Setting up a trust has a lot of intricacies but most people only focus on the assets, the beneficiaries and how everything will be distributed. The major decision that can make or break the smooth process of setting up a trust is choosing the right person to manage the trust also known as the trustee.
In this article, we’ll discuss more on who should manage your trust. Continue reading to learn more:
What Does a Trustee Actually Do?
Think of a trustee as the person who’s in charge of carrying out the instructions in your trust. That means:
- They manage and protect the assets in the trust
- They’re responsible for distrust assets to the right people at the right time
- They keep records and handle taxes
- They make sure everything is done according to the law
Being a trustee is a serious job that requires someone who is responsible, organized and also trustworthy.
Qualities to Look for in a Trustee
Not everyone is cut out to be a trustee, and that’s okay. When choosing the right person, here are a few qualities you want to look for:
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Trustworthiness
They should act in the best interest of your beneficiaries, not themselves.
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They should be financially smart
They don’t need to be an accountant, but they should have an understanding of money management and how money works.
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Good communication
They need to have great communication skills because they’ll be in constant touch with the beneficiaries, and maybe even lawyers or tax pros.
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Availability
Managing a trust takes time, so you’ll want someone who can commit.
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Fairness and calm under pressure
Family drama can come up and your trustee should stay neutral and keep things calm.
Your Options: Who Can Be a Trustee?
This is the part where it gets interesting. People have different methods by which they choose a trustee, such as:
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A Family Member or Friend
This is the most common option. Since a family member or friend is someone you know and trust, they may be willing to help out without charging a fee. However, they may lack the experience and may let emotions get in the way when family drama and disputes come up.
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A Professional Trustee
This might be a trust lawyer, accountant, or financial advisor who offers trust management services. They have the experience and are knowledgeable about the law and finance. But their service comes at a cost and they may not know your family on a personal level.
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A Corporate Trustee (like a bank or trust company)
If your trust is large or complex, a corporate trustee could be your best option. They offer long-term stability, they bring aboard a full team of expert and professional administration. But their service cost more and they may not be personally attached to the trust process.
How a Trust Attorney Can Help
If you’re unsure who to choose, that’s where a trust attorney comes into the picture. A trust attorney helps you weigh the pros and cons, consider backup trustees and even prepare rules in case you need to replace a trustee when things don’t work out as planned. In fact, if a trust is mishandled or mistakes are made, you may even have legal grounds to sue a trust attorney for estate planning errors.
Conclusion
Choosing the right trustee is just as important as creating the trust itself. It’s a decision that requires careful planning. Before you choose a trustee, talk it over with your attorney and choose someone who can handle the responsibility with care.