Choosing the Right Trustee

Choosing the Right Trustee

After determining the type of trust that works best for you and your family, the next step is choosing a trustee. This assigned individual or institution will be responsible for holding and administering assets or property with the sole purpose specified by you.

The trustee can be anyone from a trusted friend or family member to a professional trust company or attorney. The trustee can even be yourself. Regardless of who the trustee is, it is vital to pick someone who can and is willing to carry out your wishes and intentions for the trust.

Purpose of the Trust

To pick the most suitable trustee you must first consider the overall purpose of the trust. If the trust is meant to minimize probate exposure and to distribute assets to beneficiaries upon your death, you may want to name yourself the trustee, with a successor trustee in your place. This could be a close family member or friend who is privy to the subtleties of the family.

Family or Professional

When preserving wealth and offering economic support to beneficiaries, it is a reasonable choice to have a trusted friend or family member as the trustee. This person might be a suitable person to act as a legal administrator should they also have the monetary knowledge to oversee and grow the trust resources. Otherwise, an institutional trustee, such as an accountant, lawyer, or trust company might be your best option if you do not have someone that fits the friend or family role. An expert legal administrator will have the experience to deal with your trusts appropriately. Given this, a professional trustee will charge an expense to handle your trust when a relative or friend normally will not. The expense is usually determined by the level of worth of the trust resources, or potentially a fixed rate determined by the time the organization dedicates to the account.

These legal administrators, though having the knowledge and technical skills to deal with how to administer a trust, might not have the same personal connection to a family that you may be looking for. This personal connection between the trustee and beneficiaries, with the understanding of family dynamics, is important in properly handling the assets. One might also name co-trustees permitting the financially savvy trustee to deal with resource allocations, while the individual trustee oversees conveyance with the beneficiaries.

Special Needs Trusts

There are also special needs trusts. These types of trusts manage finances for a physically or mentally disabled person. The trustee of a special needs trust should understand the beneficiary’s needs and should understand in depth their disability benefits provided by the government. Finding a trustee that can do both might be difficult to find so the option of co-trustees may be the best solution for special needs trusts too.

Contact Us

When considering selections of a trust or if you would like to find out more about how to manage trusts, please contact The Innovative CPA Group by filling out our contact form.

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