When the Draft Becomes Reality: A Trustee’s View from the Other Side with Co-Host Jennifer Galloway | Season 2 Episode 9

Jen, one of the things that you and I touched on in a conversation we had, I don't know, And I think specifically we were talking about how the trustee functions.

And so when we're drafting, sometimes we have co-trustees, sometimes we have a corporate trustee, sometimes it's an individual family member.

And I guess just very broadly speaking, what are some things that you're seeing now in your role that you view differently or that maybe you've kind of evolved your thinking on?

Fred, a lot of times what we see is an individual trustee serving with us, or that's a question that we're asked a lot of times from either drafting attorneys or perhaps a referral source that's working with a individual who has a current trustee and they're looking to change it or something to that effect.

But they'll ask us if we're willing to serve as co-trustee.

And my answer to that is yes.

However, the way you're phrasing the question is, you know, what do I wish I would have known as the drafting attorney or what do I wish they... could know while drafting is it's not very clear to us when that appointment is set forth in the document, who's supposed to do what and what happens in practice is disagreements and or just a not even clear understanding of whether something has to be, you know, unanimous or who if there's three coaches, there's, you know, two individuals and one corporate trustee or some configuration of multiples, it's not clear whether it's unanimous or two thirds or, you know, majority roles.

So setting forth in the document, any sort of tiebreaker provisions and or what areas of trust administration the individual should cover versus what area the corporate trustee should cover.

You know, sometimes I've seen reference to like the family trustee and the family trustee is supposed to handle, you know, whether a medical procedure or medical treatment or medical related expense is appropriate or not, or a family trustee might handle education related information.

So that would be helpful, I'm saying on the admin side to know and advance the From the settlor, the testator, whoever's the person, you know, setting this money aside in the future, what's important to them as to which one of us, you know, who does what? Or if it's not clear, maybe a tiebreaker language.

If you don't have from your client that level of nuance to who's doing what.

tiebreaker language would be helpful or trust protector would be helpful any of that that's in the document is helpful for us because if there's deadlock otherwise there is a statute that allows the court the orphans court to decide on issues of deadlock but that involves spending the trust money to go to court to get an answer when if the document itself set that forth we wouldn't have to do that so that's one area

Just so I understand this, is this a situation where someone's coming to you, they're asking if you would serve as trustee or co-trustee? And I imagine your answer often is, sure, but we need to see the documents.

Or are you asked sort of after the fact, the document's already drafted, there's no going back at this point, and now you're kind of stuck dealing with interpretation or I guess, hopefully not, but potentially sort of deciding on the fly what who's doing what?

Yeah, we do see the document before accepting any role.

However, whether we will say no because of the absence of that particular issue is not as likely.

So at the beginning, ideally, if the documents are just being drafted and they're sent to me in draft version, we can still work that in or have the conversation.

But in a lot of circumstances, it's a matter of It's already been drafted.

It's already under administration and we're stepping in as a successor or, you know, we've been serving and this is it just wasn't clear.

And here's the first time it's come up.

Nobody's raised it before.

So we just kind of work through it.

I don't mean to say that it's an issue all the time or even frequently.

It's just one of those things that I've noticed that would be helpful to have clarity on.

Yeah, I mean, I can imagine a situation where there's a document that says these people are going to serve as trustees, but there's no information about who's deciding what or to your point, if there's no tiebreaker or whether it's unanimous or majority, I imagine that leaves a lot of room for interpretation and potential for dispute, I guess.