When you set up a trust, know that your trustee may need the help of professionals to run it successfully. While professionals cost money, they can provide expertise in areas that your trust needs for its assets to grow.
Why Would the Trustee Need Professionals?
If you choose a family member trustee to run your test, he or she may have to seek out professionals for advice. If you are the trustee, the same is true. Why? You may need the following skills to manage a trust:
- Financial planning
- Real estate management
- Art or jewelry appraisals
Most non-professional trustees simply do not have all of this knowledge and expertise. Your trustee should seek out help when he or she needs it. For instance, your trust may need an accountant to handle end of year tax returns, and it might need to hire an appraiser to do a valuation of a piece of art so it can be put up for auction. If the trustee does not seek professional advice, he or she might mismanage trust assets and cause them to lose value.
Don’t Professionals Cost Money?
Yes, professionals charge for their time, and they can be expensive. If your trust has a significant need for professionals, you may discover that thousands of dollars you thought would go to beneficiaries is going to professionals instead.
If your trust will have significant assets – especially non-cash assets – you may want to rethink having a family member be your trustee. It may cost the trust less to have a professional trustee who can handle accounting, taxes, and financial planning in-house. To keep professional trustee costs down, consider using a local attorney or accountant rather than a large bank or investment house.
Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.