I would like to give a shout out to the many individual fiduciaries doing their best to fulfill the terms of the trust or power of attorney. While the cases of exploitation have increased over the years, there are also numerous cases reported to Adult Protective Services (APS) that result in a finding that no exploitation is occurring. This happens, in part, because in many states professionals have a legal obligation to report any unusual activity in accounts they oversee.
In a recent incident, a bank filed a report with APS and froze the assets of a client because there were larger than usual expenditures from her checking account. As it turned out, the client was remodeling her home to be sold so she could move to a retirement center.
Although the bank was only following the law and APS quickly investigated and found no exploitation, the uncompensated individual fiduciary was obviously frustrated. Through it all, the individual trustee was comforted by the fact that she had taken steps from the beginning to protect herself and her friend. The individual trustee:
1. Kept all receipts filed by month to account for funds received and spent.
2. Assembled a team of attorneys and a trust company to assist her with the administration.
3. Communicated regularly with the team to keep all updated.
4. Sought and implemented advice from her team.
Because the individual trustee was not a silo, this incident remained a small, albeit frustrating, bump in the road as opposed to a large and possibly legal mountain.
The Individual Trustee’s Challenges
Serving as a fiduciary can be a complex and time-consuming task, especially when the fiduciary is also managing his/her own employment, family and financial affairs.
Even those with the best of intentions can find themselves facing problems they never anticipated. A standard power in nearly every trust allows the fiduciary to employ agents, attorneys, accountants and other professionals to assist in the administration of the trust.
If you are an individual fiduciary, please don’t be a silo. Form a team. You do not have to be alone in this, and when unanticipated bumps arise, your team will help you keep them manageable.