What Does It Mean When One Person Is Listed as Both a Beneficiary and A Trustee?

Should the same person who is getting something from a trust also serve as its trustee? This is a question that might come up as you create a California trust for estate planning purposes.

Establishing a trust is one of the most popular estate planning methods for protecting your interests and ensuring smooth transfer of assets in the future. Setting up a living trust to avoid the delays and expenses of probate is very common in states where the cost of administration is established by a fee schedule from the probate court.

This commonly happens in places such as New York and California but can occur in other states as well. A trust relationship generates five key duties: the duties to segregate property, the duty to give personal attention to the trust affairs, the duty to provide accounting to the beneficiary the duty to carry out the terms of the trust, and the duty to be loyal to the beneficiaries.

When a family member is both a trustee and a beneficiary of the trust, this could generate potential ethical questions or concerns from other beneficiaries of the trust. It is very important that you inform your trustee of your intention to name them as both trustee and beneficiary and highlight the importance of keeping track of all details of any transactions related to the trust.

Since a trustee may need to share an accounting of the trust with the beneficiary anyways, you should prepare them for this well in advance so as to minimize the possibility of disputes over how the trust affairs were managed. Set aside a time to meet with a qualified and experienced estate planning lawyer in Pasadena, CA to learn more.







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