Choosing a Trustee
One of the most important and often difficult decisions you will make in estate planning is choosing a trustee to manage your affairs and provide for your loved ones when you become disabled or after your passing. Typically, if you have a revocable living trust, you may be your own trustee. And if you are married, you and your spouse may be co-trustees of your revocable living trust.
But when you and your spouse pass away, the question as to who will be the successor trustee can be daunting. People usually would choose an adult child, relative or a close friend. But would they be up to the task? The ones closest to us may not always be the best qualified to be your trustee.
When choosing a trustee, here are some factors to think about.
Locality: It would be ideal if your trustee lives nearby to perform his or her trustee duties efficiently, especially if real property is involved. For example, if the trustee has to sell your house, it would be better if your trustee was in the area to meet with the local real estate agent, appraiser, home inspector, etc.
Work Ethic: Being the trustee of someone’s estate can be overwhelming with the numerous tasks. Is your trustee responsible to manage your bank accounts, pay bills, maintain insurance, etc.? The person should also be honest, fair, detail-oriented, organized, dependable and a good communicator.
Ability to Use Good Judgment: Your trustee does not have to be a professional or have an MBA degree, but he or she should be business savvy and be able to use good judgment and common sense when managing the affairs of your estate. Also, this person should not be afraid to ask for help and should be sensitive to your desires and the needs of the beneficiaries.
Number of Co-Trustees: Choosing more than one trustee may be a good idea so they can help each other and not have one person bear the burden of handling the affairs alone. But you would have to consider whether the co-trustees would get along. Oftentimes, people would designate their children as co-trustees and have them serve equally. However, if you choose to go this route, consider if the children can get along and be able to make decisions without any conflict.
Availability: Is the person too busy to handle your estate or are there other aspects of his or her life that would distract him or her from managing your affairs?
Professional Corporate Trustee: Of course, you can always choose a professional who may charge more than a relative or close friend. Corporate trustees would be banks or financial service firms. If you can’t name someone qualified to serve or you foresee potential family conflict, you can avoid these problems by hiring a professional to handle the affairs.
About the Author
Christine Chung, Esq.