10 Challenges when a Family Fiduciary Administers an Estate or Trust

Administering an estate or trust is no simple task. But for family fiduciary, the task can seem impossible.  Though family fiduciaries are aware of the wishes of their family members in ways a third party fiduciary never could be, they aren’t typically unaware of the common law and statutory requirements that govern the management of an estate or trust.

Many requirements exist to ensure that beneficiaries receive adequate information about the administration of the estate or trust. Add unique family dynamics and the loss of a loved one to these complicated and legalistic requirements and you have a recipe for significant family disagreements. Below are some of the most common.

Challenges Posed by Family Administration of an Estate or Trust

  1. The distribution of tangible personal items for which there were no specific disposition in the revocable trust or will. The distribution of personal items can easily result in disagreements because different family members may assume the same items were intended for them.
  2. The distribution of assets to family members in satisfaction of the estate or trust. Even when the disposition is carried out, non-fiduciary family members sometimes feel like the fiduciary family member was favored in some way by the decadent.
  3. Disagreements about who should serve as legal and tax counsel to the estate or trust and what they should be paid.
  4. Whether outstanding bills against the estate or trust were settled properly, and whether claims on behalf of the decadent were settled appropriately.
  5. The disposition of estate or trust property, and at what price it should be sold.
  6. Questions about the completeness of the estate or trust inventory. Is the fiduciary reporting all of the assets of the decadent?
  7. Failure to adequately communicate with the beneficiaries. Even if the fiduciary is compliant with all communication requirements, beneficiaries may feel left out of the loop and assume the worst.
  8. Not consulting with beneficiaries over certain administrative duties of the fiduciary, even if there is no legal requirement to do so.
  9. Beneficiaries often fail to understand the huge administrative complexities placed on the family fiduciary. This can be a source of conflict.
  10. The family fiduciary assuming that the other family members will simply trust them. When the family fiduciary receives a request from a family member for an inventory or accounting of the estate or trust, they see it as a challenge or accusation.

Estate Planning Assistance from Cohen & Burnett

The trusted legal professionals at Cohen & Burnett have provided estate planning, fiduciary management, and tax services in and around Washington, D.C. for over 25 years. To see how we can help your family navigate this difficult time, please visit our homepage or contact us today.

See also:

Estate Planning Basics: Part I
Estate Planning Basics: Part II



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