As an increasing number of North Carolina residents are establishing new estate plans, trusts are becoming more complex. Today’s trusts contain many more assets, including entire businesses. As new trusts evolve, more litigation is occurring to test these plans. It is important that trustees understand their roles and the potential risks of litigation so that they can protect themselves.
Grantors should think carefully before they choose their trustees. They should think about whether the people they are considering will have the time and knowledge required to manage the trusts. If their trusts will include businesses as part of their portfolios, the grantors should make certain that succession plans are also in place.
The trusts can include provisions to advance defense costs in the case a lawsuit is filed. Trustees can lower their risk by securing adequate insurance that can protect against lawsuits. The grantors should also think about how bad facts should be handled and what might happen if the relationships between any co-trustees sour.
Administering trusts is a complicated task that involves the application of legal knowledge. Trustees are expected to fill a broad range of duties, and they should always act in the best interests of the beneficiaries. People who have been named trustees may want to seek help from trust and probate administration attorneys. A lawyer may help to guide trustees to help them to avoid making mistakes that could result in lawsuits. Grantors who wish to establish trusts may also want to get the advice of experienced estate planning lawyers about how to choose trustees. The attorneys may recommend professional fiduciaries with good reputations if there isn’t someone within the family who could handle the role.
