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When planning your estate and choosing a trustee it’s important that you make the right decisions, but this can be challenging. After all, someone you trust with a medical decision, perhaps they’re a nurse, for example, may not be someone who you trust with financial matters, because they’re not great at handling their own money. So, naming a trustee or any person of responsibility for your estate requires plenty of thought and consideration. Today, however, we want to specifically talk a little bit about trustees and what you should consider when choosing a trustee.

Trustee: Choosing the Right Trustee When Estate Planning

Firstly, let’s briefly cover what a trustee is and what they do.

Now, a trust is a legal entity that is capable of owning or holding assets. Property that is put into a trust is owned by that legal entity until such time as the requirements set out by the person setting up the trust are met. At this point, the assets in the trust are released as directed. Yes, it sounds complicated, but it’s not. Let’s take a look at an example…

Mary has a son aged 6. Mary’s son has been talent scouted and offered a job as a child actor. He will receive compensation for his roles. Mary believes that because her son worked for the money, he should have access to it all but only once he reaches age 18. So, she sets up a trust and deposits all of the money that her son earns into that trust. The trust is set up so that once Mary’s son reaches ae 18, he will begin receiving payouts from the trust. Mary opted for smaller payouts to ensure that her son does not blow through his funds, but she did have the option to have all of the funds paid out at once.

Although funds are kept in the trust, it’s important to have someone appointed who can safeguard the funds that are in that trust. This person is called a trustee. A trustee will oversee the trust and may even invest the funds in the trust in order to earn interest or gain.

In the case of Mary, above, she may be the trustee of her son’s trust fund, however, she will want to appoint someone to take her place as trustee should she become incapacitated or die. This person will then take over control of the trust although the funds will NOT become theirs, they will simply act as a guardian of sorts.

So…

What Should You Consider When Appointing A Trustee?

Trustworthiness

It goes without saying that someone whom you appoint as a trustee should be trustworthy. This person is going to be charged with safekeeping valuable assets and you must be able to trust that they will manage the trust as you intended with honesty and integrity.

Financial Savvy

You don’t have to appoint an accountant as a trustee, but it is exceedingly helpful to appoint a trustee who is familiar with and capable of managing money well. If you don’t know anyone like this, don’t worry, there are professional services that can help! What we’re saying though is that you shouldn’t appoint uncle Bob who just got out of prison for embezzlement as the trustee.

Reliability

A trustee should also be someone who is reliable and dependable. This person is going to be needed in certain events and if they can’t be found or are “flakey” about answering their phone, you may not want to trust them to be a trustee. You may also want to consider whether a potential trustee travels a lot. If they regularly travel and fall out of touch during that time, it may not be best to choose them as your trustee. You don’t have to choose someone who is available 24-7, but you do want to choose someone who isn’t going to be unreachable for a year while they hike through the rainforests.

Someone Who Plays By the Rules

When you set up a trust, you have the option to set out specific criteria that regulate the property that has been put into that trust. It is the responsibility of your trustee to follow those rules specifically without any veering off course. For example, if you state that trust funds may not be released to your child unless they complete college and your child asks for funds before completing college, you want to be sure that your trustee is going to reiterate the rules of the trust and refuse their request.

Someone Who Knows You Well

It’s not mandatory, but it is helpful if you select a trustee that is someone who knows you well. The same applies when selecting someone to serve as the executor of your estate in your last will and testament. Occasionally, glitches or complications may arise that require your trustee to make decisions that you have not considered. In this type of situation, it’s better to have someone who knows you in charge of the trust because they will have a much better idea of what you would want them to do in the situation at hand.

Already Chosen A Trustee But Need an Estate Planning Lawyer?

If you live in or around St. Pete, Florida and have already chosen a trustee but need an estate planning lawyer to help you to set out your estate plans formally, Weidner Law can help. Just give us a call today at 727-954-8752 and arrange for a consultation so that we can discuss your estate planning attorney needs.

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