By Rob Simpson
Attorney, Noland, Hamerly, Etienne & Hoss
Selecting a trustee is arguably the most important decision you will make in creating a trust. Many people appoint their oldest child, or all of their children jointly, as trustee without giving it much thought. However, choosing a trustee should be well thought-out, not merely a reflexive exercise. Unlike an executor under a will, a trustee of a living trust does not by default report to the probate court (in most cases). With such broad power, an irresponsible trustee can do a lot of damage before the beneficiaries discover the damage and hold the trustee accountable by filing a lawsuit.
Selecting the right trustee requires you to understand what a trustee does. A trustee’s duties include 1) locating, identifying, and securing all of the trust’s assets, 2) valuing those assets through appraisals or other means, 3) changing title to the assets, 4) selling assets, 5) complying with the law regarding various notice requirements, 6) following the terms of the trust when dealing with debts, taxes, and distributing the trust, distributing and/or disposing of furniture and other household items, and 7) keeping a detailed records of all transactions to account for all of the trustee’s actions.
The above list of trustee duties is not exhaustive, but makes it clear that handling the administration of a trust after a death (or during a person’s incapacity) is a big job requiring certain attributes and skills. Consider the following when identifying who will serve as your trustee:
You will greatly increase the chances of a smooth trust administration after your death if you select a trustee with these traits. If you cannot identify anyone with these traits, there are trust companies and professional fiduciaries available to serve as your trustee. Also, make sure to re-evaluate your choice for trustee every few years as circumstances change.
This article is intended to address topics of general interest and should not be construed as legal advice.
© 2018 Noland, Hamerly, Etienne & Hoss