Opinion of counsel to be given to trustee: Overview, definition, and example
What is an opinion of counsel to be given to trustee?
An opinion of counsel to be given to trustee is a formal legal statement provided by a lawyer (counsel) to the trustee of a trust or estate. This opinion typically addresses legal matters that are relevant to the trustee’s duties and responsibilities, offering guidance on the interpretation of the trust agreement, the legality of specific actions, or the trustee’s obligations under the law.
In many cases, the trustee of a trust or estate is required to seek and obtain an opinion of counsel before taking certain actions, such as making a distribution, executing a transaction, or resolving a legal issue. The opinion of counsel ensures that the trustee is acting in accordance with applicable laws and trust terms, providing legal protection to the trustee from potential liability.
Why is an opinion of counsel to be given to trustee important?
An opinion of counsel is important because it provides legal assurance to the trustee that their actions are in compliance with the law and the terms of the trust. Trustees have fiduciary duties to act in the best interests of the trust’s beneficiaries, and obtaining a legal opinion helps to ensure that they are making informed decisions that will not expose them to unnecessary legal risk.
For businesses and individuals involved in managing a trust, obtaining an opinion of counsel can provide peace of mind by clarifying legal uncertainties and guiding trustees on the proper course of action. Additionally, the opinion of counsel may offer a layer of protection for the trustee if their decisions are later challenged.
Understanding opinion of counsel to be given to trustee through an example
Imagine a trust that holds a large real estate portfolio. The trustee is considering selling a property and distributing the proceeds to the beneficiaries. However, the trustee is uncertain about whether the trust document allows for this sale and whether the transaction complies with tax laws.
To resolve this, the trustee seeks an opinion of counsel from a qualified lawyer. The counsel reviews the trust document, relevant laws, and the proposed sale and provides a written opinion confirming that the sale is legal and in line with the terms of the trust. The opinion protects the trustee by ensuring they are acting within the bounds of the law and the trust’s guidelines, reducing the risk of any future legal disputes.
In another example, a trustee might be asked to determine whether a certain distribution to a beneficiary is permissible under the trust’s terms. The trustee seeks the opinion of counsel to clarify the legal requirements and ensure they are acting in accordance with the trust’s provisions. With the opinion of counsel, the trustee can move forward confidently, knowing they are in compliance with the law.
An example of an opinion of counsel to be given to trustee clause
Here’s how an opinion of counsel to be given to trustee clause might look in a contract:
“Before taking any action in connection with the administration of the trust, including but not limited to distributions, sales of assets, or amendments to the trust, the Trustee shall obtain a written opinion of counsel confirming that the proposed action is consistent with the terms of the trust and complies with applicable laws and regulations.”
Conclusion
An opinion of counsel to be given to trustee is a legal safeguard that ensures the trustee acts in compliance with the law and the terms of the trust. It provides protection for the trustee by offering professional legal advice on specific decisions, helping to prevent potential legal challenges. For both trustees and beneficiaries, the opinion of counsel serves as an important tool in maintaining the integrity of the trust and ensuring that all actions are taken with legal clarity.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.