A trust can be an invaluable addition to any estate plan; however, a trust is only as valuable as the grantor makes it. For this reason, you should use care when making important decisions relating to the trust, such as who you decide to appoint as trustee. Although you may initially lean toward appointing a family member, an independent trustee may be a better choice.
People often consider appointing a spouse or adult child as trustee because it seems the easy, logical choice. Only a family member understands your family dynamics right? That knowledge, however, may eventually be the problem. When a family member is appointed as trustee, it often creates resentment and conflict in the family. Inevitably, another family member doesn’t understand why he or she wasn’t chosen for the position. In addition, appointing a family member – particularly if he or she is also a beneficiary—may create an instant conflict of interest.
Along with creating conflict within the family, a family member may not have the requisite skill level or experience to carry out the job well. Administering a trust is often more difficult than people realize. Along with guarding and growing the assets held by the trust, the trustee must complete a significant amount of paperwork, keep beneficiaries informed of all trust business, and make sure that all taxes are current.
For these reasons, it often makes more sense to appoint an independent trustee to oversee your trust. An independent trustee is someone who has the experience and the objective viewpoint to ensure that your trust will succeed in the long term.
- Famous Estates-Champ or Chump? Nelson Mandela - September 27, 2019
- Famous Estates-Champ or Chump? Jane Fonda - September 13, 2019
- Texas Trivia – Name the first of six flags to fly over Texas. - September 6, 2019