Tips From the Pros: Third-Party Dealings With TrusteesTips From the Pros: Third-Party Dealings With Trustees

Experienced trusts and estates professionals ordinarily think of a trust as a relationship among a triumvirate of the settlor, the trustee and the beneficiaries.¹ Quite often, however, parties not directly connected with a trust become immersed in aspects of trust administration. Transactions involving these outside parties, if not implemented with care, can be hazardous for all concerned.

Third parties and trustees may negotiate or engage in business dealings in a variety of contexts. A trustee may sell trust property to or purchase assets from a third party. A trustee may borrow funds from a commercial lender or an individual. A beneficiary or a closely held business whose equity is held in trust may seek to borrow from a third party an...