Who do you “trust” to make certain that your financial legacy lives on?
Kiplinger’s recent article, “Consider Your Trustee Carefully: It Makes a Difference,” advises you to remember that selecting a trustee should be thought of as more of a business decision than a personal one. A trust can be perfectly designed for success, but its goals may not be fully carried out, when a trustee lacks knowledge, dedication, or objectivity.
You should know the trustee’s fiduciary responsibilities to make an informed choice when selecting someone to perform the duties. Consider more than a person’s understanding and respect for your financial goals and values, because a trustee must also play a big part in investment management, tax planning and filing, making appropriate distributions to beneficiaries or for their benefit and protecting the trust’s assets.
The trustee must regularly review beneficiaries’ requests for money and decide when to approve or deny distributions, in accordance with the trust’s instructions. Making this decision can be difficult and stressful for someone with a personal connection to the beneficiary.
One option is a corporate trustee, like a trust company or bank trust department. They can provide an objective, third-party opinion based on the long-term objectives of the trust. A corporate trustee can serve as either the sole trustee or co-trustee of your trust. Naming a professional trustee, along with a trusted friend or family member may be a good move.
Using a corporate trustee can potentially diminish unanticipated family tension, and also enables the sharing of fiduciary responsibilities with the co-trustee. The co-trustees must act in concert, unless the trust allows one co-trustee to act alone. It also may let the corporate trustee make the tough decisions in this situation, without doing further harm to the family relationship of the personal co-trustee and beneficiary.
Choosing the right trustee(s) can help make certain that your financial legacy and intentions will be carried out, plus, it will be done professionally and objectively solely for your heirs’ benefit.
One of the main goals of our law practice is to help families like your plan for safe, problem free, and successful transfer of assets to the next generation. Call our office today to schedule a time for us to review your estate plan and identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.
Reference: Kiplinger (October 14, 2019) “Consider Your Trustee Carefully: It Makes a Difference”