While your estate plan may initially consist of nothing more than a Last Will and Testament, that plan will likely grow as your family and the estate you will eventually leave behind grow. At some point, you may decide to incorporate a trust into your estate plan. If so, you will need to decide who to appoint as the Trustee of that trust. To help you choose the right Trustee, the attorneys at Wilcox Attorneys, PA offer five things to consider when choosing a Trustee.
Choosing Your Trustee
There are two types of trust: testamentary and living. A testamentary trust is created pursuant to a provision in your Will after your death while the administration of a living trust begins during your lifetime. While there are numerous specialized trusts that fit into those two broad categories, one thing that all trusts have in common is the need for a Trustee. As the Settlor (creator) of the trust, you get to appoint the Trustee. Along with taking into consideration the type and purpose of the trust, you should also think about the following things when choosing a Trustee:
- Legal and Financial Experience or Knowledge. Your Trustee is responsible for managing and investing the trust assets, making financial knowledge and experience extremely beneficial. Your Trustee is also responsible for understanding the trust terms and abiding by all relevant laws. As such, a legal background is a definite plus when considering a potential Trustee.
- Trustworthiness. Although you should not base your decision entirely on the fact that you trust someone, being trustworthy is certainly a necessary characteristic for a Trustee given that he/she will control assets held by the trust.
- Ability to Abide by Your Wishes. A Trustee is required to administer the trust and make discretionary decisions with the stated trust purpose in mind and by using the trust terms created by the Settlor. A Trustee may not agree with the purpose of a trust or may have a personal problem with a trust term; however, he/she must be able to put those personal opinions aside and fulfill the duties of the Trustee.
- Potential Conflicts. Ask yourself if you foresee any obvious conflicts if you appoint a potential Trustee to the position. For example, if the individual is a member of the family, will other family members have a problem with him/her acting as Trustee? Does the Prospective Trustee have any business dealings that might create a conflict with trust business? You cannot prevent all conflicts; however, avoid choosing a Trustee who already has a potential conflict.
- Availability and Willingness. Always discuss the position with a prospective Trustee before appointing him/her to the position. Never assume that someone is willing and able to serve as your Trustee. In addition, consider the person’s availability. If he/she already has a demanding work and/or family life, serving as your Trustee may be too much. If you are creating a testamentary trust, you may wish to focus on someone who is your age or younger and who is likely to be available to administer the trust in the future.
Are You Ready to Create a Trust?
For additional information, please sign up for one of our FREE estate planning webinars. If you are ready to add a trust to your estate plan and would like help choosing the right Trustee, contact the experienced Washington County, Fayetteville, Springdale, Rogers, Bentonville, and Northwest Arkansas trust attorneys at Wilcox Attorneys, PA by calling 479-443-0062 to schedule your appointment today.