One of the most important decisions you will make is who will serve as your trustee. The trustee you name will play a key role in administering your trust. After you die he will be tasked with transferring your assets according to your wishes. Even the best written trust can run into trouble without the right trustee to guide them.
Here are some key points in deciding who is the right trustee.
Find Someone Who is Capable, Willing, and Qualified
First things first: It’s tempting to simply name your best friend or a close family member as the trustee, but before you do so, ask these questions:
• Is this person willing to serve as trustee? Don’t just assume the answer is yes, as being a trustee can require time-consuming work. You need to confirm that he has the time to manage your affairs as well as his own. Many people who have acted as a Trustee realize that it is a “thankless” task and will not act again!
• Is the person qualified? For instance, if your trust includes a lot of real estate investments, your trustee needs to be someone who has a background in real estate.
• Is the person capable? Do they have good sense about legal and financial matters? And do you trust them to be responsible with the handling of your assets?
Should You Appoint a Family Member?
There is no legal reason why you can’t appoint a family member to be your trustee—but be warned that picking a family member isn’t always the best idea. That’s because the trustee is someone who will need to be totally impartial in how and when they divide assets.
Avoid the Cotrustee Trap
Although California law allows you to appoint multiple trustees (not limited to merely 2), cotrustee situations can be problematic. That’s because all trustees will have to sign off on any decisions that are made about the trust, and getting them all on the same page can be challenging. If you appoint 3 cotrustees then you often have 6 individuals involved because the in-laws always want to give their opinions as well. Plus, it’s common for one trustee to do the lion’s share of the work and grow in resentment of the other trustees—not an ideal situation.
It’s possible that your appointed trustee could die before completing the necessary trust duties. You’ll want to make sure there is a continuity plan in place. One option is to pick an individual who you know will pick a successor in a timely manner. An even safer approach is to select an institutional trustee—like a bank or trust company. That way, you can rest assured that there will always be someone on hand to attend to your assets and who will be impartial.
Picking the Right Person to Manage Your Trust
There are a number of factors to keep in mind as you select your trustee, and as you seek the most trustworthy and capable person for the job. A good way to cover your bases and consider all the best options is to consult with an estate planning specialist, who can walk you through this important decision.
Whether you want to establish a living trust or simply have questions about the role of the trustee, I would like to talk to you more about any of your estate planning questions. Call Irene at 949-756-0684 to set up an appointment.