How to Select a Trustee for Your Estate Plan

People often ask the question: “What is a trustee and what do they do”?  Simply answered, a trustee is a person or entity responsible for the disposition of assets according to the terms of your trust.  When selecting a trustee for your estate, you must be mindful to select someone that is competent and trustworthy.  It is often the case that a person will name both an individual and an institution to serve together.

Both strengths and weaknesses are associated with professional and personal trustees.  A professional will likely have a lot of experience in the role and will be familiar with the laws and procedures surrounding the trust administration process.    Additionally, professionals are unencumbered by emotional bias and administer the trust in strict accordance with the trust instructions.

In comparison, decedents usually appoint individual trustees based on their close, personal relationship with the individual.  A personal trustee will likely know the decedent and trust beneficiaries very well and is usually the more affordable option for trust administration.  Keeping in mind both of these options, individuals often elect both a professional entity and an individual to serve as co-trustees of a trust.  Though this structure can often benefit an estate by providing both a professional and a personal element to the trust administration, it may also pose a conflict in the event the co-trustees disagree on a matter.

Always make sure that you are selecting a trustee that does not have a conflict of interest with your estate.  For example, selecting a second spouse, children from a prior marriage or an individual who owns part of your business may result in an unintended conflict of interest between the selected party and the interests of your beneficiaries.  Trustees often hold a lot of power, and it is important to select a trustee who can faithfully execute the position.

Whoever you chose as trustee, it is important to make sure that he or she is willing and able to serve in that capacity.  Service as trustee is not always an easy task, and some people may not want to take on such a big responsibility.  It is always a good idea to select a primary and a secondary choice for trustee, in the event your first choice is not able to serve.

 

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