Conflicts of Interest

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., in Woodbury, New York
• Pages: 17-23

Many accountants and attorneys often act as trustees. This may happen

when the creator of the trust feels that he or she does not, for whatever

reason, wish to select a family member or a nancial institution as a trustee.

If an accountant or attorney is asked to serve as a trustee, then he or she

should make sure that there are not any potential conict-of-interest issues.

Conict-of-interest issues may be triggered for any number of reasons.

(1) The accountant or attorney who is considering serving as a trustee

may also be performing professional services for one or more bene-

ciaries of the trust. If that situation is applicable, then the accountant

or attorney should discuss this issue with all the appropriate parties

and indicate that this is an issue that should be addressed before he

or she is selected as a trustee.

(2)

These professional services may involve advisory services, nancial

planning services, estate planning services, and tax return prepara-

tion services for the beneciary of the trust.

(3)

If the conict-of-interest issue cannot be resolved, then the accoun-

tant or attorney should not agree to act as trustee.

Author’s Note

The AICPA TAI Task Force discusses this conict-of-interest issue in

the Practice Guide for Accountants Who Perform Fiduciary Accounting Services.

The AICPA Practice Guide cautions accountants who may act as a trustee

to be cautious and avoid any potential conicts of interest. In the case of

a potential conict of interest, the accountant must feel that he or she can

be objective in serving as trustee. The accountant, after full disclosure of

the potential conict of interest to the appropriate parties, should obtain

written consents from such parties to the effect that they do not object

to the accountant’s serving as trustee. However, the trustee remainder-

men who are not parties to these written consents may still challenge the

trustee decades later.

17

CONFLICTS OF INTEREST