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Question: 1. Before her passing, a long-time client asked you to serve as the Trustee of a trust for their two children. You accepted, and are now given the discretion to decide which of the two children receive distributions from the trust and in what amounts. You have invested wisely, and the trust has grown significantly in value over the years. The trust property is now worth over $10 million and earns over $1 million per year. You, however, have been very careful about making trust distributions to your old client's two children. You have required the children to exhaust their own resources before approaching you to get trust money. You supply adequate funds for food, lodging, and pay comprehensive medical insurance. The two children are getting fed up with living meager lifestyles while the trust is brimming with money that they will not be able to reach for many decades. Identify and discuss if you have any ethical problems in being the Trustee.

2. Identify what duties, if any, you have with respect to serving in this role as Trustee.

3. Assume that one of the two children is a "high" achiever and you like them. You have decided to support their pursuits for medical school while refusing to bankroll the other child's aspirations at a music career. Would these facts change your answer to #1, and if so, how?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92572297

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