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How to Choose a Trustee

One of the most impactful decisions that you will make during your lifetime will be to choose a trustee to handle your assets after death. The task of protecting the capital that you set aside as a legacy will be put in the hands of your trustee. Although it’s common to choose a spouse, grown child, or close friend to take charge of your assets after death, each individual’s life varies which requires a unique look at your life circumstances. Here are some tips to consider when naming your trustee.

What is a trustee?

Your trustee’s job is to identify, gather, safeguard and distribute your trust assets to beneficiaries, according to the directions on your trust document. The duties of your trustee include paying bills and taxes, overseeing properties, distributing inheritance to beneficiaries, and properly managing investments.

Trustworthiness

Entrusting someone with the task of managing your estate is a big deal. A person that you implicitly trust will make you feel at ease and give you piece of mind that your assets will be handled exactly how you’ve imagined. Although they will be following the directions of your trust documents, things can still go awry, which is why it’s crucial to have a trusted and loyal advocate in place.

Financial education

A basic knowledge of business is helpful, but good judgment and common sense are enough to make a competent trustee. Don’t place all of your focus on their experience and expertise; if your trustee needs help, they can reach out to a professional for guidance. Ensure that the person you have chosen is not afraid to do research, ask questions, or seek help.

Conservative mindset

Take a look at how the individual handles their personal finances; this will give you insight into how they would manage your assets. A conservative pick is usually best fit for the job.

Health outlook

Consider the person’s age and health when deciding if they would be your best choice. What is the likelihood that the person will be around to manage your estate after you’re gone? Your older brother may not be the best pick as there is a high possibility that you will outlive him.

Family relationships

The last thing that you want for your family is strife and arguments after you’re gone. When choosing your trustee or trustees, consider family dynamics and how it might play out once emotions and grief are involved. You know your family best, so keep relationships in mind and remember how you want your family to get along once you’re not around anymore.

Corporate trustee

Banks, lawyers and financial services firms can be an advantageous choice to handle your estate, as they are detached and don’t stand to gain from the will. One of the most obvious benefits is that they are not only experienced, but unemotional. You will be charged a fee for their services which is well worth the piece of mind and expertise that they possess.

Co-trustees

Naming one trustee places a lot of responsibility in one person’s hands. If you have a substantial amount of assets or would feel more comfortable with more than one person handling the decision-making, then choosing two trustees might be beneficial. Be thoughtful on who would be working together to avoid disagreements. A family member and a professional could be a healthy team balance.

Revisit your decision

When you decide who you want to be in charge of your trust, it’s not set in stone for life if you change your mind. If three years down the road, your relationship changes with the individual, you can alter the name of your trustee. Circumstances change so it’s crucial to periodically evaluate your choice so that your assets aren’t left in the wrong hands.

Accepted responsibility

Handling someone’s estate after death is a big responsibility. Once you’ve decided who you would like to name as your trustee, ask them if they would be interested in the task. For you it might seem like an honor, but for some, it might seem overwhelming or unmanageable. Outline their time commitment and responsibilities so that they become more comfortable and understand what their duties will be.

 

Your trust is only as strong as your trustee. Be at ease knowing that the best candidate for the role will be there to provide for your family and give back to your favorite causes after you’re gone. Consider these tips before choosing your trustee so that you can have piece of mind that your assets will be appropriately managed when you’re gone.

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