Choosing the right trustee for your trust takes careful consideration. The trustee will manage any assets you place in trust and will hold a position of great responsibility. In California, trustees have fiduciary responsibilities to the trust beneficiaries, including the duty to make prudent investments using trust assets. Here are some important issues to think about when picking a trustee.
If you know which assets you will likely place in trust, then you can base your choice of trustee on the type of assets. For example, if you have a large stock portfolio that will go in the trust, you may want a professional trustee such as a bank that has investment advisors on staff. If you will place only real estate in trust, you may want a trustee with real estate experience. If you will place family heirlooms and sentimental items in trust, you may want a family member or trusted person such as a friend or attorney to be your trustee.
The value of assets you place in trust also should guide your choice of trustee. Often professional trustees have the experience and resources needed to manage very high value assets or many different kinds of assets. But professional trustee services can cost a lot of money depending on who you choose. If the trust assets are not generating interest or other income to pay trustee fees, it may not make financial sense to use a professional.
When considering a family member or friend as trustee, always evaluate their experience level. Has the potential trustee ever been a trustee before? Does he or she have experience managing finances or real estate? Think about your observations of how the potential trustee handles conflict, which can arise during a trust’s administration.
Trustees need to be willing to ask for help and follow the many legal requirements related to trust management. Inexperienced trustees will have to hire professionals to perform many trust functions, such as accounting, legal, investing, and property management. All of these professionals will cost the trust money.
Your trust document may specify that the trust continues to exist after you pass away. The document may explain that beneficiaries can receive payments from the trust at the trustee’s discretion. There are many other ways you can customize a trust to match your wishes. This customization can impact your choice of trustee. For example, choosing a trustee who is much older than you could mean you survive the trustee.
There are many, many factors that could affect your choice of trustee. An estate planning attorney can advise you on how and who to choose for this important role.
Planning your estate? Angela Klenk, Esq. and the team at Beach Cities Estate Law couple personalized attention to your estate plan with big law firm experience for a winning combination to give you peace of mind. To schedule a case evaluation, visit Beach Cities Estate Law online or call Angela’s office at (424) 400-2125.