Legal Advice for Successor Trustees
Most trustees can use at least occasional advice from a lawyer.
If you serve as a successor trustee—winding up a living trust after the person who created it has died—you may well want to talk to a lawyer to make sure you understand the scope of your duties. Although the purpose of a living trust is to avoid probate’s hassle and expense (including lawyers’ fees), a consultation with a lawyer will cost much less than hiring one to conduct a probate court proceeding. The cost will probably be money well spent, and it can be paid for from trust assets, not from your own pocket.
When to Call a Lawyer
You’ll probably want to consult a lawyer in two circumstances.
First, as you begin your duties as trustee, it’s very helpful to get an overview of the process. For example, when you’re ready to end the trust, you’ll need to give the people who inherit trust assets (the trust beneficiaries) a written accounting of where all those assets went. But if you don’t know that starting out, you might not keep the careful records you’ll need to assemble that final accounting. You might make other mistakes, too.
Second, you’ll probably have at least a question or two as you go about your duties as trustee. Especially if beneficiaries are squabbling, or you’re not sure where your responsibilities end and those of the executor named in the will begin, you’ll probably want some advice from someone who knows the law.
Paying the Lawyer
Good legal advice doesn’t come cheap. These days, $150 an hour for a lawyer’s time is definitely on the inexpensive end; you should plan on paying $250/hour or more if you live in a suburban or urban area. The good news is that you’ll have to pay for only five to 20 hours of a lawyer’s time, depending on how complicated administering the trust turns out to be. That’s a total of $1,250 to $5,000.
Again, remember that you don’t have to pay for legal advice yourself. You’re entitled to use trust funds to pay for expert advice that you need in your capacity as successor trustee. The trust beneficiaries have a legal right to complain only if the money you spend is unreasonable.
Finding a Knowledgeable Lawyer
You need a lawyer who has experience handling trust administration—don’t go to a generalist. Start, if you can, with referrals from friends or relatives who have served as trustees. Remember that a divorce lawyer or personal injury lawyer, no matter how skilled in his or her own area, might not know anything about wills and trusts.
You can also check the Nolo lawyer directory for names of local estates and trusts lawyers. Read their profiles and call two or three who sound like they might be a good fit for you. Here are a few things to ask about on the phone or at your first meeting:
References. Some lawyers will provide the names of former clients. Call these people and ask how it was to work with the lawyer—were calls returned and questions answered promptly? Were the clients satisfied?
Fees. Most trust lawyers charge by the hour, but some might offer a flat fee for helping you wrap up the trust. A flat fee has the advantage of removing any worry you have about running up fees every time you have a question for the lawyer.
Scope of the work. What, exactly, will the lawyer do? If you want help with preparing an accounting for beneficiaries or tax returns, ask.
Time. Get an estimate of how long the lawyer thinks it will take to wrap up the trust and get all the property distributed to beneficiaries.
Putting Your Agreement in Writing
It’s a very good idea to get a fee agreement in writing. You’ll probably never need to refer to the document, but the process of setting down your expectations—and the lawyer’s—can be very helpful as you begin your relationship. Include the hourly or flat fee, the specific services the lawyer will provide, how and how often you’ll be billed, whether you’ll have to pay costs (postage, appraisals, and so on), and an estimate of the total fee.