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No one enjoys thinking about what will happen after they’re gone, but we all want our families to be well cared for. Many people set up trusts to provide for their loved ones, but the trust is only as good as its trustee.
Choosing a trustee is one of the more difficult decisions in creating your estate plan. Some attorneys suggest choosing several trustees to promote checks and balances, but sometimes choosing just one trustee can be difficult in light of family relationships and other factors. Choosing a trustee is a very personal and complex decision, but here are some basic guidelines one should consider:
• Responsibility, Expertise, and Common Sense
A trustee has several duties, including a duty to preserve, protect, and grow the trust while avoiding risks and dangers. Choosing a responsible person should the primary consideration. Responsibility means having good judgment, diligence, and common sense. A trustee must always have the ability to be objective, follow instructions, and consider the best interests of all the beneficiaries.
• Age and Availability
Oftentimes, the most qualified person is either busy or in poor health. This does not mean they should not be considered if they are truly the best candidate; however, you should consider the possibility that they may not be around or able to act as trustee when the time comes. In this situation, naming several successor trustees is highly advised.
• Professional Expertise
Professional expertise is not a requirement and is not always needed, but it should be considered and is encouraged in many circumstances. A corporate fiduciary should be considered when estate tax issues are present, or if family dynamics suggest the need for an un-interested, un-biased trustee or co-trustee. Financial institutions usually charge for their services and may be perceived as impersonal, but the advantages are objectivity, longevity, expertise, and experience.
• Co-Trustees
Naming a co-trustee can provide certain checks and balances, but it can also add a layer of complication and administrative burden in administering a trust. Unless sated otherwise, co-trustees must act in concert with one another in approving actions. Naming co-trustees should be made with the goal of avoiding conflicts and easing the administrative burden, and should be done with a good understanding of the skills and abilities each co-trustee can offer.
• Re-evaluation
Reviewing, revisiting, and reevaluating your estate plan should be done often because all kinds of facts and circumstances can change. When major changes take place, such as divorce, death, new marriage, etc., you should reconsider your estate plan and revisit your choice of trustees.
At Atlanta Financial, we stand ready to help you with your questions about your estate plan, or any other aspect of your financial situation. Contact me at 678-282-0296 to arrange a complimentary Second Opinion Review.
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Atlanta, GA, December 10, 2020 – We are pleased to announce Five Star award winners Julianne F. Andrews, MBA, CFP®, AIF® and Cathy C. Miller, MBA, CFP®, CRPS®, CDFA®’s appearance in a Women in Wealth special section in the December 2020 issue of Fortune magazine. The “Women in Wealth” supplement highlights Atlanta area women who “stand out” in their industry.
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