Choosing a Trustee for my Trust
We’re going to talk about two types of trusts today—revocable and irrevocable trusts.
A revocable trust can be modified at any time, whether you’re talking about adding or removing beneficiaries or changing how you want your assets to be managed. When setting up a revocable trust, you may designate yourself (or a spouse) as the trustee, or you might even name yourselves co-trustees. You’ll also appoint a successor trustee, who would step in when you or a co-trustee is not able to manage the trust.
Many people appoint their child (or children) as successor trustees. This is where things can get tricky.
See, you may know exactly how you want to divide your assets and to whom they should be given—but given the complexity of family dynamics (particularly when money is involved)—such an arrangement can cause a great deal of strife between the appointed successor trustees and other surviving trust beneficiaries.
Only you know your family dynamic, but in most cases, I recommend appointing a successor trustee who is a family member and a co-trustee who is a “professional trustee.” A professional trustee knows the legal elements of executing a trust, and can serve as an impartial arbitrator when it comes to dealing with sensitive issues related to the trust and interfamily dynamics.
With the exception of extremely rare cases, the terms of an irrevocable trust are made permanent the moment the trust is created. Since the terms of your trust will not be modified later, I recommend designating a family member and a professional trustee as co-trustees from the start. This simple step can ensure that the trust is administered correctly and any uncomfortable family dynamics are minimized.
Contact us to learn more about trusts and their many uses and applications.