Q: I have always been close to my uncle and aunt, who have no children of their own. As they approach their 80s, they have asked me to become involved in their estate planning. They want to place all of their assets into a trust, have me write the checks for their needs as long as they live, and then distribute the funds to whom they choose.

Much to my surprise, these quiet, modest people have assets of more than $3 million, and they have decided to benefit, in different percentages, their 16 nieces and nephews (including me), 12 grandnieces and nephews, and some favorite charities when the last of them dies.

They asked that I be both their trustee and the personal representative of their estates. Although I am flattered, I am concerned about the time commitment (I am a nurse), the risk of dealing with so many people (many of whom I do not know well) and the length of the commitment (some of the grandnieces are babies). Yet, I don't want to turn them down.

A: We agree with your concerns. Trustees are fiduciaries who, by law, have duties to act in the best interests of beneficiaries, and today, lawsuits are waiting to happen because the duties and responsibilities of fiduciaries are often poorly defined by trust documents and misunderstood by trustees and beneficiaries who, as here, will receive windfall benefits from unexpected sources.

People who establish trusts are called "settlors." Trusts own and control property under terms established by the document. Once property is placed in the trust, the trustee holds legal title for the benefit of the beneficiaries who have equitable interests in that property. In other words, the trust divides property ownership between the trustee, who has the responsibility to properly administer and distribute the trust property, and the beneficiaries, who receive the benefits, all according to the settlor's directions. Each trust should specifically state its purpose, the identity and share of each beneficiary, the specific property to be placed in the trust, the duties of the trustee, and the identity of the trustee.

Since a "trust" creates a "fiduciary relationship" between the trustee and each beneficiary, the trustee immediately incurs the risk of potential liability to each beneficiary. One of the greatest risks today is the trustee's responsibility to invest the trust property prudently. This means that the trustee has the duty to 1) diversify the investments appropriately, 2) invest at a suitable risk level, 3) avoid unnecessary expenses, 4) seek professional advice when necessary from appropriate advisers, and 5) monitor the trust activity. Should the investments not perform, the trustee can be sued. The standard, we are afraid, is somewhat hazy, as hindsight is always 20-20. This means that if a beneficiary does not believe the trustee is fulfilling his or her duties, the beneficiary can go to court to try to remove the trustee and sue him or her for damages.

Taking the NextStep: We believe that, in this situation, the potential liability to 28 people over a long period of time is too great, the pay is too little, and life is too short to be involved as a trustee. Unless the trust is prepared in a manner that absolves you of liability and sets forth mandatory directions about investment decisions, we suggest that your aunt and uncle secure professional trust services, and you can be appointed to help make their health and related decisions if they become incapacitated.

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Q: My wife and I have no close family. When we went to our lawyer to prepare our powers of attorney and wills, he offered to act as our agent and as executor of our estates. Is this OK?

A: So long as you, your wife and your lawyer are aware of the potential conflicts of interest that arise, whom you choose to act as fiduciary is up to you. We don't recommend this conflict-ridden relationship, however.