To be or not to be: should I be my client's trustee?

• Author: Eisenberg, Michael M.
• Position: Practice niche

When Shakespeare wrote these words, I'm sure he wasn't thinking about the possibility of CPAs becoming the trustee of their deceased client's trusts. But it is a question that will come up in our practices.

Many CPAs with a traditional practice of write-up work and tax preparation are finding more lee pressure on these services. for example, the IRS wants to prepare tax returns for five. While we do not know what impact future tax reforms could have on our profession, we can ask what ii an effect has your client's use of QuickBooks had on your practice?

As CPAs. we often know more about our clients than anyone eke sometimes including the clients themselves. Our clients value our opinions and as such, there are times when they will ask us:

1. Who would we suggest to serve as trustee of their affairs?

2. What are the duties and responsibilities of a trustee?

3. And finally, "Oh, by the way. would you be willing to act as my trustec?"

   Many clients ask this final question because they understand that family members may be ill prepared to undertake the complex role of trustee or have personal interests that could cloud judgments.

   And while CPAs may fit the fiduciary role best because of their tax, accounting and financial planning backgrounds, as well as their judgment and natural aversion to risk, there are considerations to make before taking on the role of trustee.

   Before You Say 'Yes'

   There is a probate code section that went into effect Jan. 1. 2009 (Sec. 6530) that defines a fiduciary and states. with certain exception, if someone is serving as trustee for three or more people (who are not family members) they must register with the state of California as a professional trustee. One of the exceptions to this requirement, however, is someone who holds a current and active CPA license, So, apparently, even California thinks CPAs would make good trustees.

   Consider. too, a variation of the three R's (reading, writing and arithmetic) we learned when we were young. As we think about being a trustee, those R's become risk, responsibility and reward.

   Before accepting the role of trustee, know that:

   * You must have an understanding and appreciation for the duties and responsibilities of a trustee.

   * The probate code provides that a trustee must administer the trust with the reasonable care, skill and caution that a "prudent person" acting in a like capacity would do.

   * The trustee must act in good faith and actions must be consistent with the trust's...