Does a Designated Trustee Need to Hire a Lawyer?


Video Summary


Hi!  I’m Chip Waller. Does a designated trustee need to hire a lawyer to administer a Trust?


Usually the designated trustee is a successor to a decedent. So the answer is, I suggest that you contact an attorney, like me, and find out what your duties and responsibilities are as a successor trustee as well as can you be held liable if you don’t follow the Florida statute for the Florida Trust Code.


Some of the things that you need to do as a successor trustee is obtain a Federal Identification Number because you're dealing with monies that are not yours, and you don’t want to have to report any income under your Social Security number because it’s not your money or your income.  And you need to file what they call a Fiduciary Tax Return, a 1041.


Next as a successor trustee you're required to send a copy of the Trust to all the beneficiaries.  And that’s sometimes not what anybody wants to know about, but particularly if there’s a distribution or if you're supposed to pay income for life to someone.  But everyone who is a beneficiary under the Trust is to get a copy of the Trust document.


You also usually have many questions about, well, should I pay all the creditors?  Well, and now can I – when can I distribute all this money and not be responsible for the creditors’ claims?  That’s usually a fairly tough question.


And one of the other responsibilities that you have, and potential liability for, is doing an accounting.  So you initially have to prepare an inventory and send out, to all the beneficiaries, an inventory of all the assets.


Once they get that, well then they're entitled to an annual accounting which sets forth how much income and what transaction took place.  And if you fail to do that, you have liability for many, many, many years to come and have potential liability.


So, as my recommendation, that before – if you're designated as a trustee of a Trust, that you consult with an attorney to find out what your duties, responsibilities and liabilities are as far as serving as a successor trustee, and decide if you want to undertake those responsibilities and potential liability.


If you have any questions give me a call at 727-847-2288.  Thank you!