Estate Planning Newsletter

• Taxation of Long-Term Care Insurance After HIPAA
  People are living longer, but for many a reality of aging is that at some point they are unable to care for themselves. The costs of retirement homes and in-home care are rising, generating concerns for many on how to pay for the cost... Read more.
• Special Power of Appointment Adds Flexibility to Your Estate Plan
  What is a Power of Appointment? A power of appointment is the power given by one person to another (referred to as the “holder” of the power of appointment) to designate who is to receive an asset.... Read more.
• Estate Planning Under the HIPAA Privacy Rule
  The Health Insurance Portability and Accountability Act of 1996 (HIPAA) became effective on April 14, 2003. HIPAA establishes national standards for the protection of certain health information. The purpose of HIPAA is to ensure that a... Read more.
• Certain Real Property May Qualify for Special Use Valuation
  Calculation of the Value of Estate Assets Estate taxes are calculated based upon the value of the assets in the estate. One duty of the executor or administrator is to inventory all estate assets and assign a... Read more.

• Not all end-of-life decisions are covered in a will. Here’s what else you need
• ‘Toxic dispute’ over Zaha Hadid’s £100m estate finally settled
• Executor of a family estate? Here’s how to avoid infighting over inherited wealth
• What to tell your adult kids when planning your estate
• 4 ways wealthy families are trying to head off heftier estate taxes under a Biden administration

What are the Duties of a Trustee?

Every trust must have a trustee to properly administer the elements of the trust. Trustees can be individuals, financial institutions or even organizations.

A trustee follows the precise instructions of the trustor (or the trustor’s authorized representative), and also adheres to rules imposed by law.

Prudent Person Rule

Trustees are subject to the “prudent person” rule. This rule states that trustees should use the same standard of care and diligence that any sensible person would use in managing property. Additionally, a trustee should make a strong effort and utilize all of his/her skills in caring for the trustor’s property.

Responsibilities

A trustee has the duty to accomplish the following:

• Administer internal affairs
• Manage property
• Invest property
• Distribute income and principal
• Deal with beneficiaries impartially
• Use discretion over the important areas of the trust

Beneficiaries

A trustee has a fiduciary duty to the trust’s beneficiaries as well as to the trustor. In dealing with beneficiaries, a trustee should:

• Use property only for the beneficiaries’ interest
• Disclose important facts
• Provide additional information related to the trust upon request of the beneficiaries

Improper Activity

A trustee should not:

• Use trust property for personal benefit or purposes not related to the trust
• Acquire interests in conflict with those of the beneficiary
• Sell property to himself/herself
• Delegate his/her duties to another individual

If a trustee is suspected of improper activity or misuse of his/her discretionary decision-making powers, the court will review the trustee’s actions after a petition is filed by the trustor or any beneficiary. A trustee may also petition the court for a review if beneficiaries question his/her decisions.

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