Trusts are a popular, flexible, and modern way to transfer valuable assets from one party to another. Regardless of the purpose of a trust, it must be carefully and faithfully administered by a person known as a trustee. Failure to respect the transfer outlined in the arrangement could have serious legal consequences.
For example, a trustee who fails to do this could see themselves personally liable for any reduction in the trust’s value. Therefore, working with a skilled trusts attorney to understand the nuances of trust administration is crucial for anyone who was recently appointed as a trustee. If you find yourself in this situation, a Mount Laurel trust administration lawyer could explain your obligations under state law and answer any pressing questions that you might have.
A Trustee’s Obligations Explained
In general, a trustee is one of the most important people in the trust and estate administration process. They have a significant amount of power, but they also must remember to adhere to all of their many legal obligations and duties, most of which are outlined in New Jersey Revised Statute § 3B:31-54.
This framework states, for instance, that a trustee must administer the arrangement “in good faith” and according to the terms of the trust language. Additionally, they can only act in the best interests of the beneficiaries, making sure to never do anything exclusively to benefit themselves.
Acting prudently is also another essential component of effective trust administration. According to N.J. Rev. Stat. § 3B:31-57, a trustee must act reasonably to retain the value or even maximize the worth of an asset, property, or inheritance. Determining the best way to do this can be confusing, but a knowledgeable Mount Laurel attorney could offer guidance and draft a personalized trust administration plan.
The Potential Consequences of Improper Trust Administration
It is important for someone administering a trust to remember that failure to respect the arrangement could have serious consequences. For example, one of the harshest penalties involves being removed from one’s duties. N.J. Rev. Stat. § 3B:31-51, allows the trust maker or a beneficiary to ask a court about the removal of a trustee if this person fails to maintain the value of the document. In some cases, a court could even accomplish this without prior authorization.
However, removal as a trustee is not the only consequence associated with inadequate administration. According to N.J. Rev. Stat. § 3B:31-79, a trustee may be personally liable for any torts, wrongs, or critical mistakes that they committed while administering the trust. Common examples of errors that might result in liability include trust fraud or theft. The best way to avoid these potential issues is to work with a Mount Laurel lawyer who understands the intricacies of trust administration.
Speak With a Mount Laurel Trust Administration Lawyer for Further Guidance
Every trust in Mount Laurel relies on efficient and proper administration. Trustees are the key players in this role, taking control of assets and prudently distributing them to beneficiaries at the right moment.
A Mount Laurel trust administration lawyer may be able to help if you have recently learned that you are a trustee and need more information about your obligations. They could also work to evaluate your performance and inform you of whether you adhere to state regulations. To retain this valuable assistance, reach out to our office today and schedule your initial consultation.