You may have heard of the many potential benefits of including a trust in your estate plan. Are you worried about probate? A trust can be a great way to avoid it! Are you worried about your beneficiary’s ability to manage an inheritance? A trust can pace and condition distributions to protect the inheritance from being quickly spent away.
If you have decided to establish a trust, one of the big decisions you will need to make is who to appoint as trustee. The trustee, of course, will play an integral role in the management and execution of the trust terms. To help ensure your trust remains in good hands, selecting the right trustee is key.
Considerations When Choosing a Trustee
To establish a trust, the creator of the trust, the trustor or grantor, transfers assets into the trust and appoints a trustee to manage the trust for the benefit of the trust beneficiaries. In some cases, the trustor themselves may serve as trustee. This is the case with many living trusts. Even still, a trustor should name a successor trustee to serve if the trustor passes away or is otherwise unable to continue to serve as trustee.
You may have a number of options for who to appoint as trustee or successor trustee. You may be considering a friend or a family member or even a professional trust company. As long as the trustee is of legal age and able to manage their own affairs, your selection should be legally sound. There are a number of other considerations you should take into account, however, when selecting a trustee.
Consider, for instance, the role of trustee and the responsibilities it entails. A trustee has the sole legal authority to manage and sign for trust assets. The trustee is tasked with carrying out the instructions as set forth in the governing trust document. The trustee has the responsibility to collect income generated by trust assets and do the banking for the trust as well as paying the bills associated with the trust and making appropriate distributions to trust beneficiaries. Based on these responsibilities, you can see that selecting a trustee with some financial and legal savvy may be beneficial, although it is not required.
Above and beyond a specific knowledge set, a trustee should be, at their core, a trustworthy person who you can depend on to take the job seriously. It should also be a person who can commit to serving in the role for an extended period of time. Stability of a trust can greatly depend on the stability of the trustee. Frequent changes in who serves as trustee can jeopardize the running of the trust. Therefore, consider selecting an individual who is willing and committed to serving into the foreseeable future.
Estate Planning Attorney
Are you interested in learning more about how your estate plan could benefit from including a trust? Do you have questions about trusts and the role of the trustee? At Verras Law, we have answers for you. Contact Verras Law today.