An important detail of creating a living trust is to ensure that you name a successor trustee. Without a trustee in place, you could be leaving it in the hands of a court to decide what happens to your living trust if you are incapacitated. Here are some things that need to be considered when selecting your successor trustee:
What Is a Successor Trustee?
A living trust is created to help avoid probate. Your assets are transferred to and administered through the trust. If the event that you become incapacitated and are unable to manage the trust, the successor trustee will take over.
Depending on the assets involved in the trust, the trustee could be left with the responsibility of investing, paying bills, and assisting relatives financially. Once you die, the trustee will have to work with your executor to carry out the wishes of your will. The trustee will also have to ensure that your final taxes are paid off.
It is possible that you can have the same person serve as your trustee and the executor of your estate. If you do, it is important that you ensure you have a secondary person named in case your first choice cannot serve.
Can You Choose a Family Member or Friend?
Your successor trustee can be anyone that you choose. When you are making the choice, it is important that you pick the person who is most qualified. Do not let loyalty to certain family members sway your decision. Remember, the person you are choosing will be responsible for controlling your assets if you are unable to.
The person you select must have the time needed to settle your affairs. Depending on the size the trust, it could take a few weeks or longer. You also need someone who is willing to take the amount of compensation that you are offering for the work performed. Ensure the person knows that the fee paid to him or her needs to be independent of the trust so there is no confusion or accusations of cheating later.
Can a Company Serve as Trustee?
If you are leery about having a family member or friend manage your assets, you can contract with a company to serve as your trustee. A professional trustee will understand how to invest your money, keep good records, and make decisions based solely on what is best from a financial standpoint.
Estate planning is complex, but with the help of an estate planning attorney, such as Lisa Cappolella Attorney at Law, your final wishes will be honored.Share