Please also forward this blog post to anyone else who would be interested. At the request of friends I have also posted below the video the text of the discussion. Thank you. Dave Tate
California Trustees – What Would Keep Me Up At Night – February 2015
Hello I’m Dave Tate. I’m a San Francisco litigation attorney and I also represent trustees in trust administrations. This discussion is for California trustees, and what would keep me up at night February 2015.
Trustee responsibilities are extensive and they arise from different sources including the wording of the trust itself, statutes and case law. Of course you have to cover all areas of your trustee responsibility, but here is my list of primary issues that would keep me up at night as a trustee. This list is not in any particular order.
First, do you understand what the trust says and requires?
Second, have you marshalled and safeguarded the assets that are in or that are supposed to be in the trust? Are they in the trust and under your control?
Third, do you really understand your legal responsibilities including the wording and requirements in the trust, what the probate code and case law require of you? As a trustee you are a fiduciary. You have one of the highest standards of care, responsibility, liability and unbiased fairness and good faith required by law.
Fourth, are the trust assets being invested, managed and recorded properly and prudently? You need to evaluate and manage the returns and the risks, in accord with the wording of the trust and your fiduciary duties. So, for example, the stock market goes up and down. If the market goes down, is your approach to the portfolio management designed to help you avoid liability for losses?
Next, do you have the proper fiduciary demeanor and decision making approach required of a trustee?
Sixth, is the trust cash flow prudently managed? You might, for example, through no fault of your own have a trust with declining asset values or liquidity issues.
Next, do you know what to do if you have beneficiaries who are disagreeing with your decisions, or who are threatening litigation?
Eighth do you know what information you must or possibly should provide to the beneficiaries?
Ninth, do you understand that you have personal liability exposure for the actions that you take or don’t take as the trustee? You are required to be prudent with risk management. Also consider possible fiduciary insurance coverage although in most situations it isn’t required.
And last on this list, when necessary do you consult with professionals to advise you on your fiduciary duties and trust administration management?
That’s it for now. You can find more information at http://californiaestatetrust.com Thanks for listening.