• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • WHO WE ARE
    • About Our Firm
    • Attorney and Staff Profiles
    • News and Events
  • Areas We Serve
    • Essex County, MA
      • Andover
      • North Andover
    • Hillsborough County, NH
      • Manchester
      • Nashua
    • Middlesex County, MA
      • Concord
      • Lexington
      • Wakefield
      • Winchester
      • Woburn
    • Rockingham County, NH
      • Exeter
      • Londonderry
      • Salem
  • Services
    • Asset & Business Planning
    • Elder Law & Medicaid Services
    • Estate And Gift Tax Figures
    • Family-Owned Businesses & Farms
    • Legacy Planning Services
    • LGBTQ Estate Planning
    • Loss Of A Loved One
    • Pet Planning
    • Power Of Attorney
    • Probate and Trust Administration
    • SECURE Act
    • Special Needs Planning
    • Young Families
  • Elder Law
    • Coping with Alzheimer’s
    • Hospice Care
    • Medicaid Planning
    • Nursing Home Planning
  • Resources
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder law reports
      • Elder Law Resources
        • Elder Law Resources – Londonderry, New Hampshire
        • Elder Law Resources North Andover, Massachusetts
        • Nashua, New Hampshire Elder Law Resources
        • Woburn, MA Elder Law Resources
    • Estate Planning
      • Estate Planning Articles
      • Estate and Gift Tax Figures
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Free Seminars
    • Frequently Asked Questions
      • Asset Protection Planning
      • Business Planning
      • Charitable Gifting
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Incapacity Planning
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Pre Consultation Form
    • Presentations
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Nashua, New Hampshire Probate Resources
        • Probate Resources – Londonderry, New Hampshire
        • Probate Resources – North Andover, MA
        • Probate Resources – Wakefield, Massachusetts
        • Woburn, MA Probate Resources
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Published Books
  • Live Seminars
    • Online Seminars
    • In-Person Seminars
  • Videos
  • Contact Us
  • Blog
  • Reviews
    • Our Reviews
    • Review Us

DeBruyckere Law Offices, PC

Serving Southern New Hampshire & Essex Country, Massachussetts

Call us today(603) 894-4141

(978) 969-0331

Online Seminars
Attend Free Seminar
Home » Uncategorized » Can a Trustee Be Held Personally Liable for Mistakes?

Can a Trustee Be Held Personally Liable for Mistakes?

February 12, 2019Uncategorized

Nashua trust administration attorneys

Though once used almost exclusively by the very wealthy as a way to protect and pass down that wealth, trusts have evolved to the point where they are now found in the average estate plan. One thing that all trusts have in common is the need to appoint a Trustee to oversee the administration of the trust. If you were recently notified that you were chosen to be the Trustee of a trust for the first time, you may understandably be a bit nervous. You may also be worried about the ramifications of making a mistake. Can a Trustee be held personally liable for mistakes? The Nashua trust administration attorneys at DeBruyckere Law Offices answer that question.

Trustee Duties and Responsibilities

If you have never before served as the Trustee of a trust, it helps to first gain a general understanding of your duties and responsibilities. Overall, a Trustee’s job is to protect and manage the assets held by the trust and administer the trust using the terms created by the Settlor in the trust agreement. Some of the specific duties and responsibilities a Trustee has include:

  • Abiding by the trust terms unless they are impossible, illegal, or unconscionable
  • Investing trust funds using the “Prudent Investor Standard”
  • Monitoring trust investments
  • Communicating with trust beneficiaries
  • Resolving conflicts among beneficiaries
  • Making discretionary decisions
  • Distributing trust funds to beneficiaries
  • Approving or denying distributions if given discretionary authority
  • Keeping detailed trust records
  • Preparing and paying trust taxes

Trustee Liability for Mistakes and Errors

As a first-time Trustee, one of your biggest concerns is probably making a mistake. You are hardly alone. All too often the Settlor (creator) of a trust appoints the Trustee without actually giving the matter sufficient thought. As a result, a spouse, best friend, or family member ends of in the position of Trustee despite having zero experience that would qualify him/her for the position. Successfully administering a trust is best accomplished by someone with a financial and/or legal background. Like other Trustee’s in the same position, you undoubtedly have the best intentions; however, your lack of experience could increase the likelihood of making mistakes during the administration of the trust – and you could be held personally liable for those mistakes.

Mistakes made during the administration of a trust could result in the Trustee’s liability to a third party and/or to the beneficiaries of the trust.  As the Trustee, you will have to interact with third parties on a regular basis, particularly with regard to investments made by the trust.  Consequently, you could end up liable for breaching a contract to a third party or for debts incurred in the name of the trust and owed to a third party.  You might also find yourself liable to the beneficiaries of the trust for a wide range of errors or mistakes, including:

  • Failing to distribute trust assets according to the terms of the trust.
  • Failing to pay debts, including taxes, owed by the trust that then incurs additional fines that decrease the value of the trust assets
  • Making risky investments that result in a depletion of trust assets
  • Failing to inform the beneficiaries of vital trust business that results in damage to the trust.
  • Creating a conflict of interest that results in losses to the trust
  • Self-dealing

There are several things a Trustee can do to try and limit the possibility of personal liability for mistakes. For example, when any Trustee invests trust assets, the “prudent investor standard” must be used. The prudent investor standard requires the Trustee to only invest in risk-averse options and to consider retention of the principal to be the most important consideration when making investments. The most important thing you can do, however, to try and avoid personal liability is to utilize the advice and assistance of professionals during your time as Trustee.  Consult with a financial advisor before making any investments using trust assets. In addition, retaining the services of a trust administration attorney will dramatically decrease the likelihood of any personal liability on your part because it will decrease the likelihood of making an error.

Contact Nashua Trust Administration Attorneys

For more information, please join us for an upcoming FREE seminar. If you have additional questions about your liability as the Trustee of a trust, contact the Nashua trust administration lawyers at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.

  • Author
  • Recent Posts
Daniel DeBruyckere
Daniel DeBruyckere
Attorney Daniel A. DeBruyckere has been practicing law in New Hampshire and Massachusetts since 1998, and has helped hundreds of clients with their estate planning and elder care issues. He is very well respected in the area of estate planning, probate, trust administration, elder law issues, and business planning.
Daniel DeBruyckere
Latest posts by Daniel DeBruyckere (see all)
  • How Can I Include Philanthropy in My Estate Plan? - April 13, 2021
  • Top 5 VA Benefits - April 9, 2021
  • 5 Things You Should Know about Medicaid - April 1, 2021

Other Articles You May Find Useful

Top 5 VA Benefits
Will Your Estate Plan Still Work If You Move?
North Andover legacy planning attorney
Leaving Behind Your Legacy
living trust
What Does a Living Trust Do for You?
trust attorney
Can a Trust Attorney Be My Trustee?
DeBruyckere Law Offices, PC | Estate Planning & Medicaid Attorneys
Seniors, Elderly Face Financial Hardships

DeBruyckere Law Offices, PC

Download our free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
  • This field is for validation purposes and should be left unchanged.

Subscribe to Our Newsletter

Please fill out the form below:
  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

Blog Subscribe

  • This field is for validation purposes and should be left unchanged.

Testimonials

I felt complete trust and confidence in Dan DeBruyckere and his staff. They have a caring, low-key approach and there is no pressure to add products to the estate plan; rather he makes me aware of changes in the law, etc. I always learn something new to assist me in our planning!

LN

Your seminar was the only seminar we attended without financial advisors wanting to invest our money instead of protecting it! The information this firm provided was easy to understand even though it is a difficult topic. Thank you for all of your help!

HR

We both felt so comfortable in they way our Estate Planning was handled. We felt like someone was watching out for our best interest. Everyone we worked with at the firm was thorough, and explained everything in a way where we could walk away feeling like everything was complete.

RS

A truly great experience all the way through. Felt like we were a part of the family! Thank you.

LW

We could not have picked a more qualified law firm. Everyone that we came in contact with made us feel at ease.

Happy Client

We were very impressed with the statements put forth by Dan at the Seminar. We were impressed even more by their down to earth approach and the efficiency they accomplished it all.

Charles

Londonderry Office

Londonderry Office
One Verani Way
Londonderry, NH 03053
Phone: (603) 894-4141

See Larger Map Get Directions

Nashua Office

Nashua Office
76 Northeastern Boulevard, Unit 31B
Nashua, NH 03062
Phone: (603) 894-4141

See Larger Map Get Directions

North Andover Office

North Andover Office
231 Sutton St, Suite 1B
North Andover, MA 01845
Phone: (978) 686-4645

See Larger Map Get Directions

Woburn Office

Woburn Office
444 Washington Street, Suite 503
Woburn, MA 01801
Phone: (978) 969-0331

See Larger Map Get Directions

By Appointment Only

BEVERLY OFFICE

Beverly Office
900 Cummings Center Suite 204-U
Beverly, MA 01915
Phone: (978) 969-0331

See Larger Map Get Directions

Office Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 5:00 PM

Map

dadlawoffices_sidbr_map
  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
footer-logo

© 2021 DeBruyckere Law Offices
All Right Reseved.

Attorney Advertisement

© 2021 American Academy of Estate Planning Attorneys, Inc.