New York Estate Planning & Elder Law Blog
In the recent case of MBM Family Trust, one party initiated legal action against another concerning a foreign judgment. The party who initiated the lawsuit later added a trustee of a trust that the plaintiff claimed helped the defendant conceal assets. The trustee pursued a special appearance and argued over personal jurisdiction.
Ultimately, the trial court did not accept this object. Instead, the trustee appealed. On appeal, the court found that claims intended to recover assets from a trust can only be brought against the trustee who is the trust’s legal representative.
The appellate court commented that the trial court had evidence that the family trust was a lender and that the trustee stepped in to function as the lender of a home equity line. The home equity line of credit provided the line of credit was secured by a deed of trust to the trustee and apart from the home equity line.
Ultimately, the appellate court upheld the trial court’s ruling that personal jurisdiction was missing in the case.
While this case presents some unique issues, it emphasizes the importance of avoiding disagreements about the role of trustees in estate plans. This article recommends some important steps that you can follow while estate planning to minimize potential disagreements about trustees.
# 1 – Be Transparent
The most important step a person can take while estate planning is to remain transparent about everything from beneficiaries to trustees. This way everyone has an understanding of the various parties in an estate and their roles later.
# 2 – Obtain Approval or Consent
If parties involved in an estate plan agree to actions ahead of time, they are much less likely to end up in a disagreement. By providing each party that will be impacted by your estate plan with sufficient details, you can greatly reduce the chance of disagreement amount your loved ones. Remember, adequate communication is almost always the key.
# 3 – Keep Sufficient Record
Simply, the more detailed records you keep, the less likely other parties will be able to argue that you were subject to duress, undue influence, or any other type of fraud. By keeping detailed paperwork, you can also make sure that your wishes are fully reflected to anyone who is impacted by your estate plan.
# 4 – Share Everything
Your estate plan should clearly list all of your debts as well as your assets. This way there is no uncertainty about anything that you leave behind. Remember, if you fail to do this type of accounting then it will be done by your loved ones. Estate planning, in part, helps to avoid leaving your loved ones in the undesirable situation of straightening your affairs after you pass away.