Common Problems of Trustees in Trust AdministrationTrust can serve a variety of functions such as preserving family assets, avoiding estate taxation, and keeping wealth out of the probate process.  While these invaluable legal constructs can serve to protect what you have built their management can be complicated.  Here are some common problems of trustees in trust administration.

The Trustee

When a trust is created, a person or entity must be designated to serve in the role as trustee.  The trustee should be a person or organization which can be relied upon to oversee the trust according to their required duties.  Trustees are in a critical position which comes with numerous obligations and responsibilities.


Certain issues can arise when there are multiple trustees or “co-trustees.” Co-trustees will have to come to agreements on a multitude of issues such as making investments, handling property, and keeping records.  If they are unable to act jointly in a timely manner due to logistics or disagreements, it could significantly impair their administration of the trust.

Under Michigan law, lack of cooperation among co-trustees which substantially impairs the administration of the trust can serve as a basis for the removal of one or multiple trustees.   To avoid complications and having to go to probate court it will be important to have the attorney who creates your trust include provisions which will address this circumstance.

Trust Funding

The creation of a trust is an excellent way to protect your assets and assure they are administered according to your requirements and instructions.  Sometimes, a person creating a trust will believe that establishing the trust is all they are required to do.  However, it is essential that the trust be appropriately and adequately funded for its intended purpose.  The trustee can only manage trust assets which are properly titled and placed into the trust body.   After consulting with your estate planning attorney, you should be able to accurately identify the right assets and successfully direct them to the trust.

Outdated Trust Terms

After the creator establishes a trust, they may consider the matter concluded.  Down the road, there could be changes to the law or the beneficiaries’ circumstance which make the trust less effectual.  Further, trust assets may have changed in value, or the trust creator may need to add capital to the trust.  Consulting with an estate planning attorney at regular intervals after the trust has been created can help you ensure that your trust can achieve its purpose and be properly administered.

Deceased Beneficiaries

As indicated above, when a trust is created it is usually in view of the circumstances at the time of its drafting and execution.  When a named beneficiary is deceased, and the trust has not been amended, there can be problems with trust administration.  This and other possible contingencies need to be explored with your estate planning attorney when the trust is created and reviewed.

Trust can be instrumental to your estate plan.  However, they can be complicated, and without careful planning, your trust may not serve its intended function.  We have experience with estate planning and can provide you with the guidance you need in preparing an effective trust. Please contact us online or by phone if we may be of assistance.

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