– Authored by: Collin D. Dickey
One of the most important decisions when creating a Trust is designating a Trustee. A Trustee will be the person, persons, or entity that takes on the role of administering your Trust upon your passing. The Trustee must administer the Trust in the way that you have intended and as instructed in your Trust. The Trustee’s instructions may be specific in nature so as to provide for circumstances that arise throughout a beneficiary’s lifetime. For example, a Trust may provide the Trustee with the ability to evaluate problems arising in your beneficiary’s life and to act in the beneficiary’s best interest. A Trustee may also have the power to control and invest trust assets so that those assets continue to mature towards full potential. And, of course, a Trustee will have the authority to distribute the Trust benefits as you have intended.
Factors that come into play when deciding on a Trustee include the financial and legal background and knowledge of the potential Trustee. It is always advantageous to choose a Trustee who is familiar with asset management. It is also important to be mindful of the potential for a conflict of interest. For example, you may not want to have your beneficiary acting as your Trustee. Availability and willingness of your Trustee to act can be very important as well. A potential Trustee may be willing to serve, however, he or she may not live nearby. Proximity to Trust assets is another factor to consider, but with technology, this may not weigh too heavily on your decision. Overall, you will want to choose a Trustee who you feel confident with. And there is no substitute for simply having a candid conversation with your potential Trustee to ascertain whether he or she is willing and able to jump into action in the event you pass away.
There are essentially four options when selecting a Trustee. You may choose a family member, a friend, a corporate Trustee, or a legal Trustee. There are advantages and disadvantages to each, and your choice will depend largely on your individual circumstances. For example, if you can foresee that your children may not get along after your passing, you may consider choosing a corporate Trustee who can remove all emotion from decisions. Or, you may choose a very close friend, whom you trust and is always nearby and available in an emergency situation. Others might feel very comfortable with designating a child as a Trustee, particularly when there may be only one child. A law firm may serve as Trustee as well, as the firm handling the drafting of the Trust will have the best understanding of your intentions.
Choosing the right Trustee is a crucial decision in order to ensure that your wishes are carried out. But regardless of whom you initially choose as Trustee, it is important to reassess that choice every few years. The person who is right today may not still be the right Trustee for you as time moves forward.
Call (248) 792-9193 or fill out the short form below. We will usually respond within 1 business day but often do so the same day. Don’t hesitate, your questions are welcome.
We respect your privacy. The information you provide will be used to answer your questions or to schedule an appointment if requested.
© Copyrights 2022. Rutkowski Law Firm: Our Asset Protection & Estate Planning Law Firm Office in Bloomfield Hills, MI. All Rights Reserved.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. Contacting us does not create an attorney-client relationship.