Family members serving as trustees may face difficult challenges

Family members are often called upon to serve as trustees for the estates of other relatives. During their trust planning, Oklahoma City residents might believe it is in the best interests of their beneficiaries to designate a trustee who personally knows the heirs. It is understandable to think that a family trustee will keep the best interests of other family members in mind when dealing with trust issues.

However, many financial advisors caution that it can be difficult and emotionally draining to serve as a trustee for one’s own family trusts. A great deal of responsibility is placed upon a trustee, such as managing the finances of a disabled beneficiary or young child, or caring for the grantor of the trust if they become incapacitated. It can also be difficult to distribute the trust assets after the grantor’s death especially if other family members dispute the terms of the trust or challenge the trustee’s authority.

Family trustees must remain professional and impartial, even if they are close to their family members. It may be beneficial to seek professional help in managing the trust from estate advisors and tax experts. It is advised to carefully document all decisions related to a family trust and to ensure the trust’s terms are clear and easily understood to avoid confusion or litigation.

Many estate professionals say that family members who agree to serve as trustees are unaware of the difficult challenges the job presents. It can also help, before agreeing to serve as a trustee for other family members, to be sure there is an option in the trust to resign and designate another trustee if the task is too overwhelming.

Source: Morningstar, "6 Tips for Family Trustees," Deborah L. Jacobs, June 27, 2015

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