While not all banks are requiring this signed agreement before distributing funds, it complicates an already fraught time for the beneficiaries. The possibility of legally challenging a powerful corporation is intimidating and expensive. When in this position, the beneficiaries are likely to feel exploited by a corporate giant, rather than be able to appreciate the gift bestowed by their generous predecessor. The words “trust” and “trustee” seem to take on an antiquated meaning in these new world circumstances.
Tips if you are in This Situation:
- Consult with a good estate attorney before signing or if you have any misgivings about signing. The purpose of this post is to shed light on an increasingly common scenario for beneficiaries. It is not legal advice. Get good legal advice!
- Try to discuss the matter with the Trust Department of the bank. Some people might work out an agreement that does not include the indemnification clause.
- Ask if fees will continue while the discussion of the agreement proceeds. They may not be entitled to fees.
- Stay focused on the generosity of the gift from your family member. People who have recently lost a loved one and have to deal with confusing, time-consuming legal and financial matters after the death are often emotionally vulnerable. Remember the positive intent of the gift.
- A trust that leaves money to a group of heirs is referred to as a “pot trust.” Avoid this. Instead, leave to individual heirs. Generally, it will save them from this concern.
- If you are the one leaving the trust to your children: Please discuss this and other aspects of the trust with them in advance. The more they know now, the fewer headaches they will encounter in the future. After all, that is why you want to leave them this valuable resource — to make life smoother.
