by Jackie Bedard
When you create a Revocable Living Trust, you must choose someone to assume the role of trustee after you die or become incapacitated. Of course, this decision is not as simple as picking a favorite uncle or eldest child. Choosing can be difficult.
You may not be especially close to your family members or even have a strained relationship. It’s not uncommon for siblings to drift far apart emotionally and feel like strangers at family gatherings.
If you are unmarried and don’t have a significant other or a close friend to name as trustee, then choosing among relatives presents a really tough problem.
The best advice for those struggling to pick someone from among family and friends as an after-death or disability trustee: “Then, choose the least evil one.” If no one seems perfect for the role, then choose the one that comes closest.
While your older sister might not be your favorite relative, she might be the most logical choice or close relative to handle your affairs compared to other relatives and friends. It’s also OK to choose a cousin with finance experience over a brother that can’t seem to keep a full-time job. Or, maybe your youngest adult child has proven himself as more responsible and reliable than your eldest child.
Duties of a Trustee
Before choosing a trustee, it’s important to note the fiduciary duties of the trustee, which include managing assets in the trust in the best interests of beneficiaries and making decisions regarding how assets are invested or released.
You will want assurances the position holder is a responsible person who will carry out your wishes, make sound judgments and seek out professional advice when necessary.
A good choice as trustee:
- is competent to handle finances and will follow the trust’s instructions;
- has adequate time and a genuine interest to take on the role; and
- will avoid family conflicts by being unbiased and unemotional when making decisions.
Consider a Professional Adviser
While typically this role is assigned to a spouse or relative, you can also name a close friend, business associate, estate planning attorney, professional adviser or a corporate fiduciary. Sometimes, co-trustees are chosen from a combination of these candidates.
Some trusts are complex or may be designed to benefit heirs for many, many years to come. Banks and trust companies are regulated by the government and can manage trusts for decades. Their advantages include:
they don’t die or become incapacitated;
they act objectively in following a trust’s instructions; and
they keep good records and have estate administration, tax and investment expertise.
Regardless of whom you choose, the basic qualities of a good trustee are the same: integrity, good judgment and objectivity.
Bedard, an elder law attorney with Carolina Family Estate Planning, can be reached at 919-443-3035 or www.carolinafep.com.