When choosing a trustee, it is easy to trust a family member, friend, or associate with this considerable responsibility. However, trustees have obligations that go beyond being trustworthy, and possessing the right skills. From trust accounting responsibilities to having interpersonal skills, it is crucial for a trustee to fulfill their duties.
Ensuring a trust is in good hands takes effort. If there is no one to designate this role to, consider working with a private fiduciary. Learn what to look out for when choosing a trustee:
Skills to Look for When Selecting a Trustee
Choosing a trustee can be difficult due to the stress and responsibility of the position. Trustees have important duties, so it is critical to select a trustee who is equipped to take on this heavy burden.
There are several skills a trustee should possess to execute all their obligations per the trust document and per the law. Tasks such as trust accounting must be handled, and so is maintaining a rapport with beneficiaries. Skills to look out for in a trustee include:
- Financial competence: A trustee oversees the financial component of a trust, so they must have considerable fiscal competence and experience. We suggest choosing a trustee with some knowledge of investment experience, accounting experience, tax knowledge, and real estate experience.
- Administrative abilities: Ultimately, a sizable portion of trust accounting requires administrative work, which is why it is imperative to appoint a trustee with administrative abilities. A trustee should be organized enough to maintain detailed records, process and track transactions, and more.
- Interpersonal skills: Interpersonal skills are essential to selecting the right trustee. A capable trustee must work calmly and effectively with all parties. If the person designated as trustee is easily intimidated or too commanding, this can result in fractured relationships among beneficiaries, which is crucial to avoid if possible.
The above just scratches the surface. It can be hard to find someone who possesses some or all of these skills, so seeking professional fiduciary services can be a relief to trustors.
Related Article: Top Mistakes Trustees Should Avoid With Trusts
Traits to Look for When Choosing a Trustee
Selecting the right trustee extends far beyond evaluating skills. A trustee should show integrity and work well with beneficiaries because they are managing the trust. A person that exhibits strong leadership qualities is someone a trustor should consider.
Unfortunately, not everyone possesses the essential traits to take on the title of a trustee. Failure to assess a person’s character before assigning them this responsibility can have severe consequences. Below is a list of key characteristics to look for in a trustee:
- Loyalty
- Impartiality
- Good judgment
- Dedication
- Good communication
- Prudence
- Care
- Proximity to beneficiaries
- Availability
- Integrity
- Resolve
- Attention to detail
- The ability to collaborate
- Curiosity to learn more about their role
- And many more…
A trustee may not display all traits listed above but show enough traits to be trusted as the manager of this role. While many people want to choose family or someone close to them, an experienced CPA is often the best option.
Related Article: Can a Trustee Withdraw Money From an Irrevocable Trust?
Who is the Right Trustee?
The natural inclination when choosing a trustee is to select a family member or close friend with intimate knowledge of the trustor, and their values and philosophies.
Additionally, these people often have relationships with beneficiaries which could create a conflict of interest. Not only that, but confining a pool of candidates to family or close friends can be a disservice to the estate because being a trustee equires many skills to carry out complex responsibilities.
Furthermore, preexisting relationships between a trustee and beneficiaries can cause more problems than they solve. If a potential candidate’s primary vocation monopolizes the attention of administering and overseeing a trust, this person may not have the time to adequately perform or learn the role.
Selecting a professional trustee to oversee a trust is essential to preserving an estate’s assets, maintaining the peace, and ensuring that loved ones are taken care of.
Related Article: What To Consider When Choosing A Trustee
Eliminate Stress With Professional Trustee Services
Trustees have considerable responsibilities, and a trustee’s ability to execute their duties has significant consequences on the estate’s assets and on the beneficiaries. Failing to choose the right trustee can produce issues that will be difficult to solve without the trustor’s presence. When there are no clear options for a trustee, consider working with a private fiduciary.
Fortunately, with Marcia L. Campbell, trustees who take on the role can receive Riverside’s best option for trust accounting services. We possess all the skills and traits required to oversee and administer an estate. Contact us with any questions and schedule a consultation.