Trustee Liability Issues

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., in Woodbury, New York
• Pages: 13-14

Many individual trustees may not have access to accountants and/or attor-

neys who are skilled in duciary taxation and in duciary accounting

services. In addition, accountants and/or attorneys who are skilled in

duciary taxation and duciary accounting services are in high demand

and generally command high hourly rates.

It is possible that annual fees for the preparation of annual duciary

income tax returns may range from a low fee of several hundred dollars

to an annual fee of several thousand dollars or more. The fees are based

on many facts, including

(1)

the number of transactions that the trust has during the calendar

year,

(2) the time it takes the accountant to analyze the transactions, and

(3)

determining the accounting income that must be paid to the trust

beneciaries.

The liability of the trustee may be triggered because the trustee does not

engage a qualied accountant and/or trust attorney to assist him or her

in understanding what the duties of a trustee entail.

If a trustee misinterprets the terms of the trust document, then he or

she may have headaches if the trust beneciary challenges the trustee’s

actions at a later date. This can happen if the trustee does not understand

the terms of the trust document and does not retain a competent accoun-

tant or attorney to work with him or her.

Many individuals who act as a trustee may not be aware of the

fact that the trust laws of the state that has jurisdiction of the trust

have been completely revamped. These revised trust laws may catch

a trustee off guard. It is possible that the trustee’s ignorance, although

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TRUSTEE LIABILITY ISSUES