08 Dec How to Choose the Right Trustee for Your Trust

Creating a trust is a thoughtful and strategic way to ensure that your assets transfer seamlessly to your beneficiaries. However, one key aspect of building a successful trust is choosing the right trustee. The trustee must safeguard your assets and uphold your wishes when distributing them. In this article, we’ll explain the role of a trustee, and list the most important factors to consider when choosing someone to fulfill that role. 

What Does a Trustee Do?

A trustee is the person in charge of managing a trust and the assets within it. If you have a living trust, you can be the trustee during your lifetime. After you pass away (or if you become incapacitated) the person you name as your successor trustee will take over the management of the trust. 

Typically, a trustee has the following duties:

• Asset Management—They must oversee and manage all of the assets in your trust, including investments and property.
• Record Keeping—The trustee must maintain accurate and detailed records of all transactions and activities relating to the trust.
• Communication—They must keep the beneficiaries informed on the trust’s status and performance, and notify them of any relevant changes.
• Decision Making—The trustee can also make informed decisions regarding your investments, distributions, and other matters that align with the trust document. 

How to Choose a Trustee: Four Important Factors to Consider

1: Availability

Managing a trust often requires a lot of time and dedication, especially if you have a lot of assets or a long list of beneficiaries. Evaluate whether or not the person you’re considering would be available and willing to fulfill the duties of a trustee. Even if it appears that they would have the time, it’s crucial that you discuss the role with them ahead of time to secure their cooperation. 

The more prepared your trustee is to handle your trust, the easier and less time-consuming the process will be. But it’s also a good idea to choose a backup trustee, just in case your first choice isn’t available when the time comes. 

2: Expertise

While family members and close friends may seem like natural choices, they most likely lack sufficient expertise. If your trust is particularly complex or if you’re worried about burdening your loved ones, you may want to consider working with a professional. Choosing a financial institution, trust company, or legal professional to administer your trust will ensure that it is managed with utmost precision and that it adheres to estate planning laws. 

3: Integrity

Your successor trustee plays a major role in ensuring that your assets end up in the right hands at the right time. It’s important to choose someone you can trust to act transparently, communicate openly with your beneficiaries, and prioritize their best interests. They also need to be willing to make tough decisions and enforce your wishes when necessary. For instance, if one beneficiary feels they deserve a bigger share, the trustee cannot legally make any changes to the inheritance. 

4: Family Dynamics

Choosing a family member or friend as trustee can cause conflicts among your loved ones. It can also make it challenging for the trustee to remain impartial when making decisions on behalf of the trust. For example, your grieving sibling may find it difficult to withhold funds from your financially irresponsible nephew, even if that’s what you wish. Consider how your choice of trustee would affect your loved ones, and whether the trustee could set aside their emotions when administering your trust.

Trust Planning in Surprise & Glendale, Arizona

Choosing a trustee is a task that should never be taken lightly. In fact, you may even want to revisit your selections every few years to ensure that they still fit your criteria. But no matter whether you need to set up a trust or review your existing documents, it’s important to consult a professional. 

The Phelps LaClair team has been helping Arizona residents with effective trust planning for over 40 years. Contact us today to schedule a free consultation at one of our many Phoenix area locations. 

 

Images used under creative commons license – commercial use (12/8/2023). Photo by Gustavo Fring on Pexels