Trustee

Trustee

Any asset placed in a trust as part of your estate plan will require a trustee. The trustee acts as the legal owner of trust assets, and is responsible for managing the assets, ongoing administration and tax filings for the trust, and making distributions to your beneficiaries according to the terms of the trust.

The trustee designation is included in the terms of the trust. It is also recommended to name a successor trustee or include terms for choosing a successor trustee, to take over in the event your original trustee choice becomes unwilling or unable to serve in that capacity.

When choosing a trustee, consider the following:

  • Is the person willing to be a trustee?
  • Does the person have the skill to understand the trust terms, manage the assets (e.g., money, investments), complete tax filings, and keep records?
  • Does the person have the time to fulfill the role effectively?
  • What is the person’s relationship to the beneficiary? Will he or she be able to make objective decisions in the beneficiary’s best interest?
  • If the beneficiary will need a guardian, is the guardian also the best person to be trustee, or would the roles be better filled by different people?

If you don’t feel you know anyone who can carry out the duties of a trustee effectively, you might consider co-trustees or naming a corporate trustee. Corporate trustees, although require compensation, have the advantages of:

  • Being experienced financial professionals, familiar with maintaining and growing assets, keeping records, filing tax returns, and respecting client privacy.
  • Acting as neutral, objective third parties, who can make even difficult decisions according to the terms of the trust and in the beneficiaries’ best interests without the influence of personal bias or family dynamics.
  • Ensuring continuity for the life of the trust, unlike a private individual who may need to step down from the role due to illness, death, or other obligations.

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