Dear readers, I received a request to run this column again. I hope you find it informative.

Q I am in such a bad situation! I have been working as the trustee for a friend. She died and left me in charge. I get one share of her sizable estate and the rest goes to her two children, both of whom are now adults. These two are giving me nothing but grief! They question and second guess everything I do. They now have attorneys who are harassing me. What I really want to do is resign — I don’t even care if I get my share! My attorney says that may not be the best way to go because they would then be entitled to all my confidential attorney-client communications. I am under siege and just want out! What should I do?

A: I agree with your attorney that resigning may not be the best tact to take. Legal advice to you, as trustee, stays with “the office of trustee” and if a new trustee were to step in, they would have full access to the legal file that was built while you were acting as trustee. Similarly, if a trustee wants information from legal files that the deceased person had prior to death (even before the trustee became the trustee), those files can now be released to the trustee. This can be very helpful, particularly if a trustee is attempting to get information about a legal matter that occurred before they stepped in as trustee. For example, I am the current trustee in a matter where the decedent may have gotten water credits issued to a parcel of land held by the trust. If I can prove the water credits exist, the land will be more valuable, and this will be to the advantage of his beneficiaries. I have contacted the attorneys he worked with and hope to see the files soon.

Another thing to consider is that while you are trustee, the assets of the trust can usually be used to pay your legal fees in defense of your actions. If you resign and the successor trustee decides to sue you, you will have to expend your own funds to defend yourself!

Finally (and this is something that will keep you awake tonight, sorry), when you became trustee, you put your personal assets on the line. As a trustee or executor, should you slip-up and do something wrong, the court, IRS and other agencies can come after your personal assets. Your home, bank accounts and other assets could be in jeopardy if it is shown that you committed a breach of your fiduciary duties. This is just awful and many are not aware of this issue. As a professional trustee, I can (and do) carry liability insurance for the work that I do but individuals who are providing services as executor or trustee to a friend or family member cannot get this kind of insurance.

It can be a thankless job for you, as trustee for your friend. The good thing is, however, if a trustee is doing the best job they can and acting “honestly, reasonably and in good faith” they are normally treated fairly by the courts — should it come to that.

Liza Horvath has over 30 years of experience in the estate planning and trust fields and is a licensed professional fiduciary. Liza currently serves as president of Monterey Trust Management. This is not intended to be legal or tax advice. If you have a question, call (831) 646-5262 or email liza@montereytrust.com