Trustee & Beneficiary Mediation

Trustee and beneficiary mediation can be quite important when dealing with finances, as a third-party is sought out to smooth over what can be a tough relationship to negotiate. The trustee is the institution, individual, or organization that holds legal title to the trust property and manages and administers those assets, while the beneficiary is the person entitled to receive the advantages and benefits of the trust. Beneficiaries may often complain that trustees do not have their best interests at heart and are single-mindedly trying to collect their own annual fees. Or, alternatively, beneficiaries may feel bogged down by paperwork that is unclear and ambiguous. Sorting through stacks of papers may take away time from other more pressing matters. Furthermore, beneficiaries might feel as if their questions are not being answered and that it is difficult to communicate with the trustees.

Trustees, likewise, have their own problems that can run the gamut from angry beneficiaries spamming them with unwanted phone calls, texts, and emails, or even worse, retributive litigation. Beneficiaries, after all, may not understand the lawyering jargon that comes with the terrain of judging whether they have immediate access to income or principal and may simply blame any obstacles on uncooperating trustees. Especially inflaming is when they need and are requesting money but their requests are not heard by trustees. Misperceptions and emotions can cloud the perspectives of any beneficiary or trustee. As with any relationship, communication is key, and when that is not being fulfilled, it may be time to seek out a third-party alternative resolution, namely, mediation.

Mediation is a powerful, effective alternative dispute resolution that may be more favorable than litigation for a number of reasons. It is less in the public’s eye, for one point, and additionally can be much less time-consuming and wasteful of paper. Mediation maintains the confidentiality aspect of the trustee-beneficiary relationship while lending more objectivity to the situation. A mediator can provide a third-party, objective, judge kind of figure who helps both sides mediate a compromise, keeping both sides happy. Mediation is similar to arbitration, which involves a third-party arbiter whose decision can either be binding or non-binding, the latter meaning the decision can be appealed in court with litigation. Any grievances or reveals admitted during mediation are not admissible in any subsequent legal proceedings also, so both parties can treat the mediation process as a sort of therapy where they air out their complaints free of repercussion. As seen in any number of John Graham or Agatha Christie novels, people can become furious over matters of wealth transferring, but their angst can all be worked through with mediation. As with all solutions, however, mediation is not without its pitfalls. Unfortunately, as a resolution and/or compromise achieved through mediation is non-binding, it must be carried through with good faith and could still be reneged upon by either party, meaning that all the time spent mediating would have gone to waste. It is therefore essential in a good mediation that both parties come to the floor open-minded and willing to at least speak civilly.