Q: I am a co-trustee. The beneficiaries have agreed to forgive a trust loan. Can I protect myself from future litigation?
I am a co-trustee of a trust created by my mother and step father. One beneficiary owed a rather large sum to the trust. The beneficiaries have chosen to forgive this debt to the trust. I'm afraid that in the future they will change their minds and take the co-trustees to court to go after these funds. Is there a way to protect myself before the beneficiaries are paid?
A: You are right to be concerned. My best advice would be to have an attorney help you draw up an iron-clad instrument for the successor trustee and beneficiaries to sign agreeing and consenting to the forgiveness of debt.
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