If and when you decide to create a trust, there are a lot of decisions that go into properly protecting your assets. One of the most crucial is picking the right person to serve as your trustee.
Taking on the role of trustee can be a difficult job and comes with duties that include making investments, paying bills, and preparing tax returns. This choice can mean the difference between a peaceful and organized handling of your estate, or one that’s messy and filled with hostility. When making this decision, it’s important to ask yourself a few key questions.
Are They Trustworthy?
When making your selection, you should first ask yourself if the trustee is well, trustworthy. Oftentimes people will select a family member, but just because they’re connected by blood doesn’t mean they’re the right person for the job.
You need to ask yourself if your prospective trustee can separate his or her personal feelings and interests while exercising good judgment at all times. It’s also important to figure out if that person can treat all the beneficiaries impartially. If the answer is no, then they’re probably not the right person for the job.
Do They Have Good Judgement?
The trustee has a duty to manage the trust in the beneficiaries’ best interest. While the trustee does not need legal or financial expertise, they should have good judgment.
It’s ideal to pick someone who is familiar with the basics of investing. Your trustee doesn’t have to be a financial expert, but they should be comfortable working with someone like an investment advisor. This will ensure they make the right financial decisions for all beneficiaries involved.
Do They Have the Ability to Make Tough Decisions?
Trustees are often asked to make difficult personal decisions, and it’s necessary to choose someone who has the ability to say “no” if the request does not benefit the trust.
The trustee must also be able to manage the trust for an extended period. Your trustee should be someone who has the time to carry out their duties. Remember, administering a trust involves responsibilities like filing tax returns, issuing regular statements, and keeping records of the activity of trust accounts.
Should You Consider Co-Trustees?
While being a trustee is a big responsibility, there are ways to make it less stressful. One of those options is implementing co-trustees. Selecting both a reliable family member and hiring a trusted professional fiduciary who can work together, can make the process easier. This allows the co-trustees to work together and make decisions that will best serve the trust and its beneficiaries.
Do you have questions about the responsibilities of a trustee?
At Marcia L. Campbell, CPA we act as trusted professional fiduciaries for many of our clients. As licensed professionals, we understand the importance of knowing that your trust, estate, or conservatorship is being managed legally, ethically, and accurately. We act as caring and objective fiduciaries and client advocates.
If you need help, please contact us by filling out our Contact Form or by giving our office a call at +1(951)686-3608.