Dear Len & Rosie, My father passed away a year ago this week. He had a living trust and my brother is the trustee. There are five children surviving. My mother is also deceased. After my dad’s death, my sister, my brother the trustee and I began clearing the house of 45 years worth of possessions.
We took out two Dumpsters of garbage, and gave loads and loads of items to the Goodwill. This took us many emotional months to accomplish. Our other two siblings were not interested in helping, and when asked if they wanted anything responded by telling us to take whatever we wanted. The valuable items were divided - we got first choice as the other two were not interested - but we did give them a share.
Now my brother the trustee received a certified letter from our oldest sibling stating that she is entitled to an accounting of the distribution of the items. We do not know her motive. She may request some of these items or maybe she wants money. What is our legal obligation to her request? Isn’t the trustee entitled to divide the items as he believes is fair? -- Annette
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The problem with being a trustee is that despite being closely related to the trust beneficiaries, your brother is still a fiduciary. He’s like the person standing behind the counter at the bank. He owes each beneficiary a fiduciary duty, which is equally a duty of competence (don’t mess up) and a duty of loyalty (treat all beneficiaries fairly).
As we have told readers before, a trustee of a trust has as much work to do as the executor of an estate in probate. The advantage of a trust is that your family gets to avoid the built in time delays of probate, as well as the statutory probate fees that are very lucrative for lawyers.
A trust also gives a family the opportunity to cut corners. If everyone gets along, trust administration could be little more than a paperwork drill of paying off debts and taxes and shoveling everything into the names of the beneficiaries. But the decision as to whether or not to take the “quick and dirty” route isn’t one your brother the trustee gets to make. Trust beneficiaries are entitled to an accounting, and if your older sister did not waive an accounting, she’s still entitled to one.
Your brother has a choice. He can either attempt to provide your sister with an accounting, or he can ignore her and hope she’ll go away. That if she hires a lawyer and petitions the court, there is a very good chance the judge will order a full accounting. Your brother can argue that your sister waived a trust accounting, at least with respect to the personal possessions, but he hasn’t got anything in writing.
People like your sister who are unwilling to pitch in and help the family when there’s an illness or death are the same people who insist on squeezing every last dime out of a trust or estate, no matter how much work others have to do. Both behaviors are an expression of selfishness. The lesson here is that trustees should seek legal help when administering a trust, if only to make sure that they are doing everything correctly and that if they cut corners, they aren’t going to expose themselves to future liability.
Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, at 996-4505 or lentillem .com. Len also answers legal questions each weekday, 1-2 p.m., and Sundays, 4-7 p.m., on KGO Radio 810 AM.