By LAUREN FOSTER | Barrons

It’s easy for trustees to botch their roles. Here’s how to avoid the common pitfalls.

Trust and estate planning often comes down to three questions: Who gets what? How do you minimize taxes? And, once a trust has been set up, who is in control? Unfortunately, it’s easy for a family to bungle any one of the three. That’s especially so if you don’t have a professional on board as a trustee. Here are the five most common mistakes of do-it-yourselfers, and tips on how to avoid them.

FAULTY RECORDS: Most states require trustees to provide regular accountings to the beneficiaries— not only the income beneficiaries, but also what are known as remaindermen, the family members down the line who will receive the principal once the trust has been dissolved. This means keeping comprehensive records of income, as- sets and distributions—and many trustees fall short of the mark. “This is probably the most mundane, and at the same time, the most troubling task for individual trustees,” says David A. Baker, a partner in law firm McDermott Will & Emery. The price of failure could be a big lawsuit later on by a beneficiary or remainderman.

Tip: Assemble a reliable outside team with a money manager, a trust lawyer and a tax pro.

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