Attorney as Trustee in Idaho

A trustee is a person who holds title to property that has been placed in a trust. A trustee manages the property according to the directions of the person who created the trust, the “trustor” in legal terminology. The trustee’s management of the trust is supposed to benefit a person or entity identified in the trust document, referred to as the “beneficiary.” A trustee can hire other individuals or businesses to assist them in managing the trust property.

An Idaho lawyer consultation with an Idaho lawyer would help a person understand trusts and how to use them to achieve their goals.

Trusts are evidenced by a legal document often called a “trust instrument.” There are numerous kinds of trusts in Idaho as follows:

• Charitable Trust: A trustor may set up a charitable trust to benefit a charity of their choice and realize tax advantages from making charitable gifts.
• Testamentary Trust: A testamentary trust is set up in a will. It comes into existence when the trustor passes away and this is when the trust property comes into the trust. It is most often used to manage assets for children who may not be old enough yet to assume responsibility for managing their finances and property.
• Irrevocable Trust: This is a trust that cannot be revoked or modified by the grantor once it is set up.
• Special Needs Trust: This is a trust designed for the care of a beneficiary who has disabilities. The contributions it would make to the beneficiary’s care would not make them ineligible for any government benefits which they may receive.
• Spendthrift Trust: This is a trust whose beneficiary may be too young to handle the responsibility of owning significant assets. Or the beneficiary may be an adult who requires supervision in managing their financial affairs.
• Revocable Living Trust: A revocable living trust is a legal arrangement that allows the trustor to transfer ownership of some of their assets into a trust during their lifetime. They retain the right to change or even revoke the trust at any time while they are alive.
  • A revocable living trust is useful for various purposes:
    • Probate Avoidance: The revocable trust is a useful tool for a trustor who wants their assets to bypass probate. Assets held in a revocable living trust transfer directly to beneficiaries outside of probate after the trustor.
    • Owning Assets in Multiple States: If a trustor owns real estate in more than one state, a revocable living trust helps them avoid “ancillary probate” in each state, which saves time and spares their heirs from dealing with the bureaucracy of the probate procedure.
    • Protecting Privacy: Probate is a public court proceeding, so the distribution of assets is a matter of public record. The distribution of assets in a revocable living trust is done privately and is not a matter of public record.
    • Complex Estates: For individuals with complex estates, business interests, or specific instructions for asset distribution, a revocable living trust offers flexibility and control, allowing you to set conditions for distributions and manage assets efficiently.
    • Continuity of Asset Management: Trusts can provide uninterrupted management of investments and other assets if you become unable to manage them yourself, unlike a will, which only takes effect after death.

A trustee would be appointed for each of the various kinds of trust, although a trustor themselves can serve as a trustee of a trust they establish, unless the trust is an irrevocable living trust.

In every case, however, a trustee owes a fiduciary duty of loyalty to the trust and its beneficiary or beneficiaries. This obligates the trustee to serve only the best interests of the beneficiaries and not their own or the interest of any other individual or entity. If a trustee were to commit a breach of their fiduciary duty, this would be grounds for their removal.

Should My Attorney Act as a Trustee in Idaho?

Idaho law allows having an attorney as trustee. It is important to choose the right individual to serve as the trustee of a trust, and an attorney may be an excellent choice. There are several factors that a person should consider when deciding to establish a trust.

If a trustor establishes an irrevocable trust, they need an individual or institution separate from themselves as the trustee. Choosing the right trustee is critical to making sure that the trustor’s wishes are carried out. Depending on the nature of the trust, serving as a trustee can be challenging, as it may include such responsibilities as making investment decisions, paying bills, maintaining accounting, and preparing tax returns.

Idaho law only requires that a trustee be a legally competent individual who is over the age of 18. Generally, a trustor wants to choose someone who has additional qualifications.

Of course, the main factor to consider in choosing a trustee is to select someone who is trustworthy. The trustee has a duty to manage the trust in the beneficiary’s best interest. They do not necessarily have to have legal or financial expertise, but if they are qualified to handle the responsibilities of a trustee, that would be advantageous. Attorneys also have to respect attorney ethics, yet another advantage to selecting an attorney.

A trustee can hire others with the qualifications and skills they need, e.g., investment advisors and attorneys. However, the trustee needs to have good judgment and integrity. In the case of a special needs trust, a trustor might want a trustee who knows about government benefit programs, such as Supplemental Security Income (SSI) and Medicaid.

Another factor is the trustee’s age. A trustor wants to estimate what the life of a trust might be and select a trustee who is going to be available to manage the trust for the duration of its lifetime. This would suggest that it is best to choose a trustee who is not advanced in age. A trustor should assess whether their choice of trustee would be available to serve for the life of the trust.

In addition, they want a trustee who has the time to handle their trust responsibilities in addition to any other duties and obligations they may have. Having a financial as well as a legal background could be helpful. However, as noted above, a trustee is legally allowed to employ others to help them if that becomes necessary. So, they would be able to hire other attorneys and financial advisors as needed.

What Potential Conflicts Arise When an Attorney Acts as a Trustee in Idaho?

If an attorney continues to practice law while they serve as a trustee, it is possible that they could experience a conflict between the trust they serve and another client. However, it seems unlikely that a conflict of interest could arise, and the attorney should be able to take steps to avoid one. For example, if working for a client would create a conflict for them as a trustee, they would be able to refuse employment by the client.

In Idaho, if I Appoint My Attorney as My Trustee, Do They Have to Accept?

A person cannot be forced to serve as the trustee of a trust. Of course, a trustor would want to ask the person they want to serve as a trustee for their trust if they would accept the appointment. If the preferred individual does not want the appointment, the trustor should keep looking. Their attorney may be able to suggest some well-qualified alternatives.

Should I Hire Another Lawyer if I Wish To Appoint an Attorney as My Trustee in Idaho?

If you want to appoint an attorney with whom you have an existing relationship to serve as a trustee for your trust, you want to talk to an Idaho estate lawyer. Your lawyer can guide you in assessing your lawyer’s qualifications to serve as a trustee and whether they are the optimal choice.

If you determine that your existing lawyer is qualified, your lawyer would be able to determine if they are willing to serve. Your Idaho estate lawyer might also be able to suggest some good alternatives.

Your Idaho estate lawyer can also assess what type of trust you need for your purposes and draft the trust document to set it up. They can take you through the entire process of setting up the best kind of trust for you and ensuring that the trustee you choose is the one best qualified for the role.