In the course of a trust administration, beneficiaries primarily want to know what will be distributed to them and when it will be distributed. Attorneys who represent trustees, however, must prevent trust distributions until the proper time—that is, until all liabilities have been paid or reasonably accounted for with a reserve. Otherwise, a trustee may face personal liability and need to seek indemnity from beneficiaries who may have already spent the funds distributed to them. In a postdeath administration, there may be trust and nontrust liabilities (or the decedent’s liabilities), including the decedent’s debts and various taxes. In addition, a trustee must pay the expenses of the administration or reserve funds for payment of those expenses. 

From the announcement of the 2023 limits on contributions to retirement accounts to a new proposed rule for classifying independent contractors, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practices.

Carol and Richard were married for 14 years but separated in 1989. As part of their separation agreement, they each agreed to execute irrevocable wills that named only their two children as beneficiaries of their respective estates. Each party agreed to give a copy of their new will to the other.

Many years thereafter, Carol and Richard both remarried other individuals, and each executed new wills. Carol’s new will left her personal effects to her new husband. If he were to predecease Carol, then her personal effects would be divided between her kids and her new husband’s kids. The residue of Carol’s estate was devised to a revocable trust; Carol and her new husband were grantors of the trust and each retained a general power of appointment to change the beneficial interests of the trust.