Friday, July 28, 2017

Choosing A Trustee For Your Living Trust

July 28, 2009 by  
Filed under Estate Planning, Featured Content

One key choice when setting up a living trust as part of your estate plan is the Trustee.  Naming a Trustee for your living trust or any other trust that you establish for the benefit of another is probably the most important step in making sure that your wishes will be carried out completely. The job of a Trustee is to manage the assets or distribute them according to your specified plan. It is important to choose an intelligent and ethical Trustee whom you completely trust. In doing so, you can prevent problems such as these (real questions submitted by real people):

Q: I named my friend as Trustee of my living trust and now she thinks she’s a beneficiary, is this true?

Q: My parents had a living trust and named my brother as trustee. All of the assets were supposed to be divided between us but it has been 2 years and I haven’t received anything. He won’t return my phone calls and has ignored all requests for documentation. What can I do?

These kinds of situations can be prevented by planning ahead and choosing a Trustee who understands the duties and responsibilities of the position. In the situations listed above, it is clear that the Trustees do not understand their duties. A Trustee is not automatically a beneficiary unless named as one. Additionally, Trustees must read the trust instrument and follow all distribution instructions, legal notice requirements and all other fiduciary duties required by law. Sometimes it may be appropriate to name a professional fiduciary or trust company if you don’t have someone who meets these requirements. Also, a living trust may keep your assets out of probate but since it is unsupervised by the court, mismanagement may go unnoticed until it is too late. In these types of situations, avoiding probate may not be the best move. To determine whether avoiding probate by setting up a living trust is the best decision for you, talk to an experienced attorney who can analyze your personal situation.

Comments

2 Responses to “Choosing A Trustee For Your Living Trust”
  1. Legalee says:

    Often parents think they should name the oldest child as trustee. I say pick the most reponsible and honest child. The one with the best business sense. At can also be a good idea to pick co trustees

  2. One of the most under acknowledged solutions for addressing this issue is the option to list a licensed private fiduciary as your trustee. Find a fiduciary who is licensed through the state of CA (PFAC) and has ability to be bonded.

    There are far too many stories of sibling relationships being destroyed following the death of a parent. Be preventative and get a fiduciary listed as a Trustee or co-trustee to ensure that the estate is administered by a neutral party + experienced professional.

    Visit: http://www.exclusiveestateadministration.com for more info!

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