As Lila Wittig-Graser’s article confirms, it is not always easy to choose the trustee under a trust to be administered after your death.
It shouldn’t be. A trustee is charged with managing and distributing your assets, as directed in your trust, often for several years.
He or she owes fiduciary duties to the trust beneficiaries, the violation of which may subject him to civil or even criminal sanctions.
Many people’s first thought is to name as trustee (aside from a spouse) a valued family friend. “After all,” the rationale goes, “my friend knows and loves me and my family.”
Friendship alone, however, should not determine who is or is not a trustee of your trust.
A trust’s administration, and the distribution of a deceased’s assets according to his trust, require organization, attention to detail and more than a rudimentary knowledge of finances.
Many trusts, for example, hold part or all of a child’s share until he or she reaches a certain age. In the interim, the trustee may pay amounts to or for such child for the child’s health, education and welfare.
A trustee in this situation must be able to differentiate between beneficiary requests which are and are not allowable under the trust. He or she must also be competent to maintain and oversee, often for several years, the substantial sums in the trust itself.
Moreover, although trustees commonly work with estate attorneys, a trustee must be able to:
- Establish/maintain trust bank accounts
- Collect, liquidate (if appropriate), and keep records of all trust assets
- Invest trust assets
- Transfer assets to beneficiaries when and as directed by the trust
- Respond to inquiries/objections regarding the trust
- Notify beneficiaries of trust activities
- Prepare regular trust accountings
- Meet tax and other deadlines
- Make tax and related filings and, if appropriate, appear in court
It may be that your best friend would be an appropriate trustee.
Not because he or she is your friend, but because he or she can, with the trust’s attorney’s help, ethically and competently perform the duties which the trust requires.
If so, appoint him or her. If not, find a qualified person or entity for the job. Banks often are trustees for larger trusts.
Your FOS attorney can evaluate potential trustee candidates with you.