Do You Know the Basics of Charlotte Trust Administration?

Charlotte trust administration is often an important component of estate planning. The importance of the trustee’s role cannot be overlooked. The trustee is the individual who has been selected for the responsibility of managing the trust property and performing the terms of the trust agreement. In order to properly fulfill the duties of a trustee, you need to know a few important aspects of Charlotte trust administration.

Charlotte Trust Administration Can Be a Complicated Process

A common misconception is that trust administration is just a matter of writing checks. A different approach can be required to handle the trust principal and any income the trust earns. That is something that many people overlook. Many trusts include provisions that deal with these two components separately. For example, the trust may instruct the trustee to transfer the principal to one set of beneficiaries and then transfer the income derived from the trust property to another set of beneficiaries. It is really crucial that you understand this aspect of Charlotte trust administration so you won’t make mistakes.

Trustees are Required to Provide an Accurate Accounting of Their Activities

Trustees are also responsible for maintaining an accurate and complete accounting of their transactions involving the trust property. In addition to mishandling investments, improper record keeping is a frequently litigated issue in Charlotte trust administration. Therefore, you keep a record of every action you take with the trust property, especially distributions. Following this rule will help you support your decisions and avoid liability.

Trustees Must Maintain Neutrality in All Dealings

As a fiduciary, the trustee is required to remain neutral in every dealing related to Charlotte trust administration. That means the trustee is expected to always look beyond their own interests and be fair to all beneficiaries. A trustee must follow the instructions in the trust document.  Neutrality can be tough if the trustee has any type of relationship with the trust beneficiaries or the family involved.

Trustees Are Expected to Be a Fiduciary in All Transactions

Trustees are expected to manage trust property only in a manner that will serve the best interests of the trust beneficiaries. Being a fiduciary means being someone trustworthy and honest in every way when administering the trust. Charlotte trust administration is essentially a legal obligation so if you violate your fiduciary duties you may be held personally responsible. For this reason, a trustee must understand the scope of their duties before engaging in any activity that could violate the provisions of the trust or the applicable laws.

Trustees Should Feel Comfortable Asking For Help

Considering the nature of the legal responsibility a trustee has, there may be times when the trustee needs assistance from a professional with regard to Charlotte trust administration and the trustee’s duties. This is especially true when the trustee is not experienced with handling investments. In fact, mismanagement of investments of trust property is one of the issues most often litigated.  So, if you need help, don’t be afraid to ask for it.

Charlotte Trust Administration Allows for Trustee Compensation

Typically, trustees are permitted to request a fee for their services. In many states, trustee fees are governed by statute and what is reasonable can vary. Corporate trustees often provide trust administration services on a set fee schedule.

Even though trustees can receive compensation, most trustees do not actually request a fee.  The reason is usually that the trustee has a relationship with the person who made the trust or the family and beneficiaries. However, once they have served as a trustee for several years without any compensation, having spent a significant amount of time performing their duties, people usually start to think about fees.

If this issue of fees has not been discussed ahead of time, then the trustee may have to deal with beneficiaries challenging the request. The trustee should talk with the beneficiaries early on about fair compensation.

Join us for a FREE seminar today!  If you have questions regarding trust administration or any other estate planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (704) 944-3245 (Charlotte, NC or Huntersville, NC) or for individuals in Kentucky at (606) 324-5516 (Ashland, KY) or (859) 372-6655 (Florence, KY). We are here to help!