When you create a trust, one of the most important decisions you must make is who to appoint to succeed you as your trustee. Although each trust is unique, there are some basic considerations that you may wish to take into account before making a decision regarding the appointment of a trustee.
- The Purpose and Complexity of The Trust: Trusts come in numerous forms and are created for a wide variety of reasons. A trust may be rather simple, such as a trust that is created solely for the purpose of providing funds to care for a pet after the death of the maker of the trust. On the other hand, a trust may be extremely complex, such as a trust created to manage and distribute a large estate after the death of the maker. A trust with a simple purpose does not require as much from the trustee as a complex trust does.
- Location of Trust Assets: The trustee is responsible for all trust assets for the lifetime of the trust. Where the trust assets are located is an important consideration. It is sometimes helpful if the trustee is located near the assets in order to more effectively manage the assets. With today’s electronic communications, however, this is not as great a factor.
- Relationship of the Trustee to the Beneficiaries: Does the potential trustee have any financial interest in the trust itself or a direct relationship to the financial interest of a beneficiary? Does the potential trustee have an obvious or potential conflict of interest with any of the beneficiaries? If so, you may wish to reconsider selecting this potential trustee.
- Financial Ability and Experience: The trustee has numerous duties to both the assets of the trust itself and the beneficiaries. Depending on the size of the trust, managing the trust assets may require a high level of financial ability and experience. Be certain the person you appoint has the experience and the ability to handle the position or to manage the experts who will take care of the technical matters.
Keep in mind that a qualified estate administration attorney can assist your successor trustee through all the issues of administration.
Gerald Dorn is a shareholder and has been a partner at Anderson, Dorn & Rader, Ltd. Since 1998. Mr. Dorn has extensive experience serving wealthy families and business owners in the development of estate, tax and asset protection planning strategies. He made the decision to focus his practice in the area of estate planning after witnessing the personal grief and financial loss suffered by several of his clients as a result of poor planning. These experiences motivated him to dedicate his professional life to assisting his clients to preserve their life’s work for their heirs and to create a lasting legacy for those they love. Mr. Dorn is able to accomplish his mission through the use of a vast number of estate planning tools, both basic and advanced, for all of his clients at Anderson, Dorn & Rader, Ltd.
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