Trusts are a common and powerful estate planning tool. It is important for everyone involved to remember that a trust is a legally enforceable document.
Many people enter into trusts fairly quickly these days. Since they lack the legal knowledge to read and understand them, there is a tendency to go with whatever sounds good. However, as a legally enforceable document, it is important to consult a trusted attorney when putting one together.
All too often, issues arise after the creation of the trust, especially when the trust creator has died. In many cases, the biggest issue involves a lack of communication between the successor trustee and beneficiaries.
The job of the trustee is to follow the wishes of the trust creator as presented in the trust document. This may put the trustee at odds with the beneficiaries. In some cases, the trustee may even lack the power to act as the beneficiaries wish. This may create animosity between the beneficiaries and trustee or even accusations of wrongdoing.
The best move by beneficiaries in this situation is to try to contact thee trustee to explain their position. This should be done in a calm way that leads to an open dialog, not in a confrontational or accusatory manner. It may even be beneficial to request a copy of the trust document to review the terms and responsibilities of the trustee. In some cases, an attorney could be consulted to review the trust to provide their input.
Since trusts are legally enforceable documents, the parties involved are required to fulfill their role. This means the courts could be petitioned to intervene to force the trustee to act or not act, depending on the situation. However, this typically involves costs and time that can deplete the trust assets unnecessarily, even if successful.
Although this sounds rough, the enforceability of a trust is what makes it valuable. Without enforcement, a trust would be nothing more than a naked promise. That’s why it is important to consult an estate planning attorney when creating a trust, in order to understand how the courts will view the trust document.