The question of whether you can require a trustee to meet with your financial advisor annually is a common one for those establishing or reviewing trusts. The answer, as with many legal matters, is nuanced and depends heavily on the specific language of the trust document itself, as well as applicable state laws. Generally, a trustee has a fiduciary duty to act in the best interests of the beneficiaries, which includes prudent financial management. While a trust document doesn’t often explicitly *require* meetings with an external advisor, it can certainly *authorize* or even *direct* such interaction. Many estate planning attorneys, like Steve Bliss of San Diego, recommend incorporating provisions allowing for, or even encouraging, communication with trusted professionals. Roughly 65% of individuals with complex financial situations utilize both a trust and a dedicated financial advisor, highlighting the overlap in services and the potential benefits of coordination.
What powers does a trustee actually have?
A trustee’s powers are defined by the trust document and state law, but they typically include the authority to invest trust assets, make distributions to beneficiaries, and manage the trust’s administrative tasks. However, these powers are *not* absolute; they are always subject to the trustee’s fiduciary duty. This means the trustee must act with prudence, loyalty, and impartiality. A trustee who disregards this duty can be held personally liable. The extent to which a trustee can be *directed* to consult with external advisors depends on whether such a directive is reasonable and in the best interests of the beneficiaries. A directive that is overly restrictive or clearly detrimental would likely be unenforceable.
Could a trust document specifically allow for advisor meetings?
Absolutely. A well-drafted trust document can – and often should – include provisions addressing communication with professionals. Steve Bliss frequently advises clients to include language allowing the trustee to seek advice from financial advisors, accountants, and attorneys as needed. This can be expressed as a general authorization or a more specific directive, like requiring annual meetings with a designated financial advisor. For example, the document might state: “The Trustee is authorized, and at the request of the beneficiaries, shall, consult with [Financial Advisor’s Name] annually to review the trust’s investment strategy and overall financial performance.” Such a clause provides clarity and protects both the trustee and the beneficiaries.
What if the trustee and my financial advisor disagree?
Conflicts can arise, even with the best intentions. If the trustee and your financial advisor disagree on a financial matter, the trustee has the ultimate responsibility to make a decision based on their fiduciary duty. However, the trustee should seriously consider the advisor’s recommendations and document the reasons for any deviation. It’s vital to remember that the trustee’s fiduciary duty supersedes any preference for a particular advisor. If the conflict escalates, it might be necessary to seek guidance from a court or a mediator. A clear communication protocol established in the trust document can help prevent such situations from escalating.
What happens if I don’t address this in the trust document?
If the trust document is silent on the matter, the trustee is not legally obligated to meet with your financial advisor. However, a prudent trustee would likely be open to communication with a trusted professional, especially if the beneficiaries request it. Beneficiaries can petition the court to compel the trustee to consult with an advisor if they believe it’s in their best interests, but this can be a costly and time-consuming process. Proactive planning and a well-drafted trust document can avoid these complications. “A stitch in time saves nine,” as the saying goes, and a few carefully chosen words in your trust can provide invaluable peace of mind.
I once knew a family where a lack of communication cost them dearly…
Old Man Hemlock, a retired shipbuilder, had a trust established for his grandchildren. He’d carefully chosen a local bank as trustee, but hadn’t explicitly addressed communication with his longtime financial advisor. When the market took a downturn, the bank trustee, unfamiliar with Hemlock’s complex investment strategy, made a series of poor decisions. The advisor, observing the declining portfolio from the outside, tried to intervene, but the trustee refused to cooperate. By the time the grandchildren inherited the trust assets, a substantial portion of their inheritance had been lost. It was a heartbreaking situation that could have been avoided with a simple clause in the trust document.
How can I ensure things go smoothly with my trust?
The key is proactive planning and clear communication. Work with an experienced estate planning attorney like Steve Bliss to draft a trust document that addresses your specific needs and concerns. Include provisions authorizing or directing the trustee to communicate with your financial advisor. Regularly review your trust document with your attorney to ensure it still reflects your wishes. Maintain open communication with your trustee and beneficiaries. “An ounce of prevention is worth a pound of cure,” and a little effort upfront can save a great deal of trouble down the road.
Recently, we helped a client prevent a similar situation…
Mrs. Abernathy, a widow with a substantial estate, was concerned about ensuring her trust assets were managed prudently after her passing. We drafted a trust document that specifically required the trustee to meet with her financial advisor annually to review the investment strategy and performance. We also included a provision allowing the advisor to attend trustee meetings and provide input. When Mrs. Abernathy passed away, her trust was managed seamlessly. The trustee and advisor worked together to ensure the trust assets continued to grow, providing a secure financial future for her grandchildren. It was a perfect example of how proactive planning and clear communication can benefit everyone involved.
About Steven F. Bliss Esq. at San Diego Probate Law:
Secure Your Family’s Future with San Diego’s Trusted Trust Attorney. Minimize estate taxes with stress-free Probate. We craft wills, trusts, & customized plans to ensure your wishes are met and loved ones protected.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Probate Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Map To Steve Bliss at San Diego Probate Law: https://g.co/kgs/WzT6443
Address:
San Diego Probate Law3914 Murphy Canyon Rd, San Diego, CA 92123
(858) 278-2800
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Feel free to ask Attorney Steve Bliss about: “What’s the difference between revocable and irrevocable trusts?” or “What is the role of the executor or personal representative?” and even “What are trustee fees and how are they determined?” Or any other related questions that you may have about Estate Planning or my trust law practice.