Counseling Fiduciaries and Beneficiaries

Overview

A fiduciary’s role in administering trusts and estates has become increasingly complicated. Addressing the needs and rights of beneficiaries against the backdrop of ever-changing federal or state laws can be challenging. Our lawyers, located across the country, have the experience and technical skill to guide corporate and individual fiduciaries in:

  • Properly carrying out the terms of a trust or will.
  • Utilizing different state laws to achieve desired administrative objectives.
  • Avoiding conflicts of interest and claims for breach of fiduciary duty.
  • Managing beneficiary relationships to avoid litigation.

Our fiduciary clients are increasingly interested in the flexibility provided by different state laws, including the ability to: alter certain terms of irrevocable trusts, change the state situs of a trust, settle disputes without the need for court proceedings, and separate the investment and distribution functions of a trustee. We take a creative approach by using these new state laws to assist fiduciaries and beneficiaries to most effectively administer trusts.

Tax Matters

The income, estate, gift, and generation-skipping tax issues involved in trust and estate administration require the highest level of tax experience. In many situations, our role is to provide the necessary technical advice to maximize long-term tax benefits to beneficiaries. We are often involved in designing and implementing tax efficient trust construction and reformation proceedings. In many cases, this can be achieved only by obtaining private rulings from the Internal Revenue Service. When disputes arise with federal and state taxing authorities, including audits, appeals, and court cases, our clients benefit from our nationally recognized tax controversy practice.

Dispute Resolution

We are routinely engaged by corporate and individual fiduciaries to assure they are fully discharging their responsibilities to beneficiaries. Often, concerns can be addressed through clear communication and innovative use of tax laws; however, issues must be resolved through negotiations and court proceedings. When necessary, we combine our experience in fiduciary matters with the litigation skills of our colleagues in defense of the fiduciary’s interest.

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Business Assets Held In Trust

Because we have worked for decades with family business owners, we offer fiduciaries practical insights into the expectations and potential conflicts they may face when responsible for a family business trust relationship. Our advice to fiduciaries involves an examination of alternative approaches with respect to their obligations for closely-held business property. When a fiduciary is also a family member, we are able to provide objective counsel to them as trustees or executors so that they can remain as independent as possible for legal, ethical, and family reasons.

Working with Beneficiaries

Beneficiaries rely upon our advice to better understand and protect their legal rights, arising under the terms of a trust agreement or will, or under state law. Often, a beneficiary’s interest is subject to fiduciary discretion and we are called on to assist in interpreting the scope of that discretion. In many cases, a trust or estate has multiple beneficiaries whose interests may conflict and disputes may arise among the beneficiaries. We are able to establish realistic expectations in a given situation and to work creatively on behalf of beneficiaries to achieve their individual goals.

Recognition

  • BTI Client Service 30: BakerHostetler advanced 19 positions to #9 (2016)
  • “Best Law Firms” 2014: National Tier 1 Ranking in the area of Trusts & Estates Law from U.S. News – Best Lawyers®.
    • Regional Tier 1 rankings were earned in Trusts & Estates Law in Cleveland, Colorado, Columbus, and Washington, DC.
  • The Best Lawyers in America© 2014: Twelve partners were selected by their peers for inclusion in various private wealth-related fields.

Publications

Blog

In The Blogs

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WealthDirector
Tax Season Is in Full Swing: Beware of the W-2 Spear Phishing Scam
January 27, 2017
By Patrick H. Haggerty Editor’s Note: This blog post is a joint submission with BakerHostetler’s Data Privacy Monitor blog. Last year we saw an unprecedented number of companies of all sizes fall victim to a W-2 spear phishing scam. The...
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WealthDirector
Same-Sex Spouses Authorized to Recalculate Transfer Tax Treatment of Prior Gifts and Bequests
January 20, 2017
The IRS recently issued Notice 2017-15 to provide same-sex spouses relief to recalculate the federal estate, gift and generation-skipping transfer (GST) tax treatment of gifts and bequests made before the Defense of Marriage Act (DOMA) was...
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WealthDirector
The Impending Death of the Stretch IRA?
November 10, 2016
It can, at times, seem like a fool’s errand to focus too closely on specific provisions contained in proposed legislation. As any casual observer of Congress can attest, committee proposals frequently die unenacted or undergo significant...
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WealthDirector
IRS Revenue Procedure Confirms IRS Will Respect QTIP Elections When Portability Elections Also Made
By Amanda K. Baker
October 24, 2016
The IRS resolved an important issue when it issued Revenue Procedure 2016-49, effective September 27, 2016, clarifying that the IRS would not disregard qualified terminable interest property (QTIP) elections for estates that also made a...
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WealthDirector
IRS Regulations Clarify Definition of Spouse for Federal Tax Purposes in Light of Obergefell v. Hodges
By Amanda K. Baker
October 18, 2016
The IRS has issued final regulations clarifying the definitions of “spouse,” “husband,” “wife,” and “husband and wife” for federal tax purposes. The final regulations now define “spouse,” “husband” and “wife” as any individual lawfully...
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