A trustee holds legal title to trust assets and must carry out trust instructions. Trustees and successor (i.e. back up) trustees must be appointed. Sometimes, trustees work together and they are referred to as “co-trustees.”
Trustees are needed for revocable living trusts, charitable trusts, special needs trusts, pet trusts, children’s trusts, spousal trusts, dynasty trusts, life insurance trusts, generation skipping trusts, personal residence trusts, family trusts, and marital trusts.
While there are differences in instruction in these trusts, it’s always beneficial to consider these 9 tips when choosing a trustee.
- Choose a trustee who is a good communicator; your trustee will need to communicate with professional advisers and beneficiaries.
- Choose a trustee who is trustworthy; your trustee will be dealing with other people’s assets.
- Choose a trustee who is organized and a good record keeping; it is imperative for your trustee to keep a record of investments, disbursements, income, and distributions.
- Choose a trustee who wants to do the job; your trustee will only do a good job if he wishes to serve; always ask your trustee if he is willing to serve before appointing him.
- Choose a trustee who cares about you.
- Choose a trustee who will follow direction; your trustee must follow trust instructions as well as professional advisor advice and instructions.
- Consider naming co-trustees for a check and balance or if one person doesn’t have all of these trustee qualities.
- Be sure to name successor trustees in case your primary trustee is unable or unwilling to serve.
- Consider trustee duties when choosing a trustee.
Example trustee duties
- Gathering, protecting, appraising, and managing trust assets
- Paying bills
- Filing appropriate tax returns
- Communicating with beneficiaries
- Making trust distributions pursuant to trust terms
- Asking your professional advisors for help if he needs it.
If you have questions or concerns about choosing a trustee, consult with a qualified estate planning attorney.