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Troubled Trust Administrations: When Your San Diego Trust is Troubled

Some Trust administrations go smoothly and others devolve into all-out warfare in Court, but somewhere between harmony and all-out war stands troubled Trust administrations. Those are the Trusts where the Trustee and the beneficiaries can’t seem to agree on anything. Where information is not easily shared, decisions are questioned, and everything seems to be hostile. Not so hostile as to prompt anyone to go to Court, but just to the brink of war.

When administering a Trust becomes hostile, it can be best to take a step back, and try to get off to a better start. Most of the time, hostility comes from (1) a lack of communication and information, and (2) a misunderstanding on how best to administer the Trust. The Trustee must understand the duties of a Trustee, the first of which is to communicate often. The beneficiaries must also understand their proper roles. Beneficiaries do not call the shots or make decisions about Trust assets—that’s the Trustee’s job. Legally, the Trustee is the legal owner of the Trust assets and has decision-making authority over the Trust assets. The beneficiary is the beneficial owner of the assets and all actions taken by the Trustee must be done with the beneficiaries’ best interests in mind.

In many cases, once Trustees and beneficiaries come to a disagreement, they dig their heels in and things become downright hostile. It doesn’t need to be that way. By taking a step back and thinking about the best course forward, war can be averted. It starts with building trust between the Trustee and the beneficiaries. As with any relationship, trust between the parties goes a long way.

And there is no better way to build trust than to communicate. Talk about the options, and then allow the Trustee to make the right decision. Oh, and a nice little preliminary distribution never hurts either. Give the beneficiaries a little money and they see that the Trustee can be trusted. Good faith is about give and take.