Choosing A Trusty Trustee

You have decided to establish a trust to manage your assets for your loved ones, but who should be in charge? Typically, the grantor, or the person creating the trust, serves as trustee during his or her lifetime. Upon the death or incapacity of the original trustee, a successor trustee is needed to either continue management of the trust, or to handle distribution of trust assets and trust termination. While many grantors prefer to appoint a family member or close friend to the role of successor trustee, the duties of a trustee can be quite overwhelming. As such, it is important to keep the magnitude of the trustee position in mind when making this decision. Some factors to consider when selecting a trustee include:

• Financial proficiency and ability to meticulously manage fiduciary responsibilities

• Organizational and administrative capacity

• Potential risk and legal liability

• Family dynamics

• Professional trustee or co-trustee possibilities

• Full understanding and agreement by the trustee

A trust can be a very useful tool to provide for loved ones now and in the future, avoid probate, preserve privacy, and minimize estate taxes. Selecting the proper trustee is crucial to the effective execution of a trust. For more information on what you and your trustee need to know as you work toward setting up a trust, this recent piece from MarketWatch provides some valuable insights.