PROFESSIONAL TRUSTEE, OR FAMILY AND FRIENDS – WHAT’S THE BEST CHOICE?
Choosing a trustee is one of the most important decisions you will undertake when setting up your trust, and it’s often one of the most difficult. There are many things to consider, and each situation is different, so it’s important to talk through your goals and intricacies with a competent estate planning attorney before you settle on your choice of trustee.
Click here for more information on setting up a trust as part of your estate plan.
What kind of trust are you establishing?
The first thing you need to consider is the type of trust you are establishing.
If the trust will be temporary, say only in effect during the time of a health issue, then choosing a family member or friend to act as trustee may be the best plan. This could also be true if the trust will only exist for a few years until a child reaches the age of maturity.
If you are setting up a lifetime trust, however, you may want to consider a corporate trustee. With the length of time involved and the many things that can change throughout the course of a lifetime trust may be more responsibility than can be reasonably requested of a non-professional.
Click here for a guide to basic estate planning.
What skills are needed to manage the assets you will place in your trust?
Depending on the size of the trust, the skills needed to manage the trust asset may be outside the capabilities of your friend or family member. You are setting up a trust to provide for an individual and want to make sure the assets are well handled. For a trust of some size that you want to last a good while, choosing a professional trustee might be a prudent decision.
What will the value of your trust be?
It is likely that the Court will require that the Trustee obtain a personal bond to protect the trust assets. The amount of the bond will depend on the size of the trust. If your trust is large, individual friends and relatives may not qualify for the high dollar bond required.
Do you lack close family members or friends that fit the requirements?
If you or the beneficiary do not have close family members that would be comfortable taking on the responsibilities of a trustee, especially for someone they do not know well, appointing them as trustee is a lot to ask. You need a trustee that is focused on managing the assets you place in trust for the benefit of the beneficiary and who is willing to remain focused on that goal for the duration of the trust. It’s not a one-time favor, it’s an on-going duty that can be quite weighty. Be sure the trustee you choose has the time and inclination to dedicate themselves to the task.
Click here for more information on protecting your children through estate planning.
Do your family members or friends lack the level of responsibility necessary to administer a trust?
We love our families, but we also know that different people have different proclivities with regard to being responsible with money and other assets. You may love your brother, but if he can’t hang on to his own money, or acts irresponsibly in taking care of his own business affairs, it’s probably a bad idea to put him in charge of the assets of your trust. You can’t make the call on who should handle the trust assets based on whether or not you like or even love someone. You have to choose a trustee that can be counted on to be responsible for the trust funds no matter what is going on in their own life. Often the best choice is an unrelated professional trustee. The position of Trustee is very powerful, and choosing the proper trustee is a decision to make carefully.
Click here to learn about who has the most power and control in a trust.
Do you have someone who knows your beneficiary and their needs as well as you do?
You may have wonderful family members and friends, but if they do not know your beneficiary well, especially in the case of a special needs child or adult, they cannot be expected to know what the proper decisions are for their care and well-being. Even if they know your beneficiary well, if they are not well-versed in the types of care, treatments, equipment, professional support, or other needs, this burden should probably be shifted to a professional who is trained to make sure your beneficiary is supported the way they need to be.
Click here to learn more about Special Needs Trusts in Georgia.
Do you have unique assets you want to place in your trust?
If all you’re dealing with in your trust is a bank account, managing the trust may not be too difficult. If, however, your trust contains not just cash, but stocks and bonds, cryptocurrency, real estate, a business, or other more varied assets, you are asking a lot of a non-professional to try to keep up with and manage multiple types of assets they may never have dealt with before. Finding a professional who can handle the types of assets you will be including in your trust could be the best decision you will make.
Click here to learn more about the pros and cons of putting your house in a trust.
Are you concerned with burdening your family and friends with the administration of your trust?
Even under perfect circumstances, asking a family member or friend to be your trustee is a lot. It will take their time, skills, dedication, and determination to properly manage your trust assets to benefit and preserve a safe and secure future for your beneficiary– a beneficiary that was not initially their responsibility. You need to think through what burden you are asking them to take on and have a frank discussion with them to see if they are willing to take it on.
Additional burden can be created when family dynamics are such that different family members become irritated or jealous that one was picked over another. Choosing a professional trustee will help to avoid these issues and keep the family peaceful.
Other considerations…
One of the main reasons people may choose a family member or friend over a professional is cost. While your family member or friend may have the skillset needed to manage the trust, chances are you are essentially asking them to take on a side job for free. Do they have the time and willingness to do that? Even people who are deeply connected to your beneficiary and love them very much, may not have the knowledge and understanding to be able to navigate the intricacies of what that beneficiary may need at any point. Are they sufficiently connected to your beneficiary to manage the trust in the beneficiary’s best interests? If so, that’s wonderful. But if not, the cost of a professional trustee may be the best investment you could make.
Who should you choose as your Trustee?
Choosing a trustee can depend on a lot of different things. To help determine the best choice for your particular situation, contact the estate planning professionals at Siedentopf Law. Don’t make these important decisions without the guidance of estate planning professionals. Call the experts at Siedentopf Law today to secure your family’s tomorrow. Schedule a phone or video consultation with Siedentopf Law today.