Trustee

A trust may be used to achieve numerous estate planning goals.

A Trustee is in charge of interpreting the conditions of a trust, investing the assets in the trust, making distributions from the trust, maintaining trust records, and  filing tax returns on behalf of the trust, among other responsibilities.

You will need to be attentive and discerning when selecting a Trustee. You may pick a corporate Trustee, a relative, a friend, or a professional advisor like an attorney or an accountant. When naming your Trustee, it is helpful to assess the capacity of your proposed candidate to make unbiased decisions and to determine the scope of fiscal ability. Personal Trustees frequently find they require professional assistance, which could undermine any cost-saving measures assumed by the appointment of a person without a financial or fiduciary background.

Your trust may exist for a substantial amount of time. In the event you decide on a relative as a Trustee, it is prudent to name one or more successor Trustees should the primary Trustee be unable to administer the trust for any reason.

When choosing a Trustee, it is necessary to consider whether or not your proposed choice will have adequate time to manage the trust. If there are potential disagreements between beneficiaries, diplomacy, sound judgment, and good people skills could be advantages as well. In the event that you decide on a personal friend to administer your trust, their knowledge of your family dynamics could also be helpful.

The benefits of designating a Corporate Trustee are that they already possess the knowledge and experience to manage trusts. They are well-equipped to manage trusts without bias and understand how to invest for optimal yield on the basis of the beneficiaries’ demands. A Corporate Trustee may also provide the benefit of longevity as the corporation will outlive a Personal Trustee. It is a good practice to interview potential candidates, be they personal or professional, to discuss the provisions of your trust and determine capability and compatibility between you and your beneficiaries.

Trustees generally serve for the duration of the trust. Occasionally, beneficiaries who are dissatisfied with the Trustee’s performance may remove or replace a Trustee if there is a provision in your trust to do so. The process must be carefully structured to ensure the beneficiaries themselves may not alter the letter or spirit of your trust. Designating a neutral third party to mediate these disputes may be helpful.