Choosing a Trustee: The Not-So-Obvious Choice


So, you have made the choice to visit an estate planning attorney and after meeting with the attorney you have determined that a trust is the right estate planning tool for you. All the hard choices are over, right? You may be thinking the estate attorney can handle the rest and make all the tough choices now. But now comes another very important choice: who will serve as your trustee, or your successor trustee? This decision is entirely up to you, and it can have big consequences.

Some may choose to name their spouse as trustee because oftentimes, the surviving spouse is a primary beneficiary of the trust. Others may choose to have siblings serve as co-trustees, or a sibling may serve as trustee of the other sibling’s trust. This seems reasonable at first glance, and it certainly keeps things fair between family members. But the big question is whether these individuals will have the ability to fully understand and respond to their fiduciary duties under the trust. As a settlor of a trust, we give trustees a lot of power to administer our trust appropriately, so we should give this choice some due consideration.

When searching for the right trustee, there are some obvious traits that would be helpful for the management of trust assets. Honesty, for example, when managing someone else’s assets, is an important trait. It is also important for trustees to be dependable and organized. Another concern is whether the proposed trustee has any financial experience of their own, either in their career or in managing their own finances.

Aside from the obvious traits, it may also be worth considering whether the chosen trustee has the time and patience to commit to a trust’s administration. Depending on the assets and beneficiaries of a trust, administration could be more time consuming than many trustees anticipate. It could be that the trustee must hire and work with other professionals, like accountants for example. It could be that some beneficiaries require more attention than others and take up hours of trustee time. Another often overlooked trait is the age of a trustee. If the trustee named is much older than the beneficiaries, there is a risk that the trustee may pass away and leave a void where no successor trustee is named. If naming co-trustees, it is also important to consider whether the trustees generally get along with one another, and to consider who will have tie-breaking power in the event of disagreement.

All of these considerations are important, and the right choice when setting up a trust can avoid extensive litigation in the future. Unfortunately, once the settlor of a trust passes away, distrust of a trustee can breed resentment and hostility, thus instigating lawsuits over breach of fiduciary duties, among other claims. This is even more so when family members are involved as trustee and beneficiaries. For some families, a corporate trustee or another professional, such as an accountant, may be the neutral choice. Regardless, it is an important choice to make in your estate planning process.

At Jolley Law Group, we have the experience and knowledge to assist you in making important decisions throughout your estate planning process. Contact us for estate planning questions and tools to help make the process go smoothly.

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