Deciding Which Charges to Pursue

Posted on: 4 September 2019

If you have the foresight to set up a trust for your heirs, you obviously have a lot of concern for their future financial stability and comfort. That's what makes choosing a trustee for that trust such a truly important task.

Before you make your decision, learn more about your options and what you need to consider.

What does a trustee do?

Trustees primarily manage the trust according to its terms for the benefit of those named in the trust. A trustee may hire additional people to help with the process, including financial advisors and tax advisors. If the trust is large, it isn't uncommon for this to happen — especially if the trustee is charged with investing some of the money or managing existing investments.

However, aside from the formal aspects of the trustee's job, like making sure that appropriate accounting procedures are followed, there is a human aspect to the job. You want a trustee who is capable of being appropriately responsive to the beneficiaries' requests or needs while also remaining impartial and true to the purpose of the trust.

Who can you choose as a trustee?

You generally have the following options to use as a trustee: 

• A trusted family friend 
• A family member 
• A professional advisor (like an attorney)
• A financial institution

All of these choices have their benefits and drawbacks. Choosing a friend or family member may seem like a great idea because they know your goals and your beneficiaries — but the time and energy required to manage the trust may be overwhelming to the average person. In addition, their personal feelings may make it harder for them to remain objective toward the beneficiaries. That can be problematic if a beneficiary is particularly manipulative, demanding, or has a problem like substance abuse.

A financial institution can be a good choice if you have a long history of working with that particular institution and expect the trust to be multi-generational. It may also be the best choice when there are complex investments involved. However, this is also the most impersonal choice and that could create problems if your beneficiaries' needs aren't being met in a timely fashion.

An estate planning attorney may also be a great choice for managing your trust — particularly if the attorney who creates the trust also administers them. That path is often an excellent compromise between the other choices because the attorney knows what to expect as a trustee and can provide a personal approach and familiar contact point when dealing with a beneficiary's needs.

For more information about your options and for help with estate planning, visit a site like https://www.linskylaw.com.