How To Avoid The Most Common Mistakes Trustees Make
Making Trust Distributions Too Soon
by: Pennsylvania Attorney David M. Frees III
Throughout history, trustees have been sued for failing to properly
administer or to invest trust assets under Pennsylvania law.
And, to make matters worse, (or much better depending on your perspective)
Pennsylvania has recently become more highly regulated from a trustee’s standpoint
thanks to the Uniform Trust Act and The Prudent Investor Rule as well as the
Pennsylvania Principal and Income Act.
Bottom line? More things for trustees to do and more opportunity for error and for
lawsuits and personal liability.
What’s a trustee to do?
Well, we have researched some of the most common trustee mistakes and will, in this and related articles review 10
of the most common mistakes and how to avoid them.
For example, many trustees distribute assets too early, only to find that they owe bills, taxes, or other charges and
that the recipients of those funds have spent them, making the trustee potentially personally liable .
So, if you’re the trustee of a trust for a minor or even another adult read on to limit the chances of personal liability.
See all ten of our articles on How To Avoid The Most Common Mistakes Trustees Make:
Avoiding Trustee Mistakes No. 1: Trustees Failing To Understand The Trust Language
Avoiding Trustee Mistakes No. 2: Trustees In Trouble Making Early Distributions
Avoiding Trustee Mistakes No. 3: Trustees Failing To Follow The Prudent Investor Rule
Avoiding Trustee Mistakes No. 4: Trustees Failing To Follow The Uniform Trust Act
Avoiding Trustee Mistakes No. 5: Trustees Failing to Follow The Principle And Income Act
Avoiding Trustee Mistakes No. 6: Trustees Failing to Communicate Properly
Avoiding Trustee Mistakes No. 7: Failing to Properly Reform, Amend, or Terminate
Avoiding Trustee Mistakes No. 8: Failing to File Tax Returns Or To Seek Professional Assistance
Avoiding Trustee Mistakes No. 9: Failing To Understand The Role Of Multiple Trustees
Avoiding Trustee Mistakes No. 10: Trustees Failing To Do The Job