Can Beneficiaries Request Replacement Of A Trustee?

In New Hampshire, trusts are often established as part of the estate planning process to protect loved ones from receiving an outright gift payment and also to add a layer of privacy to an estate plan.

If your beneficiaries and your trustee don’t get along, this can foreshadow a lot of problems with the implementation of the trust.

The creator of a trust, also known as a grantor or settlor, may want the trustee to use discretion in providing principle or trust income to the beneficiary. The trust agreement will usually give that trustee a lot of discretion when it comes to making distributions to the beneficiary and the creator of the trust goal could be to improve the beneficiary’s life while also protecting them from spending that money impulsively. Despite the best intentions of the creator of the trust, there may be some circumstances in which the trustee has been shown to be unworthy of acting as a fiduciary for the beneficiary or the relationship between the trustees and beneficiaries deteriorates to the point that the trustee can no longer serve as a fiduciary role.

Under New Hampshire trust law, the beneficiaries or co-trustees can request a replacement and the court will consider numerous factors, such as investment performance, charge for services, experience and skill level as a trustee, responsiveness of the trustee to the beneficiaries, changes in the nature of the trustees since the creation of the trust and whether or not changing trustees would substantially benefit or improve the administration of the trust. When establishing a trustee, make sure you carefully consider someone’s qualifications and ability to serve in this role.

 

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What Happens If A Trustee Just Doesn’t Communicate?

Whom you choose to serve in any significant role in your estate or trust administration is very important because this person must communicate clearly with your beneficiaries. trustee, communication, communicate

When creating a trust and appointing a trustee, you expect that they will live up to their responsibilities and maintain regular communication with beneficiaries. Unfortunately, one of the biggest challenges many beneficiaries report is a trustee who doesn’t communicate with them.

This can include refusing to talk about a sale of assets, such as stocks or real property, refusing to inform a beneficiary about the assets of the trust, or when assets can be distributed. Many people appointed as a trustee of trusts may assume they have broad discretion to do what they want. However, under New Hampshire Probate Code, there are strict requirements.

In many cases, trust documents also have specific instructions about what a trustee must do for a beneficiary, and at the top of that list is usually communication. A trustee still must communicate to keep beneficiaries reasonably informed about all actions the trustee is taking on behalf of the trust. Furthermore, beneficiaries must be informed about distributions from the trust since this is a crucial component of a trust administration process.

Trustees should be prepared to communicate with trust beneficiaries. Those beneficiaries who are not communicated with may be able to file a petition in probate court. If you’re thinking about establishing a trust, think carefully about whom you choose to appoint in the role of trustee.

Our New Hampshire estate planning lawyers know the right questions to ask to help you figure out the best way to move forward with a comprehensive estate plan.

 

 

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Who Makes for a Good Trustee?

Once you have already done the necessary work with an estate planning lawyer to create a trust, the next important decision to consider is who you will trust to handle your legacy. This is known as appointing the trustee of your trust, and there are several different factors to consider when selecting this person.trust, trustee

The first is their versatility to adapt to the changing tax, financial, legal and business climate because the right fit is usually someone who has the right combination of expertise, personality and comfort.

The second thing to consider when selecting a trustee for your estate is the ability for that person to act in the best interests of the trust based on the terms that you have authored in that trust. In some cases, trustees must balance competing decisions and determine what is in the best interests of the beneficiaries and in line with the terms of the trust.

The final important factor to consider when selecting someone to serve as your trustee is this person’s willingness to take on the liabilities and the responsibilities associated with carrying out your goals. This is especially important if you’re thinking about asking a friend or family member to take on this responsibility.

This person might be close to you and understand some of the underlying estate plan and legacy goals you have, but they may not feel comfortable serving in this role unless you’ve had the opportunity to speak to them about it. This is why it is recommended that you identify an experienced and qualified person who you can also trust to carry out your personal decisions. Set aside time to meet with a lawyer today to discuss your next steps. Our NH and Maine estate planning lawyers are resources for you and your needs.

Naming a Trustee

What Qualities Should I Consider in Naming Someone as Trustee?

One of the most important distinctions between a revokable and an irrevocable trust, concerns who will be appointed as the successor or initial trustee. If you are putting together an irrevocable trust, naming yourself as a trustee would defeat the primary purpose of this estate planning strategy. Naming a successor trustee of a revokable trust or a primary trustee of an irrevocable trust, however, requires careful consideration about the person you are choosing to install in this role.Naming a Trustee

There are several important qualities to consider. First, this should be a person who you trust when it comes to their overall judgment and ability to manage your investments. Second, they should also be able to communicate and speak coherently with your beneficiaries. Third, they must understand how to legally transfer trust assets to those beneficiaries when the time comes. Forth, they should be capable of handling what could be complex financial transactions.

Some people choose to use a corporate trustee because the scope of the responsibilities of managing a trust might extend beyond that of a lay person’s knowledge. Appointing professional trustees also requires consideration about the fees that would have to be paid to this professional.

Bear in mind that this could reduce the overall value of assets inside the trust, when funds from that trust must be used to pay a professional trustee. If you have further questions about the estate planning process, schedule a time to speak with an experienced estate planning lawyer in NH.

 

 

When Should I Use a Corporate Trustee as My Successor Trustee?

A successor trustee is the individual or entity appointed to handle trust affairs should you become incapacitated or pass away. If you are not sure that a family member or friend you intended to appoint in the role of successor trustee could handle this responsibility well or you fear that it could only spark further family conflict, you may be able to avoid some of these problems by using a trust company or the trust division of a bank.

No matter who you choose, your trustee should be professional and competent and have good skills when it comes to record keeping and decision making for distributing money to beneficiaries. A professional trustee might make the most sense in your case if you have a trust that is intended to last for a long time such as one that would provide for grandchildren.

Another example when it makes sense to choose a corporate trustee is if you have very valuable assets. In most simple revocable living trusts, however, that are designed for avoiding probate, it might not make sense to pay a professional because professional management in a successor trustee role is expensive.

Many trust companies won’t accept accounts that are below a certain minimum and will charge a percentage of the assets as the fee. Some of the potential downsides of going with professional management might include:

  • Not accepting other kinds of assets beside cash.
  • The management might not be as personal as that from a friend or family member.
  • Beneficiaries might have to deal with new people frequently as bank or trust company employees come and go.
  • Beneficiaries may not get a quick decision when they ask for trust funds since this will need to go through the other entity.

If you need help figuring out how to approach trustee issues, look for a time to meet with our NH trust planning lawyer.

What Is a Trustee Fee?

A trustee is a person who serves in an important role in managing the assets and administration of a trust. This person is also entitled to receive compensation based on their efforts managing the assets and the responsibilities associated with the trust. Trustee fees are payments for services rendered whether the trustee is an organization or an individual. Various duties are associated with the responsibility of a trustee and these duties are clearly outlined in the trust document.

The primary purpose of the trustee is to ensure that the grantor or creator’s wishes are honored when it comes to the trust beneficiaries. This can include distributing assets or payments from the trust to its beneficiaries and handling tax filings for the trust. When creating your own trust, you would typically specify the terms of payment in the trust document itself.

There are a few different ways that you might approach the process of trustee fees, such as a set percentage of the assets in the trust each year or a flat dollar amount each year.

If there are not many duties associated with the administration of your trust, this could lead to a trustee fee arrangement of an hourly payment for the person’s time. You can also establish a limit on how much can be paid out in trustee fees. State laws will determine the fees in the event that you do not document them in your trust.

If you have not yet appointed a trustee or are curious about how to choose whether an individual or an entity should serve in this role? Our New Hampshire estate planning law office is here to support you with these questions and concerns.

Schedule a consultation today with a trusted estate planning lawyer to learn more.