If you are thinking about setting up a trust or making gifts in trust, you need to begin thinking about who you will designate, other than yourself, as a trustee. Most people choose their partner or children to be their trustees. But what most people don’t realize is that they can also appoint a professional as a trustee.
Assigning a professional to be your trustee is generally a wise choice. From investments to administration, there are many things that go into managing a trust that you or a family member may not have the expertise in to do it the best way possible.
However, not everyone is comfortable with assigning someone to manage their trust. Depending on your level of comfort, here are four types of trustees that can help you out in different capacities.
- Trustee
- Co-Trustee
- Agent Trustee
- Successor Trustee
If you have additional questions, please don’t hesitate to contact us.
4 Main Types of Trustees
1. A Trustee
The most common choice for people is to assign a trustee. Professional trustees have full responsibility for managing your trust assets according to your trust instructions, making it the perfect solution for you if you do not have anyone in mind to take care of your financial affairs. Since there are family pressures and responsibilities that come with being a trustee, some people also prefer to not burden their children or spouse with the role.
2. Co-Trustee
On the other hand, some people prefer to be involved in the management of their trust. The most common reason being they are not fully comfortable with the professional trustee yet and want to evaluate their investment performance and service before making them a sole trustee. Responsibilities can be divided per your instructions but all the business transactions will require both your signature and the co-trustee before moving forward.
3. Agent Trustee
Unlike the co-trustee, the agent can be assigned more or less responsibility. For example, if you feel you can handle most of your assets on your own, you can assign the agent trustee to only manage a portion or simply provide advice in the accounting of the investments being made.
4. Successor Trustee
Lastly, you can also decide to be your own trustee (for example, of your revocable living trust), and name a successor trustee. The successor trustee would only step in and manage your trust when you can no longer act, due to incapacity or death. Many people like the idea of having a professional take care of the paperwork, tax filings, and other final details when they cannot so they don’t have to burden their family while they are grieving.
How Marcia L. Campbell CPA Can Help
As a client of Marcia L. Campbell CPA, you have the ability to choose any of the above trust management options. Depending on your personal situation, we can recommend the right type of professional trust management, so you feel your trust is protected.
For questions or to discuss working together, please contact us.