Choosing the Right Trustee(s)

Choosing the Right Trustee(s)

When you prepare 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 are strained in any way, it may be 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 Collaborative 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 select your Trustee(s) and before you finalize the terms of your trust, consider engaging your loved ones/heirs in a conversation facilitated by a professional.  Consult your collaboratively-trained attorney about this option, given the nature of the relationships and dynamics among your beneficiaries.

“They’ll be fine,” is what trust-makers too often say, without realizing that existing tensions are likely to persist with negative consequences.

Depending on the family, collaboratively-trained Trusts & Estates attorneys may facilitate that conversation, and/or will suggest other collaborative professionals deemed necessary to increase clarity and trust, now, to avoid later misunderstandings from draining your trust with court battles.

A collaboratively-trained T & E specialist who is also a licensed mental health professional can spare your family significant heartache and conflict, by ensuring thoughtful understanding, while you continue planning your Trust & Estate. A discussion facilitated by this skilled professional can help you express the thinking behind the terms of your trust, and ensure your beneficiaries know their concerns are also understood and considered.  Worry about having this type of conversation is relieved when a professional can help speak to your intentions and help ensure beneficiaries are heard.  Again, greater understanding and consideration now can help avoid unnecessary and all-too-common adversarial legal disputes later.

Trust-Makers always make all the final decisions regarding their trust. At the same time, only Trust-Makers can avoid unanticipated, potentially devastating family rifts and litigation costs. Trust-Makers need to take time to thoughtfully select Trustees, and to consider including professionals who can help them 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!