Law Office of Rick Todd Blog

Wednesday, August 17, 2016

Trust Administration (Part Two) (Pros and Cons)

I’ve written on the importance of a trust administration lawyer before, here, and I am going to touch on the process again. Trust administration is becoming more and more of an issue for Americans because of the growing popularity of revocable living trusts. While I believe that revocable living trusts are unnecessary for most people, if a trustee has been chosen to administer a trust, he or she must face a task that can be even more daunting than a probate. That means trustees may need the assistance of an attorney.

Trust administration is not overseen by courts in the same way that probate is. When the idea for a trust is “sold” to someone by a lawyer, it may have sounded appealing. But now that the grantor of the trust is dead, the trustee is left with the potential for dealing with conflict without judicial assistance.

But, there is an advantage to opting for trust administration over probate: cost. Probate fees are generally measured by percentage of the value of the entire estate, while trust administration is measured hourly by an attorney. That can be a large difference in price depending on whether you hire a trust administration lawyer or one for probate-related services.

Trustees are like personal representatives/executors in that they have a fiduciary duty to administer an estate/trust in a completely honest manner. Many attorneys will argue that the fact that trust administration in Maryland is not done through judicial oversight is a good thing. However, I am more skeptical. Judicial and bureaucratic oversight almost certainly slows the distribution process down, though it does also make it easier for beneficiaries to complain if things are not being done appropriately. While trustees and personal representatives/executors have fiduciary duties to estates or trusts, that duty is only enforced to the degree that complaints are made. If errors go undiscovered (and this is more likely to occur in trust administration) then they might never be rectified.

In conclusion, when deciding between a will and a trust, a person must understand that the differences between the two continue on after death and affect family and loved ones. The benefits at death might be outweighed by the problems caused later on. To ensure that you are doing the best thing for you and for your loved ones, contact a qualified trust administration lawyer in Columbia, Maryland as soon as possible. 

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