Though it means well, a family trust is, sometimes, the cause of disputes between family members. There are siblings fighting over selling a family stock and cousins arguing about unequal inheritance from a childless uncle. But these kinds of disagreements between beneficiaries can be avoided if there are successor trustees who can mediate. It is, therefore, imperative that co-trustees understand their roles even before the draft of the deed.
Here are the things you should do before signing as a co-trustee of a family trust:
Understand Your Duties
In the event of death or incompetency of the present trustee, co-trustees take over the management of the family trust. This means you’ll be fulfilling legal duties, including filing a tax return and closing the trust the moment the beneficiaries reach the required age written in the deed.
Have a Good Knowledge of the Assets
As Rainey Collins Lawyers and other family trust lawyers in Wellington say, you must know all the assets held by the trust. More importantly, as the caretaker of the trust, you must ensure that these assets are well-maintained and protected throughout the entire period that the trust is open.
Decide If You’re Willing to Become a Fiduciary
After you understand all the responsibilities of a co-trustee, it all boils down to your decision whether you’re willing to stand between beneficiaries, as well as fellow trustees, in times of legal problems. Sometimes, even your closest family members may sue you over your fiduciary actions — and that is not something anyone would want.
Despite the challenges that come with the responsibilities of being a co-trustee, it is still considered an honouring role. Whether it’s your parent, sibling, or business partner, the original trustee believes so much in you that he or she asked you to do this. But if you’re still unsure about the role, you can always ask the guidance of a family trust lawyer in your state.