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Putting a Square Peg in a Square Hole: How to Select the Right Trustee

On Behalf of | Jul 5, 2012 | Estate Planning

After careful consideration and counsel, you have chosen to take advantage of the myriad of benefits a trust can provide you. The hard part is over, right? Not exactly. Often we find that deciding on who will serve as initial or successor trustee for your trust can be just as difficult as or more difficult than choosing to put your assets into trust. Comparing the following list of characteristics to your pool of potential trustees may help you select the right trustee:

Five Characteristics of an Ideal Trustee
1. Competent. A competent trustee understands the nature of the trust’s assets and how to manage them effectively to maximize the benefit to the trust’s beneficiaries. In addition, a competent trustee understands the nature of his or her duties and can recognize the limits of his or her knowledge and when to seek professional assistance.

2. Knowledgeable. An ideal trustee is knowledgeable about your objectives and the beneficiaries’ needs. In order to effectively carry out your intent, a trustee must understand your objectives in creating the trust. These objectives may include your priorities for distributing funds from the trust (i.e. a child’s health and education may take priority over other needs).

3. Available. An ideal trustee is available to manage the trust’s assets and to stay attentive to the trust’s beneficiaries’ needs. An otherwise perfect candidate as trustee for your Texas trust may live in Maine and therefore, he or she may be unable to effectively manage local trust assets or effectively attend to the needs of local beneficiaries.

4. Best Interest of the Beneficiaries. A trustee must make all of his or her decisions regarding the trust with the best interests of the trust’s beneficiaries as his or her only objective. This may be difficult for some potential trustees because of a conflict of interest (i.e. the trustee is also president of a company that is owned by the trust), or it may be difficult for him or her to serve because it requires the emotional strength and objectivity to make best interests decisions that may be unpopular.

5. Willing. An ideal trustee is willing to serve. A trustee’s duties can be very time-consuming and may last for an extended period of time. Therefore, an ideal trustee is willing to put in the time necessary to effectively manage the trust and is willing to serve for as long as he or she needs to serve in order to carry out your intent. In addition, many trusts are created with the beneficiaries becoming trustees upon reaching a certain age. This may require the original trustee to be willing to serve as a mentor to a beneficiary for a term while the beneficiary is serving as co-trustee.

Conclusion
The selection of a trustee requires the consideration of many factors. Careful selection of the right trustee will help you accomplish your trust’s goals and ensure your legacy is carried out in a manner that maximizes the benefits to your beneficiaries while minimizing any conflicts or complications associated with your estate. If you have any questions about your trustee selection or overall estate plan, we would encourage you to call or schedule an appointment to visit with us.