From a spouse or child to a bank or lawyer, you have several options to consider when selecting a Trustee for your Estate. To help make your decision, here are some questions to ponder and answer.
You know how hard you have worked and the sacrifices that have been made to achieve your goals. In order to protect what you have worked for and provide for the most important people in your life, you may be counseled to put some or all of your assets into a Trust.
Once you have decided to fund a Trust as part of your succession planning, you then need to determine who can best carry out your plans. “Who do I choose as my Trustee or Trustees?” becomes a critical planning question.
Should my Trustee be my Spouse or Child?
Only you know the strengths and weaknesses of your family members, putting you in the best position to decide if your spouse or your child can appreciate a Trustee's responsibilities.
Being a Trustee creates many duties under state law. These include, but are not limited to, impartiality between the interests of the current and future Beneficiaries, properly accounting to all Beneficiaries, and prudently investing Trust funds. Trustees also face a prohibition against self-dealing.
Questions to Consider:
Should my Trustee be my Attorney, Accountant, or other Trusted Adviser?
Attorneys, accountants, and financial advisers often have a special and Trusted relationship with their clients. When looking for a person who understands a client's financial and personal goals and the person most capable of carrying out estate or other financial plans, many look no further than these Trusted professionals. However, just because an attorney, accountant, or another adviser may understand the nature of your business or your financial goals, he or she may not fully appreciate the scope of fiduciary duty or inherent risks and responsibilities of being a Trustee.
Questions to consider:
Should my Trustee be a Bank or Trust Company?
Banks and Trust companies provide professional fiduciary services and can act independently. Corporate Trustees have procedures and systems in place to manage property and invest funds in a fair and consistent manner. Choosing a professional fiduciary may reduce conflicts among family members while providing experienced and professional investment and administrative management. All fiduciaries are held to a very high standard, and this is truer for corporate fiduciaries because we are in the business of providing fiduciary services.
Questions to Consider:
What are the advantages to choosing more than one Trustee?
You may find it best to answer some of these questions by choosing one or multiple individuals to serve as Trustee alongside a Corporate Trustee. It can be helpful to have more than one Trustee in order to balance recordkeeping, investments, and other Trustee duties.
A properly drafted Trust Agreement can expressly outline the duties of the various Trustees, such as the retention of specific investments, delegation of particular duties, or removal of a Trustee. An individual co-Trustee may have a particular understanding of a Beneficiary's needs and assist the other Trustees and/or corporate Trustee in making discretionary decisions.
Choosing a Trustee is a decision that should be well reasoned, but it doesn't have to be difficult. You are in the best position to understand the responsibilities of managing the wealth that you have worked hard to attain and preserve over your lifetime. You are also best able to understand the needs and abilities of those closest to you. It is worthwhile to consider the person or people who, when working together, have the knowledge, experience, and compassion to best shape your legacy.
~ This article was written by and presents the views of our contributing adviser, Jim Ferraro is a vice president and Trust counsel in the Shreveport, La., office of Argent Trust Company.
This article was written by and presents the views of our contributing adviser, Jim Ferraro is a vice president and Trust counsel in the Shreveport, La., office of Argent Trust Company, and is brought to you by the Ronald J. Fichera Law Firm, where our mission is to provide trusted, professional legal services and strategic advice to assist our clients in their personal and business matters. Our firm is committed to delivering efficient and cost-effective legal services focusing on communication, responsiveness, and attention to detail. For more information about our services, contact us today!
As a reminder, this Blog Post is for informational purposes only and is not intended as legal or tax advice.
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