryland

The identification of fiduciary is one of the most important decisions that has to be made during the creation of a trust. The trustee often has very broad powers that allow him or her to act on behalf of the management of other beneficiaries. Although a trustee is bound by fiduciary obligation, sometimes the flexibility in an estate planning document allows a trustee to have broad powers.

It is important during the estate planning process to select a trustee that is going to act on the best interest of the beneficiaries of the Maryland revocable living trust, honor the trust provisions, and understand the grantor’s original intent in creating the trust provisions.

Professional Trustee

A professional trustee is an individual, who is often outside of the family, who acts as a hired trustee. There are many financial institutions, banks, trust departments, attorneys, accountants, and other professionals in the field who manage trust assets. Sometimes, this is beneficial where there is a predisposition to family arguments or family fighting.

Pros and Cons

There are a number of scenarios where a professional trustee may be a good fit. Some of those scenarios include when an individual does not have anybody else to name. For example, if a grantor has only one child who suffers from special needs, that child may not be a good fit to name as trustee of his or her own trust, or may not be able to serve as trustee.

In addition, scenarios where there may be a lot of known family disagreements or the grantor is concerned that the trust assets will suffer from family arguments; naming an objective third party professional trustee may be a good fit.

One of the negatives of using a professional trustee is that often, a professional will charge his or her rate to manage the trust. When a trust is not very large or there is concern about eroding the trust principal, then a professional trustee may not be the best fit.

Grantor’s Reserved Powers v. Trustees’ Power

One of the most complicated concepts of a revocable living trust are the different roles that the same individual can have, and how different individuals are involved with the trust. Generally, a trust has a grantor, also a trustee and beneficiaries.

In some scenarios, the grantor is also the trustee and initial beneficiary. The rights that are commonly reserved by the grantor are usually those that allow him or her to amend, revoke, fund, terminate, and de-fund the trust at any time.

Trustee powers are different. The trustee powers explain what the trustee can and cannot do in his or her capacity as trustee. The trustee powers may include the ability to manage real estate and the ability to file income taxes and/or estate taxes that are necessary. Trustee powers may also include the ability to manage, mortgage, sell or purchase real estate. Trustee powers may allow the trustee to invest or reinvest assets. Trustee powers may differ from document to document.

Alleviating the Pressure on the Trustee

There are a couple of different options available to alleviate the burden of a sole trustee of a revocable living trust. One option may be to name co-trustees to serve. Generally, naming more than one individual to act in a fiduciary capacity can lead to complications for the trust. For example, both trustees must agree on every decision for the trust and administratively, may both need to manage the trust together.

Another option may be for an individual to name a corporate trustee, such as a bank or another financial institution, to manage the trust assets.

A grantor can also build a team of professionals; such as an estate planner, an accountant and financial adviser, that are familiar with the type of planning and can be a resource for the trustee to use during his or her lifetime.

Trustee Compensation

The trustee’s compensation is usually outlined in the trust agreement itself. The trustee’s compensation is governed by the trust agreement. The trustee’s fees must be reasonable. In many cases the trustee’s compensation is limited to either the amount established by law or, for a professional or corporate trustee, to an individual financial institution’s fee schedule.