Posts Categorized: Trustee

When you create a trust, choosing a trustee is one of the most important decisions you will make. If you create a revocable living trust – that is, a trust that you establish during your lifetime and can revoke or amend – you may opt to act as trustee for your trust, retaining the full control over and benefit of the money and property it holds. However, what happens if you develop a health issue or are injured in a car accident and are unable to manage your own affairs? With today’s longer life expectancies, it is much more likely that you will experience dementia in your later years, making it impossible for you to handle your own finances. And what will happen when you pass away? It is crucial that you name a successor trustee (and an alternate in case the first successor is unable or unwilling to serve) who will step into the role of trustee to manage the trust on your behalf if you become incapacitated or die. 

There are certain characteristics you should look for in any trustee. They should be trustworthy and responsible, capable of making wise financial or investment decisions, and interested in carrying out your wishes as expressed in your trust document. Depending on your particular circumstances, it may be prudent to name different trustees to serve at your incapacity and at your death. On the other hand, some may prefer to have the same trustee serve in the event of both incapacity and death. READ MORE

When creating a trust, it is common to name yourself as the initial trustee who is responsible for all aspects of administering the trust. However, when considering who will take over when you can no longer act (either because of illness or death), it is sometimes helpful to divide the responsibilities between two or more successor trustees. For example, you may decide to have one trustee who manages the accounts and property held by the trust and another trustee who makes decisions about distributions to the trust’s beneficiaries. There are some important reasons why you may want your trust document to bifurcate the trustees’ duties in this way.

Benefit from specialized knowledge or aptitudes. Trustees have a variety of duties and responsibilities in administering a trust, and it is sometimes beneficial to divide them up between more than one trustee based upon the expertise or skills needed to perform a particular aspect of the trust’s administration. For example, if your sister-in-law is knowledgeable about investments and experienced in making financial decisions, but is not as skilled at handling potentially difficult interpersonal interactions, it may be beneficial to name her as your investment trustee, which is a trustee whose sole duty is to make discretionary decisions about the investment of funds held by the trust.  READ MORE

Although every Trust is different, serving as a Trustee comes with a few core requirements: managing assets held in the name of the Trust, accounting for those assets, and following the terms of the Trust regarding distributions of income and/or principal to the beneficiaries of the Trust. 

Remember, a Trust is simply an agreement between the grantor and the distribution of assets. The Trust agreement directs distribution to a Trustee to hold and manage the assets “inside the Trust” for the benefit of the beneficiaries. READ MORE

When you form a trust as part of your estate plan, one of the most important decisions you will make is who will oversee the trust’s management when you are no longer able to manage it (also known as your successor trustee). Because a trustee’s work may be time-consuming, complicated, and risk liability, many people who create a trust consider naming a professional fiduciary as their trustee. Keep in mind that if you ask your estate planning attorney to serve as your successor trustee, you should ask for a separate engagement letter from the one you sign engaging them to create your estate plan. When looking to hire a professional to serve as your trustee, the following are several red flags you should keep in mind.

A professional’s agreement to act as your trustee does not guarantee that they have the resources needed to administer your trust properly. Be proactive about asking questions. Trust administration is an important job, and you should satisfy yourself that the person you appoint as your trustee is well-equipped to fulfill the role. READ MORE

Everyone knows what a marriage is, but not everyone knows what a domestic partnership is. To answer whether domestic partners have the same estate planning rights as married spouses, it is helpful to define what a domestic partnership is.

A domestic partnership is an alternative to marriage created for same-sex couples who could not legally marry. However, when the US Supreme Court legalized same-sex marriage in 2015 in Obergefell v. Hodges, marriage became an option for same-sex couples. A domestic partnership is not just for same-sex couples; any couple can choose this status when marriage is not something they desire, for whatever reason. READ MORE