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HOW DO I
TITLE ACCOUNTS?
Each bank or investment firm may have its own format, but generally
you may use, for a trust, "Alice Carroll, Trustee, Lewis Carroll
Trust dated January 19, 1998," or, in a shorthand version, "Alice
Carroll, Trustee under agreement dated January 19, 1998." For an
estate, "Alice Carroll, Executor, Estate of Lewis Carroll,
Deceased."
HOW DO I
SIGN MY NAME IN A FIDUCIARY CAPACITY?
An executor signs: "Alice Carroll, Executor (or Personal
Representative) of the Estate of Lewis Carroll, Deceased". A trustee
signs: "Alice Carroll, Trustee".
WHERE DO I
HOLD THE ESTATE OR TRUST ASSETS
If you engage a trust company, they will open an account in the name
of the estate or trust and provide regular statements showing all
income and disbursements. You can open an investment account with a
bank or brokerage company in the name of the estate or trust. All
expenses and disbursements must be made from these accounts, and you
should receive regular statements.
HOW (AND HOW
MUCH) DO I GET PAID?
Fiduciary work is time-consuming and can be difficult; it is
appropriate to seek payment for your services. The will or trust
agreement may set forth the compensation. If they do not, many
states provide either a fixed schedule to which you must adhere, or
allow "reasonable" compensation, which usually takes into account
the size of the estate, the complexity involved, and the time spent
by the fiduciary. Executor's or trustee's fees are taxable
compensation to you. As stated above, several states do not permit
the fiduciary to pay his or her own compensation without a court
order; check with your attorney before you write yourself a check.
WHAT IF A
BENEFICIARY COMPLAINS?
Even professional fiduciaries, such as trust companies, receive
complaints from time to time. The best way to deal with them is to
do your best to avoid them in the first place by following these
guidelines and consulting with an attorney experienced in estate
administration. Many complaints arise because beneficiaries are not
kept up to date on the administration of the trust or estate.
Frequent communication with beneficiaries is a must. Whenever
possible, consult with an attorney who specializes in trust and
estate matters when a complaint involves more than routine issues.
CAN I BE
SUED OR HELD PERSONALLY LIABLE?
Your errors or mismanagement of a trust and estate can indeed
subject you to personal liability. Common pitfalls include not
paying tax or filing returns on time, improper investment choices
(whether too conservative, too speculative, or favoring one
beneficiary over another), self-dealing (buying assets for yourself
or your family from the estate or trust, whether or not at market
price), or allowing property or casualty insurance to lapse,
resulting in a loss to the account. Your best protection is to get
good professional advice and to fully document your actions and
decisions.
HOW AM I
DISCHARGED AS FIDUCIARY AT THE END OF THE ADMINISTRATION? WHAT IF I
WANT TO RESIGN?
Whether you stop acting because the estate or trust has terminated,
or you wish to resign before the conclusion of your administration,
you must be discharged, either by the local court or by the
beneficiaries. In some states, this is a formal process, involving
the preparation of an accounting. In others, a relatively simple
document signed by the beneficiaries can be used. If you are
resigning prior to the conclusion of your administration, check the
document to see who succeeds you as fiduciary. If no successor is
named, you may need a court proceeding to appoint a successor before
you can be discharged.
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