Though once used almost exclusively by wealthy families, trust agreements have become an increasingly popular addition to any comprehensive estate plan over the last several decades. If you plan to include a testamentary trust in your estate plan one of the most important decisions you will make when creating your trust agreement is who to appoint as the Trustee of youtestamentary trust. All too often people simply appoint a spouse, family member, of close friend without considering if the person is actually the best choice or not. Ultimately, the decision is yours, and yours alone, to make; however, there are a number of factors you should take into consideration when making the decision, including:
- Purpose of the trust – the job of a Trustee is to manage trust assets and administer the trust terms. Therefore, it makes sense to appoint a Trustee whose abilities and know-how are a good fit with the intended purpose of trust. If the trust is a charitable trust you need a Trustee who is familiar with charitable gifting, for example.
- Financial acumen – one major goal of any trust is to manage, and hopefully grow, the trust assets. To do this, the Trustee needs financial skills and acumen. The larger and more valuable the trust, and the more discretion the Trustee has, the more important financial acumen will be.
- Legal knowledge – a trust agreement is a separate legal entity. As such, the Trustee must understand the laws that apply to the trust itself as well as to the distribution of trust assets.
- Availability – administering a trust agreement can take up a significant amount of the Trustee’s time. Administering a complex trust can be a full-time job for the Trustee. Make sure the Trustee you appoint has the time available do devote to the position.
- Willingness – never assume that someone is willing to serve as your Trustee. Always sit down and discuss the position first to make sure your intended Trustee is willing to serve as your Trustee.
- Conflicts of interest – sometimes appointing a family member creates unnecessary conflicts of interest if the beneficiaries are also family members. Imagine, the possible rifts you could create in your family if you appoint one child as the Trustee when all your children are beneficiaries or you appoint a sibling as Trustee when your nieces and nephews are beneficiaries along with your own children.
Often, it makes more sense to appoint a professional Trustee after you consider all of the factors that should go into choosing a Trustee for your testamentary trust. If you have additional questions or concerns about your testamentary trust and/or appointing a Trustee for your trust, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.
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