Selecting the right trustee is very important. A trust is an agreement between you and your trustee, who will ultimately be in charge of your assets and your personal affairs. The trustee is responsible for making sure the terms of your trust are being followed. The duties of a trustee typically include handling your financial affairs by paying your bills, making investments and maintaining accurate records of your finances. Clients ask if: can my attorney be my trustee? Choosing your estate planning attorney to be the trustee of your living trust is an option you should consider.
Is it a good idea to name my attorney as my trustee?
An attorney is always a good choice when you need someone to provide fiduciary services, such as a trustee. Attorneys have specialized skills and experience that can be a great value to clients. Also, the attorney who drafted the trust document is already intimately familiar with its terms, as well as the family and financial situation of the client. If necessary, your attorney can always obtain assistance with investment management by hiring an investment professional.
What are the ethical considerations?
There are no inherent ethical or legal issues that would specifically prevent an attorney from serving in the capacity of trustee. The normal ethical considerations that every attorney must take into account, while serving as a fiduciary to his or clients, still exist. There are often disclosures that need to be made to a client, so that attorneys can prevent certain conflicts of interest from occurring. Your estate planning attorney will be very familiar with the professional ethics requirements in this area, and should be able to prevent any problems before they start.
Attorneys are required to exercise professional judgment
When an attorney takes on the task of creating a trust for a client, it is proper for the attorney to inform the client of his or her own availability to serve as trustee. It must be presented as merely another option the client is allowed to consider. Yet, the attorney must not allow self-interest to interfere with his or her duty to recommend the best choice of trustee to the client. Care must also be taken to avoid violating the ethical rules regarding solicitation of clients and entering into a business relationship with a client, as these rules are set out by each state’s local bar.
Informed consent is usually sufficient to avoid ethical problems
As long as the attorney ensures that the client has received sufficient information to provide “informed consent,” there should be no problems with an attorney serving as trustee. “Informed consent” simply means that the attorney communicates to the client all possible risks and all available alternatives. When the client understands this information, but agrees to the proposed course of conduct, such as service as trustee, that clients has given “informed consent.”
If you have questions regarding trusts, trustees, or any other estate planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.