One of the most important tools in estate planning is the trust. To put it simply, the trust is created when the owner of property (grantor) transfers legal title of an asset to another individual (trustee). The trustee holds the asset for the benefit of a third party (beneficiary). The trustee also holds a fiduciary responsibility to the grantor and beneficiary.
The trustee has to carry out the grantor’s intention and act in the best interest of the beneficiary. It is a unique relationship that the trustee must keep in mind while carrying out their fiduciary duties.
When creating a trust, you must name a trustee that you can depend on to fulfill your instructions and act on your intentions. When seeking to name a trustee, seek responsibility, reliability, experience, and expertise. Consider the fact that they will need to communicate effectively with the beneficiaries.
Qualities that Make a Good Trustee:
- Attention to Detail
- Skilled Recordkeeper
- Experienced Investor
- Efficient Communicator
- Available to Fulfill Duties and Responsibilities of a Trustee
Before designating your trustee, ask yourself the following questions:
- Will this person be responsible in exercising the powers of the trustee?
- Will this person be reliable when dealing with trust assets and in administration of the trust?
- Do they have a good understanding of the requirements expected of a trustee?
- Will this person understand the role of the trustee? The obligations and duties of a trustee?
- Will this person understand the potential liability associated with the role?
- Is this person able to deal with a wide variety of issues from investing to filing tax returns to keeping exemplary records?
- Is this person able to communicate efficiently with beneficiaries of the trust?
- Are they able to resist pressure from beneficiaries? Act on behalf of the trust without showing favoritism amongst beneficiaries?
When creating a trust, designating the right trustee or combination of trustees is extremely important. The decision should not be taken lightly. Make sure to objectively consider the choices and choose the best combination that fulfills the needs of the job. Before the final decision is made make sure to check with them to verify their willingness to serve as a trustee.
If you need assistance creating a trust or if you need to discuss how to choose a responsible for trustee, please contact one of the experienced California estate planning attorneys at The Law Office of Janet L. Brewer.