Choosing the Right Trustee

Choosing the Right Trustee When you’re establishing a trust, it is necessary for you to name someone as your trustee. A trustee, or executor, is a person that you are comfortable with appointing as an agent to manage your financial affairs. This can include collecting your income, paying your taxes and your bills, investing your finances, buying and selling assets, providing for your loved ones and keeping accurate records. This a person you trust to keep your finances organized and in good order. Important Notes 1. You can be the executor of your own revocable living trust. Your spouse can be a co-executor 2. It is unlikely that you will find an irrevocable trust that allows you to be the agent 3. It may not be the best choice to name yourself as your own agent, even though you can do so 4. Other options for an executor include an adult child, a trusted friend, or a professional agent. 5. Naming a co-trustee allows you to help that person become familiar with your trust, how you wish it to operate, and has the added benefit of allowing you to evaluate their abilities Who Can Be My Trustee? If your trust is a revocable living trust, you can name yourself as the agent. Your spouse is also eligible to be your co-executor which offers the benefit of uninterrupted financial affairs in the unfortunate event of serious injury or death. It’s common for married couples, especially those with a long-term marriage, to be co-executors. You are not required to be your own agent. Some prefer to choose an adult child, trusted friend, or another relative. Some prefer to utilize the experience and skill of a professional executor (such as a bank trust department or a trust company). Naming someone else the agent or as your co-executor does not mean loss of control over your finances. Your agent must follow your instructions regarding your trust, and they must report to you. You are at any time free to replace your fiduciary should you be unhappy with your choice. Why Would I Use a Professional Trustee? For those who are elderly, have no children or trusted relatives, and/or are in declining health a professional agent may be preferential. You may not be able or willing to manage your own trust, and may not have another candidate that you feel is up to the task. Some irrevocable trusts, additionally, do not allow you to be your own trustee. A professional steward offers the benefit of experience, time, and resources to help you manage your financial goals. Be aware that a professional trustee will charge you a fee to manage your trust – but this fee is often reasonable considering the service provided. What Should I Consider When Choosing? 1. Take the time to consider whether or not you are the best choice for your own executor. Another person or a company may be better qualified and have more experience managing finances appropriately. 2. You should name your co-trustee now. Doing so will help your successor immediately start familiarizing themselves with your trust, assets, and your needs. This will also offer you the opportunity to evaluate them as a trustee. 3. Evaluate all of your potential candidates realistically. 4. If you have chosen to go with a professional executor, speak with several and evaluate them prior to making your choice. Compare services, fees, and investment returns. Call The Law Center at 303-991-5200 today to schedule a free initial consultation to discuss your planning needs! : The Law Center PC