Key Considerations When Choosing a Trustee

So, you have decided to incorporate a trust into your estate plan. Great! Trusts can accomplish a number of important goals for your future and that of your loved ones. A big part of setting up your trust for success, however, is choosing the right trustee. Trustees, of course, play a huge role in trusts as they are tasked with managing the trust for the benefit of the beneficiaries and according to the terms set forth in trust documents. Be sure to select the best person for this role of great responsibility by remembering these key considerations when choosing a trustee.

Key Considerations When Choosing a Trustee

When you are choosing a trustee, there are a number of factors you should take into account to make sure you are picking the best person or entity for the job. For starters, you should remember that managing a trust takes time. Now, the amount of time needed to effectively manage a trust will depend, in large part, on the type and nature of the trust. The more assets and the more complex the assets that are held in the trust, the more likely it will consume more of a trustee’s time. Even simpler trusts can be time-consuming to manage. Consider the fact that a trustee will be responsible for things like:

  • Filing income tax returns for the trust
  • Managing and selling real estate
  • Maintaining trust property
  • Conducting appraisals of personal items held in trust
  • Keeping accurate records of trust account activity
  • Communicating with trust beneficiaries
  • Processing request for trust distributions
  • Making final decisions about trust distributions

When you are selecting a trustee, keep in mind all of the responsibilities that come with being a trustee. You might find that someone you would have wanted to act as trustee simply does not have the time to dedicate to the job. They may have other career, family, and other responsibilities that would take precedence over a trustee role.

The ability to comply with the terms of the trust is also important in a trustee. Some trust terms may be easier to meet than others. Overseeing distributions to trust beneficiaries is often one of the more difficult terms for a trustee to comply with. The terms may be specific or vague on when and under what circumstances trust distributions can be made to beneficiaries. You need a trustee who can effectively interpret when you want the trustee to allow distributions. You may also want to consider how the relationship between the trustee and beneficiaries may complicate things. For instance, if you named a family member to manage the trust for the benefit of trust beneficiaries who are also family members, it may be an uncomfortable situation of the trustee and the beneficiaries disagree as to when distributions should be made.

Depending on the nature of the trust, you may also want to consider naming a trustee with a certain level of expertise in particular fields, such as finance or accounting. A solid knowledge base in certain areas may serve the trustee well in effectively managing the trust. You may also want to consider the cost a trustee would charge to manage the trust. If you go with a professional entity to manage the trust, it may be the best choice, but it also may be more costly than going with an individual.

Estate Planning Attorneys

For all of your trust questions, you can get answers from the knowledgeable team at Jones, Gregg, Creehan & Gerace. Contact us today.