The Trustee of a trust or an estate has to stay on top of a lot of important responsibilities. Unfortunately, making a mistake in their performance of their duties could have serious consequences.
If there are more than one Trustee serving as co-Trustees, both individuals serving as Trustees as well as the beneficiaries of a trust or estate should familiarize themselves with common mistakes in testamentary estates. Being aware of potential issues will help them identify and avoid them.
1. Going it alone
To accurately determine the value of a trust estate and verify outstanding obligations, Successor Trustees may have to sort through a lot of information.
Many Trustees try to shoulder sole responsibility for financial management decisions. Not seeking professional input from legal counsel or an accounting firm could deprive them of the guidance that they need to manage their duties effectively.
2. Errors serving legal notices
When Trustees are overseeing the administration of a trust estate, they have to send legal notices to creditors, trustees, and other interested parties. Sending a notice in a manner that is inconsistent with applicable procedural requirements will result in invalid service. Consequently, invalid notices may lead to considerable delay and expense.
3. Poor recordkeeping
Good bookkeeping practices help Trustees stay organized. If they get lax about documenting financial activity, they are going to be more likely to make mistakes reconciling expenses. Meticulous recordkeeping enables Trustees to render a comprehensive, accurate accounting to beneficiaries.
Ultimately, Trustees have to be conscientious about the high duty of care that their role entails. Strong attention to detail can spare them from setbacks and stress.