New York Estate Planning & Elder Law Blog
If you decide to establish a trust, you will likely need to select someone to make sure that the trust is administered in accordance with your wishes. A trustee is a person who assumes the position of managing a trust’s assets. The regulations to which the trustee must comply are contained in the terms of the trust. While trustees are often the trust’s creator when the trust is formed, trustees can also be the beneficiary of a trust. Following the death or incapacity of the trust’s creator, a person or institution is named as the successor trustee to manage the trust’s assets. The person or entity named in a trust as a successor trustee should also be carefully appointed because an unreliable trustee can both mismanage and waste assets. Also, because trustees have substantial powers, a risk exists that an incorrect trustee might end up harming a beneficiary. While selecting a trustee is a critical aspect of estate planning, too many people appoint a trustee without sufficient planning or thought. As a result, this article reviews some important qualities to look for when selecting a trustee.
# 1 – The Ability to Perform the Job
To successfully administer and manage a trust, trustees must be capable of performing various tasks. These individuals must have an understanding of both trust terms as well as the applicable law. Trustees should also know how to successfully manage assets as well as be able to diplomatically deal with beneficiaries. While a trustee does not need experience with areas like finance or trust management, whoever is appointed as trustee should be able to show financial responsibility as well as successfully resolve matters with others. The person appointed as trustee should also be able to make ethical decisions and act in the best interest of the trust creator and beneficiaries.
# 2 – Impartiality
A trustee has a fiduciary duty to the trust’s beneficiary, which means that the trustee must act with the best interests of the beneficiaries of mind and not favor one beneficiary over another or engage in self-serving actions. Many older parents decide to appoint a child as trustee. While appointing a child to act in such a role can be a good idea, it can also cause conflict within families if the trustee is unable to act impartially.
# 3 – Willingness to Act as a Trustee
Acting as a trustee is an often unacknowledged and thankless position. As a result, it is important to make sure to appoint someone who is willing to perform the necessary tasks to administer your estate. If a trustee ends up feeling over-burned and loses interest in performing the tasks necessary for trust administration, the odds of your trust failing will increase substantially.
Speak with an Experienced Elder Law Attorney
If you need help selecting a trustee or navigating any other aspect of the estate planning process, it can help to obtain the assistance of a knowledgeable estate planning lawyer. Contact Ettinger Law Firm today to schedule a free case evaluation.