Page 55 - Successor Trustee Handbook

implementing them, as any changes to these accounts could have a bearing on
the trust administration and/or estate planning done (or to be done) by the
attorney.

Life insurance may require proper periodic review, if the Trustor is disabled, or
prompt collection of proceeds due if the Trustor (insured) has deceased. Again,
the assistance of an experienced insurance agent and/or investment advisor
may be warranted.

Finally, any decisions with respect to the sales of major assets must be
carefully considered and properly documented. Sales of major assets may
become advisable or even necessary because of your duty as Trustee to avoid
loss through depreciation in value of the assets, or your duty to raise cash for
the payment of expenses, taxes, or (in some cases) for the making of
distributions to beneficiaries. The sale of assets should always be as close as
possible to their “fair market value”, which may need to first be established
through a qualified appraisal, particularly in the case of real estate or a
business. You should always consult both the Trust document and an attorney
before making any sales of major assets, to be sure that you have the proper
authority to do so or, if necessary, to obtain it. The attorney can also advise you
as to whether it may be appropriate or required for you to give notice of your
intended action to the beneficiaries or seek court approval, in advance of the
sale. (See the Chapter, “Your Liability as a Trustee”). Oftentimes, in a friendly
family situation, merely obtaining the verbal consent of the beneficiaries to such
sales may be sufficient. However, remember that you may still have some
potential liability as Trustee unless you have any such agreement placed in
writing and the beneficiaries are represented by independent counsel or you
get advance court approval. You should always, at the least, document your
reasons for any sales of major assets, just in case your action is called into
question at a later time.

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