Tough trustee decisions
Trustees have decision making roles and some decisions aren’t easy. For example when:
There is disharmony between parties
There is a need to balance competing beneficiary interests
Emotions are running high
High value trust property is involved
The best course of action isn’t clear
Matters are complex
The pressure is to make a decision
There is limited information on which to base a decision
The decision is significant in the context of the trust
The trustee is inexperienced
Handling tough or significant decisions is part of the challenge of being a trustee. When trustees take on the role, they won’t always know what they will have to deal with. Each situation is different.
Sometimes trustees will find that whatever decision they make, not everyone will be happy. That's part of the job but it can feel like a no-win situation. Emotions often run high.
Big decisions can have unforeseen consequences which may only be known in years to come. Another trustee could be sitting in the trustee chair when that happens. Or, you could be the trustee sitting in the chair having to deal with a decision made by a former trustee.
When you're dealing with other people's interests, it's important to make decisions with an high level of care.
When particularly tough or significant decision, it’s a time to rely on good process.
Here's a broad decision making process that may be useful for those times:
Identify the decision required and the trustees’ authority .
At an early stage take advice on any matters which the trustees do not understand. This advice may include the process to be used to make the decision. Consider forming an advisory panel.
Communicate the decision making process and consult interested parties (e.g. trust creators, beneficiaries). People respond better if they feel have had a chance to have input into the decision. Consultation enables trustees to intercept potential issues at an early stage.
Consider and assess the relevant facts and options available. Weigh up the merits and shape a preferred option.
Make a decision and record it in writing. Keep a copy of the advice received and information relied upon as part of the trustee records.
Implement the decision and track the outcome.
Tough decisions can involve uncertainty. Often the best option or course of action may emerge and become clear during the decision process.
When the pressure is on, the best antidote for uncertainty is good process.
Trust good practice.
Lindsay