As we all know, Bob Whitman's legal scholarship has long been devoted to bringing a human touch to the practice of trusts and estates law. In particular, Bob repeatedly stresses the role of the estate lawyer as personal counselor and not simply the rote delivery vehicle for dry legal rules. Bob presents as unconscionable the behavior of those in the legal and trust administration professions who fail to consider fully a wide range of client interests.
Two recent pieces have extended this perspective in novel ways. Can Estate Planners and Trust Administrators Offer Help to Trust Beneficiaries Who Want to Learn to Make Positive Life Planning Decisions?, 1 Estate Planning & Community Property Law Journal 387-97 (2009) highlights recent research on human happiness to make the case that "trustees should structure governing instruments in a way that will help trust administrators assist trust beneficiaries who wish to understand how to plan for long term security and positive life experiences." The principal suggestion of the piece is that "corporate fiduciaries create a new position - the life planning officer - to work with trust beneficiaries who want to set themselves up for a happier life." I was left uncertain whether Bob is arguing that the new position should be required as part of the administrator's fiduciary obligations, whether this position would prove a competitive advantage that would lure more trust dollars, or whether banks should simply establish such a position out of the goodness of their hearts (assuming, of course, that banks have hearts). Certainly, however, and I take this to be Bob's main point, recent evidence suggests many young people are unprepared for the responsibility of managing large sums of money. Lawyers and trust administrators ought to think through how this affects their jobs.
Dealing Fairly with Estate and Trust Beneficiary Complaints, 22 Quinnipiac Probate Law Journal 46-54 (2008) offers the sensible suggestion that those drafting trust instruments include an obligation on administrators to provide beneficiaries with a fair and prompt mechanism for resolution of disputes. Bob even writes the provision
"If a dispute arises between the fiduciary and/or one or more members of the beneficiary group, the fiduciary shall work with the complainant to adopt a proper resolution procedure in order to promptly and economically resolve the dispute."
I have also learned of the recent publication of the Second Edition of Bob's ALI-ABA sponsored "Fiduciary Accounting and Trust Administration Guide" that he co-authored with David M. English, W.F. Fratcher Missouri Professor of Law at the University of Missouri-Columbia School of Law. Details concerning this work appear below. Congratulations Bob.
Fiduciary Accounting and Trust Administration Guide
shows you how to:
- Review fiduciary accountings
- Use performance accounting
- Prepare executor’s and trustee’s accounts
- Handle valuations, schedules, and distributions
- Prepare receipts and effective releases
This essential guidebook for practitioners who settle estates and administer or advise on the administration of trusts clarifies the terms, concepts, and procedures involved in fiduciary accounting and trust administration to help you determine the necessary valuations and allocations, prepare the proper schedules, make the correct distributions, and, when necessary, file a court accounting.
ALI-ABA’s Fiduciary Accounting and Trust Administration Guide teaches you how to:
- Perform a reasonable review
- Draft an engagement letter
- Determine the client’s role
- Assemble the material needed for a reasonable review
- Interpret the governing instrument
- Uncover “ghost” accountings
- Review specific accountings
- Set the goals for and conduct a performance accounting
- And more!
This new edition covers state modifications to the Uniform Trust Code, documentation of beneficiary receipts and releases, and recent cases involving trust administration. The text also analyzes the major issues and problems in trust administration. From governing law to liabilities of the trustee, the text reviews the modern standards controlling how trusts should be run and applies them in a straightforward fashion, including: How can a trust be modified? How do spendthrift provisions affect creditors’ rights? What duties do trustees owe beneficiaries?
This volume explains the principles and the model account formats that have resulted from the National Fiduciary Accounting Standards Project with the goal of making them more accessible to practitioners and more readily accepted by the courts.
Fiduciary Accounting and Trust Administration Guide is supplemented by useful appendixes, including model executor’s and trustee’s accounts, a sample letter of engagement for review of fiduciary accounts, a sample release, and a list of available fiduciary accounting and performance presentation software.
Part I: Fiduciary Accounting
- Record Keeping for Fiduciary Accounting
- Inventory and Receipts of Principal
- Carrying Values and Market Values
- Principal and Income—Allocation and Presentation
- Information Schedules
- Basic Objectives and General Standards of Fiduciary Accounting
- Guidelines for the Reasonable Review of Fiduciary Accountings
- Performance Accounting
- Sorting Out Receipts and Releases
Part II: Trust Administration
- Introduction and Overview
- Definitions and Miscellaneous Provisions
- Representation and Nonjudicial Settlements
- Creation and Validity of Trusts
- Modification and Termination of Trusts
- Provisions and Rights of Beneficiary’s Creditors
- Office of Trustee
- The Uniform Prudent Investor Act
- Relations with Third Persons
- Liability of Trustees and Rights of Persons Dealing with Trustees
Appendix A - Model Executor’s Account
Appendix B - Model Trustee’s Account
Appendix C - Uniform Principal and Income Act
Appendix D - Basic Objectives and General Standards of Fiduciary Accounting and Fiduciary Accounting Principles
Appendix E - Jurisdictions That Will Accept the Uniform Accounting Principles as One Method of Accounting Within the Jurisdiction
Appendix F - Sample Letter of Engagement
Appendix G - An Overview of the Association for Investment Management and Research (AIMR) Performance Presentation Standards
Appendix H Available Fiduciary Accounting Packages