Trust & Responsibility

Having the right trustee is very important in wealth-transfer planning. Trustee selection is an important piece of the estate-planning process that too often is given minimal consideration. This is akin to forming a business entity and then paying little attention to the proper selection of corporate officers.”

Trustees have multiple responsibilities and frequently face difficult decisions when carrying out their fiduciary duties. These responsibilities include preparing trust accountings, prudent investing of trust assets, understanding and implementing the terms of the trust which often include discretionary distributions to beneficiaries.

As fiduciaries, trustees have the highest level of responsibility under the law. When performing fiduciary duties, a trustee must follow state and federal laws regarding appropriate standards of care.

Selecting the wrong trustee can be expensive and disruptive to your estate-planning goals. The decision to appoint an individual, a Licensed Professional Fiduciary or a corporate trustee requires thoughtful analysis. There are pros and cons to selecting a professional fiduciary or corporate trustee over a family member or friend. It is important to evaluate the overall goals of the trust and consider your options carefully.

Practical considerations are often just as important as legal ones. For example, might an individual trustee who is also a beneficiary feel pressure to make a distribution to another family member? Alternatively, will that same trustee be reluctant to receive a personal distribution even when appropriate?

As you choose among the various options for trustee, you may consider appointing a family member or close friend, a licensed professional fiduciary or a corporate trustee. Whatever choice you make, be sure that you have been diligent in your review and have carefully considered who would best manage your affairs should you become incapacitated and carry out your wishes as set forth in your trust document.

Ask Yourself…

• Will the candidate be able to obtain and perform investment management, accounting, tax and bookkeeping services for the trust to fulfill fiduciary responsibilities?
• Does the candidate have a good grasp of your estate plan, goals and objectives?
• Does the candidate have the experience to deal with specialized or unique trust assets?
• Will the candidate adhere to high standards and best protect the trust assets for current and future beneficiaries?
• Will the candidate make objective decisions to administer the trust and treat beneficiaries fairly?
• Will the candidate be able to act impartially between competing interests of various beneficiaries?
• Can the candidate administer the trust in the most tax-efficient manner?
• Will the candidate be able to take quick and efficient action in trust administration?