The Elder and Disability Law Firm, APC
Reducing the risks involved with administering trusts
In California, more and more people are choosing to set up trusts as part of their estate plans. Today, many new types of trusts are available, and they are much more complex. Modern trusts may have portfolios that include far more than the traditional stocks, bonds and real estate. Some trusts might include businesses, collectibles, art, commodities and minerals. With more diversified portfolios, these trusts are extremely difficult to administer.
When grantors are trying to decide who to name as the trustees of their trusts, they should consider the potential risks that the trustees will face. Identifying what these risks might be may help the grantors to choose trustees who might be better able to manage the trusts and to minimize their risks.
Risk mitigation may be very important for trustees to help to protect themselves if they are sued. The trusts might contain provisions to advance money to pay for defense work if the trustees are sued. Trustees may also want to transfer the risks that they carry by purchasing insurance to protect themselves from liability. Grantors may want to talk to estate planning lawyers about choosing trustees.
Trust administration can be very complex and carry risks for the people who are named to serve as trustees. People who have been named as trustees may want to get help from experienced trust administration lawyers. The attorneys may guide their clients through the process of administering the trust so that they can help them to avoid making potentially costly errors. The attorneys may also help their clients to identify all of the potential risks that they might face so that they can take proactive steps to minimize them.