When you draw up a trust, one thing you’ll have to decide is who will oversee the trust—that is, who will be the trustee. The trustee will handle the management of the trust and can be an individual (e.g., a friend or family member), an institution (e.g., a bank or trust company), or both.
If you choose to include a trust in your estate plan, naming a trustee is one of the most important parts of the process. Even if all other details of the trust are ironed out perfectly, without a capable individual (or individuals) at the helm, all of your hard work could fall apart.
What Does A Trustee Do?
A trustee is responsible for looking after assets left by a grantor before they are distributed to beneficiaries. Commonly, the grantor of the trust will be the initial trustee (or co-trustee, if there are more than one), and will be completely in charge of his trust during his lifetime. Upon his death (or if he is otherwise rendered incapable), the management of the trust will pass to whichever person or institution is named trustee.
A trustee’s jobs are complicated and vary based on the type of assets that are left behind. For instance, if bank accounts are involved, the trustee will be responsible for overseeing the accounts. If property is involved, the trustee will be responsible for maintaining the property.
Because trustees are given such authority, it’s extremely important that a trust is as specific as possible about the grantor’s intentions. When drawing up a trust, make sure to leave no gray area in regards to which assets are left to each individual. That way, the trustee will have less room for mistakes and all beneficiaries will know that they are being treated fairly. If directions are unclear, trustees may need to seek assistance from experienced probate lawyers.
Whether you choose an institution or an individual to be your trustee, their duties will be the same. Both are recognized as legitimate in the eyes of the court and both will be given the same authority and respect from all involved parties.
Choosing Your TrusteeOne of the most important responsibilities of a trustee is to remain completely neutral and act only in terms of the beneficiaries’ best interest.Click To Tweet
AARP has compiled a list of six of the most important qualities to look for in a trustee:
- While there’s no denying that a financial background would be helpful, common sense is just as important. Make sure your trustee has a combination of book smarts and common sense.
- Be sure to choose someone who will outlive you, since your trustee must be around to execute the trust following your death.
- Choose wisely between an individual and a corporate trustee. Understand the benefits and limitations of each.
- A friend or family member can be a great choice for a trustee if the friend is capable, trustworthy, and possesses some common sense. If choosing a family member to be trustee, it’s advisable that the individual has some degree of financial or legal experience. Always, though, the most important characteristic of a good individual trustee is neutrality. A trustee must remember that his utmost responsibility is to the beneficiaries, not the grantor, and he has an obligation to carry out the trust in the way that would most aid the beneficiaries.
- Institutions are typically good choices if a grantor’s assets are worth upwards of $3.5 million, or if there are special extenuating circumstances surrounding your restate or one of your beneficiaries, for instance if one of your beneficiaries is a child with special needs. These types of situations typically require high-level expertise and know-how to insure that assets are handled professionally and in the way that will be most pleasing and favorable to all beneficiaries.
- A combination of institution/individual will make each party a co-trustee. This is a good choice because each player can keep the other in check. It’s a good way to protect against fraud and ensure that everyone stays honest and continues to look out only for the best interests of the beneficiaries.
- If you choose to name co-trustees, make sure that they will be able to work well together.
- Check back in a few years after drawing up your trust to make sure that your designated trustee is still capable and willing to carry out his duties.
With so many different options and so many different aspects to consider, choosing a trustee can be extremely complicated. That’s why it is often beneficial to have a qualified attorney by your side during the process. To ensure that everything goes smoothly while you draw up your trust and choose a trustee, contact the lawyers at Wintter & Associates today.
About the Author:
Christopher Q. Wintter is the founder of Wintter & Associates, P.A. and a board-certified expert in Trust and Estate matters by the Florida Bar. With more than 24 years’ experience as a practicing attorney, he also serves as an instructor and faculty member for the National Institute of Trial Advocacy (NITA)—the nation’s leading provider of legal advocacy skills training to practicing attorneys—and has earned the AV® Preeminent™ rating with LexisNexis Martindale Hubbell. He was also selected for inclusion in Florida Super Lawyers for 2011 and 2012 in Estate and Trust Litigation.