Tips for choosing a trustee

So you want to transfer some of your assets to a trust, but you don’t know how to go about selecting a trustee?

First of all, a trust can be an incredibly flexible tool in estate planning. That versatility extends to choosing the trustee. Perhaps a grantor might have more peace of mind choosing co-trustees. Perhaps certain trustee duties will be divided differently among the trustees. Perhaps a financial advisor can handle the tax returns of the trust, while disbursements to beneficiaries will remain within the control of the trustees. 

With the help of an experienced attorney, a trust can be created with instructions that are detailed enough to convey the grantor’s intentions and explain how multiple trustees will make decisions. A lawyer can also advise against potential pitfalls in trust administration. For example, IRS rules may prohibit naming a family member as a co-trustee of certain types of trusts.

Of course, too many choices might become a double-edged sword. Although a grantor may want a trustee to make payments to beneficiaries only for certain purposes, there may also be a concern that a trustee may not be responsive to emergency requests from beneficiaries. To avoid that dilemma, a grantor may want to include instructions for how the trust beneficiaries can remove the trustee. An attorney can work with an individual to find the right balance between preserving the trustee’s control and offering beneficiaries a lifeline in the event the trustee becomes unreasonable. 

In sum, all of the above scenarios underscore the importance for choosing a trustee wisely. Our law firm focuses on estate planning and can help clients with these big decisions.

Source: American Bar Association, “Power of Attorney

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