A trustee is an individual who is given the authority by someone else, called the trustor, to hold and manage assets or property for the benefit of a third party, called the beneficiary. A trustee holds assets in trust until the required conditions have been met.
When this occurs, the property or assets are transferred to the beneficiary. Trustees may be people or institutions, such as banks.
One common example of when a trustee is used is when a trust is created. When someone creates a trust, they may give the trustee the authority to hold and manage property or assets for the benefit of another individual.
Should My Attorney Act as a Trustee in Nevada?
In Nevada, there are important considerations to make before asking your attorney to be your trustee. Although it may seem like a convenient arrangement, it may create problematic issues for your lawyer.
There are certain ethical risks that a lawyer who is appointed as a trustee may run into. In addition, the compensation a lawyer can receive for their management of the trust may be limited if the attorney who drafted the trust also acts as the trustee of that trust.
A lawyer may determine that it is not profitable for them to serve as a trustee in addition to their role as a lawyer because the limits on their compensation may mean more work for less money. If someone is considering appointing their lawyer as the trustee of their trust, it is important to weigh the risks before making that decision.
It may be more helpful to find an experienced and qualified trustee who is not also acting as an individual’s attorney. Nevada lawyers can help their clients understand how trusts, compensation, and having lawyers as trustees works in the state.
What Potential Conflicts Arise When an Attorney Acts as a Trustee in Nevada?
There are several different potential conflicts that may arise when a lawyer acts as a trustee in Nevada, including:
- The Duty of Loyalty: A trustee has a duty of loyalty to act in the best interests of the beneficiaries and not their own interests.
- This can be challenging if conflicts arise between the role of attorney and trustee or there are disputes among the beneficiaries.
- The Duty of Prudence: Trustees have to exercise due care when making investment decisions. They also have to diversify investments to minimize risks.
- When a trustee is also a lawyer who is acting as a broker for the trust portfolio, they may be at risk of violating state securities laws.
- The Subsidiary Duties: There are also several other responsibilities of a trustee, such as avoiding self-dealing transactions, keeping accurate records, and informing beneficiaries of their rights.
If someone is a lawyer and also a trustee, they should be aware of these potential conflicts and take steps to avoid them. By having an understanding of the possible conflicts that can come up, an individual can protect themselves and their beneficiaries against breaches of fiduciary duties.
In Nevada, if I Appoint My Attorney as My Trustee, Do They Have To Accept?
When an individual is creating a trust, one of the most important decisions they make is who they appoint as the trustee. This trustee will have a major responsibility in overseeing the management and distribution of assets under the trust terms.
If an individual is considering appointing their lawyer as their trustee, their lawyer may not accept the position. A trustee may be appointed by the trust creator or by the court. However, the trustee has to voluntarily accept the position.
Once a trustee has been appointed, they cannot resign without getting consent from all of the beneficiaries or obtaining permission from the court. There are some very important reasons why a lawyer may decline being appointed as a trustee.
One of the main reasons lawyers usually do not accept trustee appointments is that their compensation for their services may be limited. Usually, a trustee will be paid for their services.
However, this fee is usually much lower than what a lawyer would normally charge for providing their client legal counsel. Additionally, trustees may be responsible for paying expenses that are related to the administration of the trust, which can add up over time.
Another reason why a lawyer may decline an appointment as a trustee is due to their obligations to their client. Attorney ethics require lawyers to provide their clients with competent advice and representation.
Serving as a trustee typically requires a lot of time and attention. It can be difficult for a lawyer to fulfill their obligations to both the trust as well as their clients.
A lawyer will also usually decline an appointment as a trustee due to the potential liability that they may face. A trustee can be held liable for damages or losses that occur because of their conduct or inaction as the trustee. They can face significant liability and may not perceive accepting the position to be worth the risk.
Although there are numerous reasons for lawyers to refuse appointments as a trustee, there are also certain situations where they may be willing to serve as a trustee. If someone has a good relationship with their lawyer and thinks the lawyer may be a good fit as a trustee, the individual can always ask their attorney if they would be interested in serving.
If the trust beneficiaries agree and the court allows it, the lawyer will be able to serve as the trustee. It is important to keep in mind, however, that this may not be the best option, as there are other qualified people who could serve as the trustee.
If someone is considering appointing their attorney as trustee of their trust, they should consider all of the pros and cons of that decision. A trustee plays a very important role in the administration of the trust, so it is essential to choose an individual capable and willing to take on the responsibility.
A Nevada lawyer consultation can help an individual create their trust and determine if their lawyer is a good fit for the position of trustee.
Should I Hire Another Lawyer if I Wish To Appoint an Attorney as My Trustee in Nevada?
There are many issues to consider when you decide to appoint a lawyer as a trustee. It is essential to discuss the issue with a Nevada estate lawyer to protect the interests of everyone involved.
A lawyer who is only the trustee may be better able to negotiate and enforce trust terms than your family attorney or another lawyer who you have on retainer for other legal issues. A conflict of interest is more likely to arise when the same individual holds multiple roles.
For example, a trustee may be required to make decisions that could benefit themselves financially, which can create a conflict of interest. An estate attorney can help draft a clear and valid trust document that avoids future disputes. They can also help mediate any disputes between a trustee and the beneficiaries.
Taking these precautions will help ensure your trust runs efficiently and smoothly. You can use LegalMatch to find an estate lawyer who can help you navigate the trust process. It will only take you around 15 minutes to complete the submission process for your question or concern about Nevada lawyers as trustees.
