Avoid Conflict!

            Most frequently, clients wish that their children jointly serve as their successor trustees for their Living Trusts after both parents pass.  This approach seems to address a sense of the “natural order of things” and better ensures that no child feels left out.  In many instances, selecting all children to act jointly serves well the estate and operates without issue.

            As parents, however, you know the personalities and proclivities of each child and, as importantly, the dynamics between the children.  Use your Estate Plan to play to these strengths and establish processes to avoid potential conflict for times when your children will be called upon to act together.

            Case in point.  Clients, a married couple with two grown children, without hesitation or resolution, advised that both their children would serve well as successor trustee.  These parents knew that each child would do the right thing and do their best.  They appreciated that each child would never take action contrary to the interests of their sibling.

            All was good, except the parents also understood that the style and approach of each child may result in tension when the children acted jointly.  One child was goal oriented.  That child would develop a checklist of successor trustee action items and then systematically tackle each item:  transfer bank accounts to estate name – check; return final Social Security payment – check; meet with financial adviser regarding trust investments – check; etc.

            The other sibling, however, approached each task analytically and thoughtfully.  Rather than rush ahead to open trust accounts, perhaps the children should first consult with a CPA to make certain that all tax considerations are identified.  For financial investments, past performance should be considered, and potential short term and long term cash needs of the trust come into play.

            Neither approach was wrong.  One sibling thinks the other sibling suffers from analysis paralysis.  Conversely, the other sibling believes that acting in a rash manner will lead to poor consequences.  Both siblings would be frustrated working jointly with the other.

            Solutions exist.  We established a structure whereby s successor trustee can propose some action.  The other sibling then has 21 days to agree, object or otherwise address the issue.  If no response or resolution within 21 days, the proposed action can then be taken.  Matters move forward for the checklist sibling.  Opportunity for analysis remains for the thoughtful sibling. 

Work with creative Estate Planning counsel who listens to your concerns and explores issues and decisions you make.  Your attorney should identify potential challenges and propose solutions, including eliminating conflict before it can even arise.  To assist, reach out for Estate Planning Attorney Michael Geiger at (901) 219-5549 or at michael@geigerattorney.com.