Trusts are gaining popularity in estate planning, but as the name suggests, it requires a great degree of confidence in others, lawyers warn.
The race for estate planning is on, with aging Baby Boomers forecast to pass down $124 trillion over the next 12 years. Though 56% of U.S. adults have no estate planning documents whatsoever, the ones who are planning are increasingly choosing more comprehensive planning vehicles, according to Trust & Will's 2026 estate planning report. Trust ownership rose to 14% from 11% in 2025, it found after surveying 5,000 U.S. adults between Jan. 28 through Feb. 5.
While this may suggest that Americans who are planning are doing so more thoughtfully, naming the wrong trustee can destroy your plans, legacy and your family,
lawyers said. The wrong trustee can reverse all your work to control how, when and to whom your assets go and to avoid slow, public court proceedings.
"When a parent dies and there's a trust, the most common call we get isn't 'the trust is invalid,' and it isn't 'my sister stole the money,'" said Edmund Yan, estate planning attorney at the Tree of Life Law Firm. "It's much smaller than that. It's 'my sister is the trustee, it's been eight months, and she won't tell me anything.' "
What's a wrong trustee?
A wrong trustee is someone who's a poor choice to manage the trust. Some may lack necessary financial skills and knowledge, have conflicts of interest or poor relationships with beneficiaries, lack time and organization to perform trustee duties or are partial.
They can also be trustees who breach trust by ignoring what's stated in the trust document, failing to communicate with or provide accounting to beneficiaries, stealing assets or failing to distribute assets or pay valid debts in a timely manner.
What can happen with a wrong trustee?
Everything can go wrong because the effectiveness of a will or trust hinges on the individual entrusted to administer it, lawyers said.
Duke Shih, 57, from Altadena, California, knows this first-hand. His father named all four of his children as trustees, by descending birth order should one become unable to execute, he said.
What his dad didn't anticipate when he set up the plan was that his children didn't want those responsibilities and that Shih's siblings would join to contest the will, which left Shih a larger share.
"My sister, as eldest, quit (as trustee) a little after one year, and the next, the older of two brothers quit after a couple of months," Shih said. "The third sibling, my other brother declined to serve at all."
That left Shih, but since he's disabled, "my attorney thought I would be better protected to receive any disability benefits if I were not a trustee," he said. That was a "huge mistake because I am not receiving any benefits and even if I were, I could have still been trustee."
Shih's siblings then chose a professional fiduciary to act as trustee. Shih finally agreed to the plan, but the contesting continued until a mediation and settlement resulted. The settlement ensured his siblings immediately received their portions of the estate, while Shih's is tied up with the trustee who doesn't communicate with him but continues to bill, he said. And if Shih dies, his siblings get his share, which ended up "a fraction of what I should have received," he said.
In the will, "my father was trying to give me more, to provide for his disabled son as well as thank me for being the caregiver," he said. "My siblings became jealous" and joined to contest the unequal split, Shih said.
All of that meant "many thousands of dollars, upwards of $150,000, were burned up in attorney and trustee fees," he said. His father "would be devastated...my father thought he did everything right by hiring an attorney to write what he thought was a bulletproof will."
Beneficiaries like Shih can fight, but lawyers' fees are prohibitive and justice is slow. "I have tried various pro bono attorney organizations for help and all have said no," he said.
Family feuds that arise because not enough thought and communication happened during the planning process can not only deplete assets parents intended to gift but delay distributions. They can also wreck family relationships, and in a very public way, if a formal lawsuit results, lawyers say. Court filings in a probate court are public.
How can you pick a right trustee?
Be honest and check your gut.
"Ask practical questions instead of emotional ones," Yan said, "Has this person ever managed money that wasn't theirs? Do they hit deadlines? Do they call you back when the news is bad? Can they say no to their own spouse? Can they tell a sibling something that sibling doesn't want to hear and still show up at Thanksgiving? If the answer to a few of those is no, you can still honor that person in the plan. Just don't give them the checkbook."
Also, be cognizant that being both "beneficiary and trustee is difficult," said Maria Shufeldt, 69, who lives in South Pasadena, California, and was both when her parents passed. "You are responsible for equity to other people and protecting your own rights."
Communicate.
"Commit to transparency," said Christine Walker-Bowman, chief operating officer of Farmers and Merchants Trust Company. "Be honest with siblings and heirs on how the estate will transfer."
Communication is also free. It's "the fix that costs nothing," Yan said. And, "your own voice does more to prevent this than anything I can draft. It's the only part of this that money can't buy later."
If you're not comfortable talking about money, as many in the older generation might be, consider writing a letter, Walker-Bowman said.
"Write a personal letter expressing why you made the choices you made and what you want heirs to do with the money," she said. "That can be so helpful for whoever steps in as successor trustee or executor. Heirs who feel surprised can understand your true intentions."
Make it a job interview.
Whether you choose a friend or children, make sure they have the organizational skills, financial knowledge, time and commitment to do the job, experts said.
Additionally, check for the soft skills, Walker-Bowman said. "Will and trusts are legal documents for the legal transfer of assets and that taxes are accounted for, but they don't included the emotional element," she said. "Empathy is very critical."
So are openness and communication skills. "Silence is what turns a slow trustee into a defendant." Yan said. "Most of the trustees I've watched get sued weren't dishonest. They were quiet."
Spell out the job.
Specify duties in your documents, Yan said.
For example, put deadlines for asset sales and distributions in writing, name a trust protector who can remove and replace the trustee without going to court, specify the trustee's pay for doing the job and require regularly scheduled written accountings to every beneficiary "because a trustee who knows she'll have to show the numbers acts differently from day one," he said.
What if it's too late and you picked wrong?
Here's the ladder of escalation Yan suggests taking, starting with the first step:
- Get the document and find out what you're entitled to.
- Send a dated letter asking for a copy of the trust, a list of the assets, and a written accounting.
- Have a lawyer send the same letter. "This is where most of these quietly end," he said. "It puts your sibling in front of her own lawyer, who then tells her she's personally on the hook, the accounting isn't optional, and staying silent is going to cost her out of her own pocket."
- File a petition to the court asking the probate court to compel an accounting. You're not suing for damages. "It's often faster and cheaper than people expect, and a lot of the time the filing alone changes his behavior in a few weeks," Yan said.
- Escalate to a lawsuit, if the conduct earns it. But note, this is costly.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
This article originally appeared on USA TODAY: Before death, ask yourself how much you trust your trustee
