May 25th

Key Considerations for a Trustee

There are a significant amount of considerations to take into account when establishing a trustee for your estate.

In the case of a living trust, you may play all the roles of trustor, trustee, and beneficiary. In the event of your death, or in preparation for a time in your life when you no longer wish to (or feel like you can) carry responsibility for the estate, the trust becomes a necessary agreement to pass these responsibilities to a trustee to oversee your assets, ensuring they are managed and distributed according to your intentions. Your trust will likely far outlast you, and it is important to place the right person in charge of important decisions regarding your estate. A trustee takes on legal responsibility for your assets and carries fiduciary responsibility for proper management of the assets and fulfilling your intent for, and provisions within, the trust. This constitutes many important and detail-oriented duties from proper record keeping to diligent tax administration, to official asset consolidation, titling, management and discretionary distribution.

When selecting a trustee, it’s important to remember that the trustee can be sued by interested parties if it’s felt that they have breached their duty of care. From holistic asset management to meticulous record-keeping, their charge is serious and the trustee you select should be a character of high honesty and integrity, organized, and a great communicator with a sophisticated understanding of all wealth management pillars. It’s not uncommon for a trustor to select a family member or someone close to the family who checks all the boxes, but this can be a full-time effort with many looming situations that can test objectivity. Individuals can certainly be up to the test, but it may be more prudent to solicit the services of an institutional trustee. Inquire about their proven track record, account loads, and the size and expertise of their staff. An institutional trustee can help significantly in taking the burden off the family, help your trust actually reduce the cost of outside services, and ensure long term stability through many generations.

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