Although many people think of trusts as something only for the very wealthy, trusts are appropriate estate planning tools for a wide variety of estates, including those with modest assets.
If you are considering a testamentary trust (a trust that goes into effect upon your death), you may be wondering how to select a trustee. When it comes to appointing a trustee, it’s important to choose carefully. Here are a few considerations to keep in mind when deciding which person or entity should serve.
What Is the Trust’s Purpose?
Think about why you are creating the trust. The trustee’s job is to manage the trust’s assets according to the terms of the trust. For example, your trust’s primary purpose may be to ensure your minor children are cared for personally and financially. Make sure your intended trustee has the right mindset and skills to further those goals.
Is the Potential Trustee Willing?
Before appointing a trustee, make sure he or she is able and willing to serve. Acting as a trustee can be a time-consuming obligation. Never assume that someone has the time or ability to serve in this important role without talking to them first.
Check for Conflicts of Interest
In some cases, conflicts of interest develop when a trustee is also a beneficiary. Sometimes, the appointment of one child as trustee creates resentment and even suspicion among the child’s siblings. For this reason, many people choose a professional trust management company to serve as trustee.
A trustee has a fiduciary obligation to protect the trust’s assets. If the trustee misuses or steals funds, it can be difficult and sometimes impossible for the trust beneficiaries to recover the assets. Although not every trust is an ideal candidate for a professional trustee, this is one reason why some people choose to appoint a third party individual or financial institution to serve as trustee.
Minnesota Estate Planning and Probate Law Firm
Call the Minnesota probate and estate planning attorneys at Jeffrey P. Scott & Associates, LLC today our office today to learn more and to discuss your options.
This website has been prepared by Jeffrey P. Scott & Associates, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.