Choosing a trustee that you can trust

Experts throughout California, on television talk shows and even in celebrity magazines will tout the importance of having an up-to-date will. A will is part of a complete and well-thought estate plan. For many, a trust is equally important.

Financial sources point out that for those with a trust, appointing the trustee is one of the key elements during estate planning. The appointed person carries the fiduciary responsibility, and should be someone who is not only up to the job, but someone who can put aside his or her personal feelings and properly honor your wishes.

There are four key considerations to keep in mind when choosing a trustee.

  1. The larger the trust, the more risky it is to choose an individual. There is no set dividing line in the worth of a trust, but ones that could extend into multiple generations may be better managed by a company or a law firm rather than an individual, who would have longevity issues.
  2. Is someone in the family available for a straightforward trust? You can save money and keep things simple by keeping it in the family. Keep in mind the ability to remain neutral or dedicated to the trust’s parameters.
  3. If the beneficiaries don’t get along, it may be wise to choose an outside trustee or a company. Everyone will more likely play fair if they feel they are being treated fairly.
  4. Look for options. Perhaps a family member and a company are co-trustees. There are many ways to set up a trust. Flexibility is a good thing.

As you are setting up your trust and choosing a trustee, keep in mind that any estate plan may be incomplete if it does not have other items such as a health care directive, power of attorney provisions and long-term care planning.

Source: The Wall Street Journal, “A Matter of Trust,” Jeanine Skowronski, Sept. 10, 2012