Serving as a trustee is a meaningful responsibility, one that can carry both personal and legal challenges. While most people step into this role with good intentions, many trustees make avoidable mistakes that can disrupt the administration of the trust or even result in legal disputes. Trustees play a key part in protecting those trusts.
Our attorney Leslie K. Brier at Brier Law Firm, PLLC has seen firsthand how a few missteps in trust administration can spiral into bigger issues. From failing to communicate clearly with beneficiaries to mishandling financial records, trustees face a variety of challenges.
However, with proper guidance and the support of an experienced estate planning attorney, these challenges can be handled confidently and correctly.
One of the most frequent mistakes trustees make is not fully reading or understanding the trust document. This legal instrument outlines your responsibilities, distribution instructions, and authority. Failing to follow these terms, even by accident, can result in breaches of duty or claims from beneficiaries.
The trust might contain instructions about staggered distributions, asset sales, or special considerations for certain beneficiaries. Overlooking even one of these provisions can put you at legal risk. That’s why trustees should always start with a full review of the trust with an estate planning attorney who can explain each section clearly and in context.
Trust administration requires careful, accurate financial tracking. This goes beyond balancing a checkbook—it includes keeping detailed records of income, distributions, expenses, and investment decisions.
A clear accounting may need to be provided to beneficiaries and, in some cases, the court.
Without proper records, it's difficult to defend decisions or show that trust assets were handled appropriately.
Mistakes in recordkeeping can delay distributions, increase personal liability, and create financial consequences.
Our estate planning attorney at Brier Law Firm, PLLC can help implement tracking systems, but daily organization is ultimately the trustee’s responsibility.
Beneficiaries don’t like surprises—especially when it comes to money. A lack of communication can lead to distrust, misunderstandings, and unnecessary conflict. Some trustees assume that keeping quiet is a good way to avoid drama, but silence often leads to suspicion.
Trustees should provide regular updates, particularly after major decisions or when milestones in the trust are met. Even if there's no major development, a periodic update can go a long way in building confidence and keeping the administration process smooth.
When in doubt, being transparent with the support of an estate planning attorney can minimize risk and help avoid future legal disputes.
Every trust document outlines what a trustee can and can’t do. Even though you’re managing the trust, you’re not given unlimited authority. Overstepping your bounds—like making unauthorized investments, borrowing from the trust, or distributing funds early—can lead to serious consequences.
Some trustees also make the mistake of mixing personal and trust assets. Even temporarily holding trust funds in a personal account is inappropriate and can lead to accusations of self-dealing. It’s critical to maintain a clear separation between your own finances and the trust’s, and to get legal guidance if you’re unsure about a specific action.
One of the most serious mistakes a trustee can make is commingling personal and trust funds. Even if done unintentionally, mixing these assets can lead to legal liability and raise questions about whether the trust has been mismanaged. Trust accounts should always be kept separate and carefully tracked.
Another common error is making distributions that aren’t authorized by the trust document. Trustees must follow the terms exactly as written, and issuing funds prematurely or in incorrect amounts can create disputes with beneficiaries or lead to personal financial consequences.
In some situations, trustees are required to get consent from beneficiaries or approval from the court before making certain decisions. Failing to do so could invalidate your actions and cause delays or legal challenges.
If you’re ever unsure about what actions are allowed under the trust, it’s wise to consult an estate planning attorney before moving forward. Mistakes in this area are often difficult—if not impossible—to correct after the fact.
Trusts are subject to unique tax rules, and it’s the trustee’s responsibility to file the appropriate forms and pay any taxes owed. This can include federal income tax returns, state filings, and issuing tax documents to beneficiaries. Missing a filing deadline or misreporting income can result in penalties and disputes with the IRS or state agencies.
Trustees who are unfamiliar with fiduciary tax responsibilities should work closely with a tax professional or estate planning attorney. In many cases, getting help upfront can prevent errors that become far more expensive and time-consuming later on. It also helps demonstrate that you took reasonable steps to meet your obligations, should your actions ever be called into question.
Trustees have a duty to invest trust assets prudently, based on what’s called the “prudent investor rule.” This doesn’t mean maximizing gains at all costs, but rather making balanced, informed decisions that consider the needs of current and future beneficiaries. Putting trust funds into risky or unsuitable investments—especially without guidance—can lead to major legal issues.
Some trustees take a hands-off approach and fail to manage the trust’s investments at all, which can be just as problematic. Leaving cash idle or letting underperforming assets sit for years can reduce the trust’s value. An estate planning attorney can help you understand your responsibilities and connect you with financial professionals to help manage the portfolio wisely.
At the beginning of the trust administration process, it’s important to review the trust’s investment guidelines carefully. These instructions will help you understand your boundaries and responsibilities when managing trust assets. Starting with a clear understanding of the rules will help guide your decisions moving forward.
One of the key responsibilities of a trustee is to diversify the trust’s assets. Diversification helps reduce risk and protects the trust’s long-term value by spreading investments across a variety of holdings rather than concentrating them in a single area. It’s a core principle of prudent investing and one that courts often look at when evaluating a trustee’s performance.
It’s also essential to revisit and adjust the trust’s investment portfolio over time. Market conditions, beneficiary needs, and other factors may change, and the trust’s investments should be reviewed regularly to reflect those shifts.
It’s not uncommon for family members or other beneficiaries to disagree about how a trust should be administered. As the trustee, you must stay neutral and act in the interests of all beneficiaries, even when their needs or goals differ. Taking sides, favoring one beneficiary over another, or trying to resolve disputes on your own can lead to resentment—or lawsuits.
When tensions run high, working with an estate planning attorney can help you mediate conflicts and avoid missteps. It may also be necessary to seek court guidance or involve a neutral third party if disagreements escalate. The key is staying impartial and sticking to the terms of the trust rather than giving in to outside pressure or emotion.
Trustees are often hesitant to hire legal or financial professionals because they’re worried about using trust funds for those services. However, proper administration requires support from people who know what they’re doing. Using trust assets to hire an estate planning attorney, accountant, or financial advisor is not only acceptable—it’s often necessary.
Trying to handle everything alone can lead to overlooked duties, missed deadlines, and unnecessary stress. Working with professionals helps reduce your liability and provides confidence that you’re administering the trust properly. Most importantly, it protects the trust’s integrity and helps you fulfill your legal responsibilities.
There are several points during trust administration when involving professionals can make a significant difference. At the beginning of your role as trustee, it’s wise to consult with an estate planning attorney to review the trust’s terms and establish a clear plan for managing its responsibilities.
Professional support is also helpful when it’s time to distribute assets—particularly if those assets include property, business interests, or investments that require valuation or transfer. These transactions often involve legal and logistical challenges that shouldn’t be handled without proper guidance.
Finally, any time questions arise that relate to legal obligations, taxes, or investment decisions that fall outside your knowledge, it's recommended to seek qualified help. Relying on experienced professionals early in the process not only reduces your risk but also helps keep trust administration on track and free from preventable issues.
Trust administration requires attention, communication, and sound judgment. Trustees throughout the Tulsa area—including Cherry Street, Kendall-Whittier, McClure Park, Patrick Henry, South Peoria, Longview Lake, Turley, and throughout Rogers County and Wagoner County—can turn to our attorney Leslie K. Brier at Brier Law Firm, PLLC for clear guidance and dependable support. Contact us today to get started.
Serving as a trustee is a meaningful responsibility, one that can carry both personal and legal challenges. While most people step into this role with good intentions, many trustees make avoidable mistakes that can disrupt the administration of the trust or even result in legal disputes. In a place like Tulsa, Oklahoma, trustees play a key part in protecting those trusts.
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