In preparing your estate planning documents, if you have a will and a trust (which means your estate will not be probated), you will have to select a “Trustee.” The Trustee is a person you trust to oversee and manage your own and your heirs' assets and any trust-related debts and financial matters, in accordance with the specific, detailed laws governing that distribution. Many trust-makers reevaluate their choice of trustee over time. You can sign and finalize your estate documents, and change the trustee later.
A trustee is entitled to compensation whether a family member, close friend or a professional trustee, such as an attorney, accountant, trust company or corporate trustee. Some trustees may agree ahead of time to bill for a significantly reduced fee (or no fee), such as a close friend or family member who is experienced at successfully handling finances, legal details as well as interpersonal dynamics, or a professional that has worked with you and your family for years. In contrast, a trust company or corporate trustee may charge a percentage of the entire value of the trust. That said, when family dynamics between beneficiaries could be tense, it is worth the added cost to have an objective third party serve as trustee.
Alternatively, you may assign “co-trustees” — for example, a trusted professional familiar with
financial and legal matters, as well as a close friend or family member who can help navigate challenging relationship issues between beneficiaries, in an unbiased, matter-of-fact and diplomatic way, without getting pulled into various alliances.
Remember too that any difficult, litigious or disgruntled beneficiaries can make legal targets of your trustees. Your T & E attorney can set up a trust that protects your trustee(s) from frivolous legal disputes that will unnecessarily drain your trust's resources and likely permanently ruin relationships between your beneficiaries (e.g. children). For example, you can include trust provisions that reduce beneficiaries’ inheritance to $1.00, if they dispute the trust.
Your Trustee has several legal responsibilities to fulfill to oversee and distribute the assets in your Trust, for what is usually an extended period of time, including:
- Handling investments and property in the Trust;
- Paying bills on behalf of the Trust;
- Keeping an accurate accounting of all funds/assets in the Trust;
- Ensuring the Trust's taxes are filed and paid; and
- Handling nuclear and extended family dynamics that can be conflict-laden and complex.
Avoid Family Rifts and your Trust's Being Drained
by Frivolous Litigation After You're Gone
Once you have selected your Trustee(s), engage your loved ones/heirs in a facilitated conversation to discuss the thinking behind the terms of your trust, and to ensure they know their concerns are also understood and considered before you finalize the trust's terms. This is where a collaboratively trained Licensed Mental Health Professional can spare your family significant ensuring thoughtful understanding while you're planning your Trust & Estate.
Depending on the family, collaboratively trained Trusts & Estates attorneys may facilitate that conversation, and/or will invite any other collaborative professionals deemed necessary to increase clarity and trust now, to avoid later confusion, misunderstanding and misunderstanding draining your trust.
Trust-Makers always make all the final decisions regarding their trust. At the same time, Trust-Makers can thoughtfully avoid unanticipated and potentially devastating family rifts and litigation costs. Trust-Makers need to take time to thoughtfully select Trustees, and get professional help to express their own intentions and desires, while also hearing various beneficiary concerns/views, The thoughtfulness and care you invest in creating the legacy and love you leave your heirs matters!
