Selecting a trustee to handle your estate is no easy task. Considering the level of responsibility that goes together with being appointed as trustee, the selection of who will handle this job duty should be one that is given a lot of thought and consideration.
For the most part, the clients (also known as the settlors of the document) creating a revocable living trust are the trust’s first trustees. However, once the settlors are either incapacitated or are deceased, the successor trustee then steps in to handle the trust property.
The trustee holds what is known as a fiduciary duty to the beneficiaries of your trust. Usually this list includes the settlors themselves, their children, their grandchildren, and other family members. This fiduciary duty includes a duty of loyalty and prudence. Loyalty requires the trustee to handle assets within the trust only in the best interests of the beneficiaries. Prudence requires the trustee to follow reasonable care when handling the trust property. The trustee is also charged with the duty to not comingle funds within the trust with his or her own personal funds and to account for and inform the beneficiaries regarding how the trust is doing. The trustee is to also behave in a manner that is impartial and fair to all beneficiaries, meaning he or she cannot show favoritism to one beneficiary over the other in dealings with trust assets.
The trustee technically holds legal title to all trust property while the beneficiaries hold equitable title. Therefore, this power gives the trustee the ability to administer, invest, and distribute the funds in the trust. If a client has minor children, the trustee’s jobs usually involve investing the money appropriately so that it grows and is available to the children when they reach a certain age.
The trustee needs to be someone the settlors trust (pun intended) with their livelihood. They need to be able to trust that this person can make wise and prudent financial decisions both during the lives and subsequent incapacity of the settlors, as well as after their deaths. If you are considering someone as a potential trustee, it is important you discuss this idea with the candidate so that he or she truly understands what all is entailed. Trustees are always able to later change their minds if necessary and resign from the position, but this normally requires the approval of the beneficiaries and is not as easy as simply walking away. Additionally, unless a second successor trustee is listed, the beneficiaries will need to elect someone to step in and resume duties, or a probate court may need to appoint one. Therefore, the decision to appoint, as well as accept the appointment, is one that should not be taken lightly.
At Sullivan Law, we offer estate planning packages at a flat and reasonable fee. We also offer free consultations to discuss what your needs are, what you would like to do, and how that can be best accomplished. Everyone’s needs are different, and your wishes should be clearly listed and understood. Sullivan Law is also a provider law firm through the Hyatt Legal Plan and regularly helps clients employed by many of the regional companies in the Greater Detroit area.
Call us at 248.917.1351 or email at asullivan@sullivanlawonline.com to schedule your free consultation today. We look forward to working with you!