Articles

Properly Titling Trustees’ Signatures Can Protect Their Assets by Jeffrey M. Mutnik, CPA/PFS

Posted on September 24, 2021

When individuals sign legal documents, including personal checks, contracts, tax returns, etc., they generally are not required to add any language explaining who they are. Their names alone satisfy the legal requirements for validating those documents.   However, when those people are also officers of corporations or managers of partnerships or LLCs, they usually include their titles to establish themselves as representatives of those entities and not as individual signatories personally responsible for upholding the documents’ terms.

Similarly, trustees signing legal documents as fiduciaries of trusts (and not as individuals) should always distinguish themselves as such by including the explanatory phrase “as trustee” after their signatures. This also applies to checks trustees endorse to deposit into trusts accounts. With this additional nomenclature, trustees may avoid future entanglements and legal liabilities should there be any claims that they are individually responsible to complete the terms of the signed document and/or did not perform their fiduciary duties to put the interests of the trust ahead of their own personal wants and needs.

For an added level of protection, trustees may also consider expanding this language further with the phrase “as trustee and not individually,” or “as trustee but not individually.” While this will not guarantee a trustee will avoid being dragged into a lawsuit, adding his or her title essentially puts all parties on notice that the trust and not the trustee is the party engaged in the transaction. This is a no-cost, low level of asset protection that every trustee should practice.

About the Author: Jeffrey M. Mutnik, CPA/PFS, is a director of Taxation and Financial Services with Berkowitz Pollack Brant Advisors + CPAs, where he provides tax- and estate-planning counsel to high-net-worth families, closely held businesses and professional services firms. He can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or via email at info@bpbcpa.com.