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Estate Planning Mistakes and how to avoid them to get it Right - YouTube
Channel: Cortes Law Firm
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today we're gonna talk about five
mistakes made by successor trustees and
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how you can avoid them hi guys welcome
to two minute Tuesday where I attempt to
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discuss an estate planning topic in two
minutes or less
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now I will tell you today it won't be
under two minutes we've got a lot to
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cover now before we get started if you
are enjoying these videos every Tuesday
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can you please do me a huge favor and
hit the subscribe button in the
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right-hand corner below and click on the
bell to get alerts when we post new
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videos every Tuesday I'd really
appreciate it when you create a
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revocable living trust one of the first
things you need to think about seriously
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is who is going to be your successor
trustee both during your lifetime and
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after you pass away the person you pick
should be somebody that you trust
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implicitly and it should be somebody who
you believe can remain steadfast to your
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wishes in the face of family
disagreements and disputes regarding the
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trust if they were to come up so here
are five surprisingly common mistakes
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that successor trustees make the first
is faulty record-keeping the trustee
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hasn't been able to keep accurate and
detailed records of income and all
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distributions and your trustee also
needs to be prepared to report this
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report these figures to beneficiaries on
a regular basis if the records are not
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complete or they are not as accurate as
they should be
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then this can open the door for a
lawsuit so to prevent this a trustee
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should hire an accountant to assist them
in the record-keeping and the
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bookkeeping to make sure everything is
above board the second mistake is
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misunderstanding the fiduciary role so a
lot of trustees mistakenly assume that
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their job involves acting in the best
interest of the person who created the
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trust but the reality is that their job
is to act in the best interest of the
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beneficiary now the person who created
the trust could also be the beneficiary
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as well and I think that is why
sometimes a trustee will get confused
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because they have the beneficiary who
created the trust and then they also
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have the beneficiaries who could receive
from the trust
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- the original grantor has passed away
so to avoid this mistake it's important
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to detail what the fiduciary role of the
successor trustee is in the trust
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document itself and make certain that
the trustee understands their role as a
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trustee the third mistake the trustees
make is not working effectively with
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other team members that you've already
put together for your estate a trustees
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failure to communicate with key members
of your team like your CPA your
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financial planner and your attorney can
lead to misunderstandings and
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significant preventable financial losses
so to prevent this mistake
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make sure that whoever your successor
trustee is has been introduced to your
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CPA your attorney and your financial
adviser and anybody else that is
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involved on your estate planning team
the fourth mistake is failing to discuss
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compensation you know a lot of times
when it comes to naming a family member
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as a successor trustee people will not
put in any provisions for compensating
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that person to act as their trustee now
in most cases it is probably not going
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to be a problem but if there's
significant work for them to do then it
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can sometimes result in a lack of a
morale or even resentment for them
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having to manage this entire estate so
to prevent this you should discuss
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compensation with whoever you're
thinking about and put it in writing in
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the terms of the trust document itself
the fifth mistake is failing to remain
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objective so like I said earlier a lot
of people will pick a close family
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member as their trustee but the problem
can be that disputes about money always
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change people believe me I've been doing
this for over 18 years and people come
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in all the time and say my family won't
fight over it but when it comes to money
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they almost always do and the end result
can be decisions that family members
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perceive to be unfair or that wind up
being inconsistent with your intentions
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and creating family drama that is
completely unnecessary so to fix this
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make sure the person who you have chosen
remain completely neutral and faithful
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to the terms of the trust even under the
stress of other family members sometimes
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the best solution is to just hire a
third party to be a corporate successor
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trustee it might cost a little bit of
money but it'll be worth it so the
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bottom line is to remember that
selecting who is going to be your
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successor trustee is one of the most
important decisions that you will make
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during your state planning process so
please give that a lot of thought well
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that's all for today if you've not been
able to make it to one of our live
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estate planning seminars and you still
have questions then please sign up below
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for our free estate planning webinars
where you can watch from the comfort of
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your own home
now I know today I was way over the two
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minutes but this is important stuff and
if you enjoyed this video then please
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like it below and please hit the
subscribe button or click on my face in
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every Tuesday we appreciate you watching
and I'll see you next time thanks again
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