Who To Select As A Trustee?


When you die, someone is going to need to handle your #financial affairs.  For purposes of this article, we will refer to that person as your #trustee.  So, who should be your #trustee? Should it be a relative, a friend, or a bank?  It all depends.


Here are some issues to consider when selecting a #trustee.  The first matter to consider is whether the #trustee role will be long term or short term.  Here are the different phases of your #assets that need to be administered by someone other than you:


Disability - If you become disabled, this person will make sure to keep paying the household expenses as well as making investment decisions.


Death / Transition - There is a transition period ranging between 6 months to two years depending on the complexity of the estate to get the assets out of your name into the name of the appropriate recipient - either an individual or another #trust.  We will refer to this type of #trust as a “Transition Trust.”


Long term Trusts - Often donors elect to give a gift in #trust.  This is most common for minors. Obviously, you should not give a substantial amount of funds to a minor. Instead, you give it to someone to use for the benefit of a minor in #trust (what we will call a “Long Term Trust”)


The same person can be a #trustee for both the Transitional Trust and the Long Term Trust. However, special consideration should be given when selecting a long term #trustee including the relationship with the beneficiary.


It is generally a bad idea to have a child be the long term #trustee for a sibling.  While not a universal law, who wants to go to their sibling for permission to get access to their #inheritance?


A common alternative we include in our #trusts is allowing a child to elect to appoint a #trustee for their own long term trust.  In this manner, the child is sure to select someone they can work with.


Assuming in your situation, the child is not an appropriate #trustee.  We then explore the reason why. If the child is a minor, we can give the child rights to act or appoint #trustees at a given age.  You can also explore disinterested third parties or a procedure to manage friction between the child and the acting #trustee.


The #trustee will also be charge of managing the #assets.  Special issues arise when there are special #assets such as a family business or residence in which a #beneficiary lives. While beyond the scope of this article, issues of control and transition need to be carefully considered.  Will a #beneficiary living in the residence need to leave? A #trustee who works well with the #beneficiary will be in a better position to manage these issues.


One of the most important decisions you make when creating an #estate #plan is who will act as a #trustee.  A Wills and Trusts attorney can help you include processes and procedures that will enable a smoother transition and basis to handle conflict between the #trustee and the #beneficiary.

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