Estate planning involves several important decisions, one of the most important of these being who will serve as your trustee. For a married couple preparing a family living trust, the initial trustees are usually the surviving spouse, after the first spouse dies, unless extenuating circumstances exist. Selecting who will serve as the successor trustee, however, can be much more complicated and should be made with careful thought and consideration.
Legally speaking, the requirements for someone to serve as a trustee are fairly minimal. The individual must be at least 18 years old and competent, meaning he or she is capable of handling his or her own affairs. That threshold is not very difficult to meet, but keep in mind that this individual is being given a lot of responsibility. The level of responsibility depends greatly on the type of trust created. The most common of these is the revocable living trust, but by the time the trust is being handled by a successor trustee, the trust normally has transitioned to an irrevocable trust, which does require a higher level of responsibility and accounting.
The trustee must act responsibly and in the best interests of first, the initial trustee or creator of the document and second, the beneficiaries. For this reason, it is important that you select someone who you believe is trustworthy and fiscally responsible. While the person does not necessarily need formal legal or financial expertise, it does help if the person has some level of financial experience. If not, it does help to connect your trustee with your financial planner so that he or she can reach out to the advisor when questions arise.
The trustee should also be someone who can exercise good judgment and can make tough decisions. Beneficiaries may push back on him or her and want money before it should be distributed, and the trustee needs to be able to stand firm in his or her decisions, following the guidelines outlined in the trust document. Lastly, depending on the terms of when your beneficiaries may receive their distributions, the trust may last for an extended period of time. If that is the case, make sure your trustee is comfortable handling this responsibility for a long time. Also make sure he or she has the time and resources to dedicate to his or her responsibilities.
I often caution clients on choosing someone they feel obligated to select, whether it be family obligation or the fact someone already chose them as a trustee, too. Every client’s situation is unique, and you should choose your trustee based on your needs and wants. Do not let others sway you in making this decision. A trustee should be carefully and cautiously selected. However, always ask your trustee first whether he or she will accept the appointment prior to giving your attorney their name as trustee. The last thing you want is to surprise someone with this appointment only to have them refuse to serve as trustee later.
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.
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!