The choice of trustee can be a critical feature in the success or failure of an estate plan, yet clients frequently give little thought to this until their estate planning consultation. Clients often struggle with the decision between the most qualified person and the person most likely to be offended if not chosen. This conflict can lead to settling on the wrong person. When selecting a trustee, there are several things to keep in mind.
First, a trustee is responsible for the prudent management of trust assets for the benefit of the beneficiaries. This means the trustee must reasonably invest and manage the trust assets and must treat the beneficiaries with equal fairness.
Second, a trustee is responsible for the distribution of trust assets. Trust administration requires the trustee to adhere to the trust provisions, which can be straight forward or complex, depending on the type of plan. Distributing trust assets also means the trustee must work with financial institutions to liquidate and/or manage accounts, while providing an accounting to your beneficiaries. This can be time-consuming and stressful.
Finally, the trustee’s job can be difficult and requires time and the ability to perform multiple tasks. Depending on the estate, a trustee may be required to serve for years before their duties are complete.
With these considerations in mind, take your time to decide who will serve as trustee of your trust. It is wise to select someone who responsibly manages their own assets and who works well with others. Be mindful to select someone who is committed to carry out your wishes and who possesses excellent communication and multi-tasking skills. By carefully selecting your trustee, you can have the reassurance that your affairs will be properly handled after you’re gone.
Contributed by MH Phoenix Estate Planning Attorney Darren L. Richardson.
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