Estate PlanninG

Who Should I Choose As My Trustee?

Naming a trustee is the next important step after establishing your trust. A trustee’s responsibilities include collecting income, paying bills and taxes, saving and investing for the future, buying and selling property, providing for loved ones, keeping accurate records, and generally keeping things organized and in good order.

Who can be my trustee?

You can be your own trustee if you have a revocable living trust. If you’re married, your spouse can be co-trustee. If either one of you become incapacitated or dies, the other can continue to handle your financial affairs without interruption. Most married couples who own accounts and property together, especially those who have been married for some time, are usually co-trustees. An important note: most irrevocable trusts don’t allow you to be a trustee.

Even though you may be allowed to be your own trustee, you may not be the best choice. There might be someone else with more experience or time that will do a better job at handling your investments. Therefore, you can also choose an adult son or daughter, a trusted friend, or another relative.

You might also opt for a professional or corporate trustee (e.g., a bank trust department or trust company). The benefit to this is the experience and investment skills these entities offer.

Naming someone else to be co-trustee with you helps your co-trustee become familiar with your trust, allows them to learn firsthand how you want the trust to operate, and lets you evaluate their abilities. But this doesn’t mean you lose control. The trustee you name must follow the instructions in your trust and report to you. You can even replace your trustee if you change your mind.

Should I Choose a Professional or Corporate Trustee?

A professional or corporate trustee can be extremely valuable. There’s many circumstances that may lead you to consider hiring one of these entities, including if you:

  • Are elderly
  • Are widowed
  • Are in declining health with no children or other trusted relatives living nearby
  • Have other candidates that lack the time and ability to manage your trust
  • Don’t have the time, desire, or experience yourself to manage your investments
  • Have an irrevocable trust that won’t allow you to be trustee

A professional or corporate trustee has the time, experience, and resources to manage your trust and help you meet your investment goals.

The downside is that they will charge a fee to manage your trust. However, the fee is usually reasonable, especially when you consider the experience, the services provided, and the investment returns they can deliver.

Important Things to Consider

  • Honestly evaluate whether you’re the best choice to be your own trustee. Someone else might do a better job than you, especially with regard to investing your money.
  • Name someone to serve as co-trustee now. That way, it’ll eliminate the time a successor would need to get to know your trust, your accounts and property, and you beneficiaries’ needs and personalities. It would also allow you to evaluate whether the co-trustee is the right choice to manage the trust in your absence.
  • Evaluate your trustee candidates carefully and realistically.
  • Talk to more than one professional or corporate trustee if that’s what you’re considering. Compare their services, investment returns, and fees.

Serving as a trustee is a major responsibility. Choosing who will fill this role isn’t a decision to take lightly.

But you don’t have to do it alone. We can help you select, educate, and advise your trustees so they will have support and know what do to next to carry out your wishes. Give us a call today at (888) 698-3951 to set up a free consultation.