HOW TO PICK A TRUSTEE
You have worked so hard for your assets – Now , who to trust ?
What Does my Trustee do ?
A trust is an agreement , specifically , a contract , which describes what happens with the trust assets upon your death . However , a person is required to make sure your wishes in the trust are carried out – this person is your trustee . During your life time , you will be the acting trustee of your trust . When you create your living trust , you will nominate successor trustees . These individuals will succeed you upon your passing to fulfill the position of trustee at that time .
The trustee is a fiduciary and owes certain duties to your beneficiaries . The trustee must always act in the best interest of the beneficiaries and estate , and must not intentionally do anything that could work against the beneficiaries . Ideally , the trustee should be fiscally sound , conservative , and financially savvy . The trustee needs to be , quite simply , a trustworthy individual .
The trustee will ensure that your bills are paid , your final taxes are paid , and your assets are distributed to your heirs . When the time comes , the trustee needs to know how to gain access to your personal information and your Estate Planning documents . The more organized you are , the easier it will be for the person executing your documents . In our Estate Planning practice , we recommend that our clients create a list of active assets , such as bank accounts , retirement information with account numbers , life insurance policy information with policy numbers , real estate addresses , mortgage information , and credit card carriers . This makes the life of your trustee a lot easier . You need not provide this information to your trustee during your lifetime , but it is ideal to inform the trustee where he or she can find these details , should you pass away .
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How Long will my Trustee Serve ?
If you have young children , the trustee will be performing their duties until the trust dictates that assets should be distributed outright to your children . Thus , it will be prudent to nominate a trustee whose age and health will allow them to be present with your minor children for a number of years . Even if you do not have young children , it might be fruitful to select a trustee who is younger in age to yourself . Should my Children be my Trustees ?
There are a few questions to ask yourself before you decide to nominate your child as your trustee . Is your child old enough ? Your trustee must be 18 years or older . Even if your child has reached the age of majority , are they up to the task from a maturity stand point ? If you have more than one child , will you name them as “ co-trustees ”? If you name your children as co-trustees , will they be willing to work together ? Or will this create conflict ? At first glance , it seems the ideal choice to name your children as trustee , but it can result in unforeseen complications , if the idea is not properly thought out .
My Business Partner May Not be an Ideal Candidate as Trustee
Naming your business partner as your trustee is another common potential pitfall . There is a clear conflict of interest here as your business partnertrustee owes a fiduciary duty to your children or heirs . However , as your business partner also has something to gain from your joint business , the business partner may forget to serve the best interests of your family , and favor his own interests instead .
Can I Hire a Bank or Other Professional to be My Trustee ?
Corporate Trustees are professionals / institutions
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