Choosing Your Trustee
A trustee is an entity or a person who you appoint to manage your trust after you can no longer manage the trust yourself. For a Revocable Living Trust, this person is your successor trustee. In this article, we will go over what you need to know for successfully choosing your trustee.
Duties of a Trustee
A trustee is a fiduciary. This means the trustee must act in the best interests of the trust beneficiaries. To be able to competently carry this out the trustee must thoroughly understand the terms of the trust. This is vital as it ensures that everything is being done according to your wishes. Being a successful trustee involves competently managing the trust funds for the beneficiaries. This would include choosing the best fit for accounts and investment choices, as well as managing any properties that the trust may own. The trustee is also responsible for distributing trust funds to the beneficiaries according to the trust provisions. Lastly, the trustee is responsible for filing a tax return for the trust.
Types of Trustees
There are three types of trustees that you can use in your trust.
- Single Trustee: The most common type of successor trust is a single trustee. This typically is a family member or trusted friend who can handle the responsibility of being a trustee.
- Co-Trustees: Co-Trustees are two trusted family members and/or friends who act together as trustee. You can either require them to do everything together or allow them to act independently of each other.
- Corporate Trustee: A corporate trustee is a company that you pay to complete the actions of the trustee. This is a good option if you do not have someone in your life that can handle the responsibilities of being a successor trustee.
Considerations for Choosing Your Trustee
There are also some additional considerations you need to consider when choosing your trustee. The first thing that you need to think about is your successor trustee’s age and availability, you do not want to choose someone who is too young to handle the responsibilities as trustee. You also do not want to choose someone who does not have the time to care for what needs to be done.
Second, you need to consider the persons’ reliability and experience. Being a trustee is a huge responsibility, so you need someone who can handle that responsibility. A major part of this is their experience. You want someone with enough financial experience to care for trustee duties. Lastly, you may want to consider their professional expertise. Professional expertise is not a requirement but should consider it. This is the case because someone who has professional expertise may be in a better situation to be trustee than someone without.
Making the Choice
Now that you understand the basics, you are in a better place for choosing your trustee. However, it is a very personal decision and will differ from person to person. Take the time to weigh your options so that you can make the best decision possible.
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