Although estate planning can be complex in any family, lawyers find that large and blended families tend to face extra challenges. More people means there are likely to be more ideas and hopes about how assets can be divided, creating the possibility for more conflict. Estate lawyers explain how independent fiduciaries may be helpful.
An Ounce of Prevention?
Experts remind us that thoughtful, advanced preparation of our estate plans is key to advancing familial harmony across generations. Often, the greatest gifts we can offer are courageous conversation, the communication of our intentions and the mending of conflicts. Nonetheless, human nature makes family dynamics challenging, even in the best of circumstances. Add grief to the mix and we can never quite be certain of challenges set in motion when it comes to divvying up assets. In addition to taking care with the establishment of a will or trust, lawyers suggest considering an independent fiduciary to administer affairs. As observed in JD Supra, blended families might even find a blended solution helpful:
To minimize potential conflict between a surviving spouse and your biological children, you may consider naming your spouse and a biological child as the personal representatives of your estate and the trustees of your trust. Alternatively, you may wish to name an independent individual (or corporate fiduciary) to serve as personal representative and trustee, either with a family member (spouse and/or child) or independently. An independent fiduciary can help to minimize potential conflict by approaching situations with an unbiased perspective.
Understanding Independent Fiduciaries
So what exactly is the role of an independent trustee? Dummies offer this explanation:
Every trust must have a fiduciary, in this case, a trustee, to administer the trust assets. The two major types of trustees are independent trustees and family trustees. In general, both independent trustees and family trustees assume responsibility to invest the trust’s assets. Both kinds of trustees must also balance the desires of the trust’s creator—the grantor or settlor—with the needs of the beneficiary, the one who receives the income from the trust’s assets.
Independent trustees, or fiduciaries who aren’t named in the trust as either grantor, beneficiary, or remainder-men, can be important for a trust to run smoothly. Whether they’re trusted friends of the grantor or are banks, trust companies, lawyers, or accountants, independent trustees owe their primary allegiance to the grantor. The grantor relies on independent trustees to make decisions that best serve the interest of the trust, rather than that of any beneficiary or remainder-man.
All trustees, whether familial or professional, are required to act in the best interests of the trust and beneficiaries. Given the significant fiduciary duties undertaken by your designated trustees, the trust agreement you create with your lawyer may require a trustee bond— a specific type of fiduciary bond, which protects the interests of the trust and its beneficiaries in accordance with applicable state law. Essentially, trustee bonds guarantee the faithful performance of the trustee. As a leading national provider of a comprehensive fiduciary bond portfolio, Colonial Surety makes it easy and efficient to obtain a trustee bond. Just get a quote online, fill out the information, and enter your payment method. Print or e-file the bond from anywhere—even the law office.
Trust and Estate Lawyer?
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