Kathryn T. Joseph & Associates, Inc.
216-245-0504

Risk mitigation important consideration for trustees

An increasingly complex legal and financial environment has developed in Ohio and elsewhere as a large multi-generational wealth transfer has begun. One market intelligence firm estimates that the next three decades will oversee a wealth transfer of $16 trillion. With more estates holding substantial assets, the potential risks of legal problems are rising. New forms of trusts have emerged, and the people tasked with administering them should fully consider their fiduciary responsibilities and personal liabilities.

As trusts have expanded their purposes, the types of assets held by them has also diversified. Estate planners now use trusts to manage more than stocks, bonds and real estate. People have developed trusts to hold assets like collectibles, art, and family businesses. A trust containing an operating business could confront the trustee with a choice between representing the interests of trust beneficiaries or other company shareholders. Complicated trusts often require a team of trustees, which introduces the possibility of disputes between trustees.

To head off future conflicts, the designers of trusts could take time to look for exposure to liability and adjust the terms to limit risk. The trust should clearly define the roles and responsibilities of the trustees and explain the consequences for failing to discharge duties properly. Insurance policies might also be included in the trust, which could pay a trustee's legal expenses should a beneficiary or other trustee launch a legal claim.

A person who wants advice about trust administration could consult an attorney familiar with estate planning. An attorney could study the terms of the trust and provide an opinion when there is a question of interpretation.

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Kathryn T. Joseph & Associates, Inc.
Executive Commons West
29425 Chagrin Blvd.
Suite 305
Cleveland, OH 44122

Toll Free: 888-335-6650
Phone: 216-245-0504
Fax: 216-765-8817
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