Trusts can be an excellent way to provide for your heirs or for causes that matter to you while also protecting the beneficiaries from onerous taxes or potentially controlling how the funds are distributed and spent. One important step in creating the Trust that best serves the needs of your loved ones is choosing the person you wish to serve as Trustee. Depending on the type of Trust you create, the Trustee will make important decisions about how to invest the Trust’s assets and how best to distribute them, so choosing the right person is critical.
The person you choose as Trustee doesn’t need to be a financial expert to be capable. It’s more important to find someone who understands the basics of sound investing strategies, but who also knows when to call in an expert in law or accounting or finance for support when they find themselves out of their depth. And most importantly, choose someone who is very trustworthy.
If you’re creating a Trust that you want to live on after you do, be sure that you choose someone who will likely be alive and capable after you die. Additionally, be sure to choose someone who will have the time to dedicate to looking after the Trust’s assets personally, and who won’t be forced to hand the task off to someone else who is not of your choosing.
Your first instinct may be to select a child or sibling to serve as your Trustee, since you know and trust them. While this might work for some Trusts and families, you should know about the risks involved in such a choice. Relatives may not be able to look at a decision objectively, due to their proximity to the family. Likewise, the relatives who weren’t chosen to serve as Trustee may feel hurt and resentful that they weren’t selected, and may be more likely to second-guess the decisions of the person chosen than they would those of an outsider. Consider someone who is familiar with your family and its needs, but who can remain objective in making difficult decisions.
If you are in need of guidance in creating an estate plan that best serves the needs of you and your heirs, contact us for a consultation at (253) 858-5434. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.