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By Linda Graham, Partner

One of the most important choices made during the trust planning process is who to name as your trustee.  Too often little consideration is given to this important decision and trustees are selected by default.  Your oldest child or closest sibling is often not the best option.  Frequently the wrong choice frequently results in misery for beneficiaries and family.

What is a Trustee?

A trustee is either an individual or organization that oversees a trust. It is important to realize that trustee you choose will protect your assets and care for them as you instruct in your trust agreement and serve the interests of the beneficiaries you name.

The effectiveness of a trust is depends on the strength of the trustee overseeing it.  The best estate planning can’t protect against an unfit trustee.  To help ensure that your beneficiaries enjoy the legacy you intend to leave behind, take the time to carefully select the right trustee.  The one who has the knowledge and fortitude to carry out your wishes and will carefully manage your assets.

Here are some important qualifications when selecting your trustee:

 

Trust & Integrity

  • Most importantly, a trustee should have the exceptional integrity.  A trustee has a legal duty to manage a trust on a beneficiary’s behalf by always acting in their best interest.  Your trustee should be someone that you trust completely.

Managerial skills

  • A trustee should be able to multi-task and manage advisers (i.e., lawyers, accountants, and investment advisers).  The job of a trustee isn’t quick or easy.  Overseeing a trust also requires a significant amount of coordination and communication with beneficiaries.

People skills

  • Trustees should have the ability to deal with the beneficiaries and all their particular needs and demands.  In addition, the person you select may end up in the middle of family squabbles over your estate.  There are frequently people who are dissatisfied with the terms and conditions of the trust. Unless the person you are considering as trustee is resilient enough to handle potential problems, you might want to reconsider your choice.

Investment knowledge

  • A trustee does not need to have advanced financial knowledge but should understand financial markets and have the ability to evaluate whether or not investments are being managed properly.

Tax and accounting skills

  • A trustee’s duties can range widely and may include paying bills and taxes and overseeing property.  Trustees also frequently need to make tax decisions for the trust and give the beneficiaries an annual accounting.

 

Speak with an attorney to discuss selecting the right trustee for you. Learn more about selecting a trustee here.

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