There are often questions regarding trusts, particularly when it is time to choose a trustee. There are ethical considerations, such as conflicts of interest and fiduciary duty which need to be addressed. A common question is whether living trust lawyers can be the trustee of a client’s trust. Here is some information to help you make that decision.
Selecting your trustee
Selecting a trustee is one of the most important parts of creating your living trust. A trust is basically a contract, but it also provides for the transfer of authority over your personal and financial affairs to another person. When choosing a trustee, you should consider someone who is trustworthy, knowledgeable and competent. Therefore, when a client asks whether living trust lawyers can be trustees the answer is yes.
Why selecting living trust lawyers can be a good choice
When you are trying to choose someone to serve as a fiduciary, a lawyer is always a good option. A “fiduciary” is “a person who has the power and obligation to act for another . . . under circumstances which require total trust, good faith and honesty.” Additionally, a lawyer would have specialized ability and experience that can be extremely beneficial. When your living trust lawyer serves as trustee of your living trust, he or she will already be familiar with the terms of the trust document, as well as your particular situation.
What are the possible ethical issues?
Clients are often anxious about the potential for ethical issues. Luckily, there is nothing inherently wrong with an attorney serving as trustee for a client. There are only the basic ethical considerations every attorney must keep in mind.
Disclosures need to be made
Whenever there is a possibility for a conflict of interest, there are certain disclosures that should be made to the client, in order to prevent a conflict of interest from arising. However, your estate planning attorney will be very familiar with the professional ethics requirements in the area where he or she practices, and should be able to avoid any possible issues before they arise.
Can my attorney recommend that she serve as trustee?
It is generally appropriate for a lawyer to inform a client that the lawyer is available to serve as trustee of a trust the lawyer assisted the client in creating. The primary concern is that the lawyer avoids self-interest, and presents his availability as only one of many options the client can consider. The lawyer maintains a duty to suggest the best choice of trustee to the client, depending on that client’s particular situation.
Providing informed consent alleviates most issues
The key is to provide informed consent. The living trust lawyers must provide the client with sufficient information so they can determine for themselves whether having their attorney serve as their trustee is the best choice. This means the lawyer will communicate all of the possible issues that could arise, as well as all alternatives, so the client can decide. Once the client has a good understanding, then the client can agree to allow the attorney to serve as trustee.
What is a living trust?
A “living trust” is a specific type of trust that becomes effective during your lifetime as opposed to after your death through your will. As with other kinds of trusts, the property you place in trust will be managed by your trustee, and then disseminated to your beneficiaries in the manner you instruct. A benefit of a living trust is that you can name yourself to serve as trustee while you are alive, and then a successor trustee will takes over when you die. Living trusts are valid in all fifty states regardless of where the trust was originally created.
Why You Should Create a Living Trust
There are many important reasons for creating a living trust. One of the most common reasons mentioned by clients is avoiding probate. Some other benefits of a living trust are being able to protect trust property for the benefit of your beneficiary, reducing estate taxes, planning for incapacity, and avoiding will contests. Knowing how a living trust can provide these and other benefits can make the decision to include a living trust in your comprehensive estate plan much easier to make.
If you have questions regarding living trusts, or any other estate planning needs, please contact the Schomer Law Group for a consultation, either online or by calling us at (310) 337-7696.
Latest posts by Scott Schomer, Estate Planning Attorney (see all)
- Understand the Limitations of Social Security and Medi-Cal - May 5, 2019
- Basic Estate Plan Components - May 4, 2019
- Estate Planning and Remarriage - May 3, 2019