Once you decide to create a living trust, you are immediately faced with perhaps the most important decision of setting up and maintaining a trust; the designation of a trustee. The trustee is the person who will oversee the management of your trust, And while it would be understandable if you were to think that your sibling or best friend would be an excellent trustee, it often happens that the people closest to us may not be the best qualified for the difficult role of trustee.
Thus, choosing a trustee for your living trust is an extremely important and often difficult decision.
Since you are picking someone to manage your financial future as well as the disposition of your estate, you therefore should consider choosing a trustee as a business decision. Choosing a family member, or even a close friend, as your trustee may not be the best choice if that person does not have a solid business head.
The trustee has a “fiduciary” responsibility toward the trust--that is, they owe a duty of care, good faith, honest, and diligence. You need to pick a trustee that can fill this fiduciary role.
Thus, the person you choose as your trustee should be:
Again, choosing a friend or family member might seem like a natural decision, but be aware that such a choice may end up putting that person in the middle of family squabbles over your estate. There may be people who are dissatisfied with the terms and conditions of the living trust and will try to influence your trustee.
Unless you think that the person you are considering as trustee is resilient and focused enough to withstand such a potential position, you might want to reconsider your choice of trustee.
If you have total trust and confidence that a particular family member or friend will act in accordance with your wishes, then of course choosing such a person to be a trustee is a viable option. But it is not unusual to decide against choosing a friend or family member to take on such a heavy responsibility.
Often the trustee you choose, then, is neither a friend nor a relative. A corporate trustee--such as a banker or stockbroker--is often a sound choice, since a corporate trustee is likely to exercise educated, impartial, reasoned judgments regarding financial matters. Professional trustees usually charge a fee, but often having such a trustee is worth the expense, especially if your estate is significant.
It is also important to remember that being a trustee can be a very complex and time-consuming job. You should choose as your trustee someone who will be able to dedicate a significant amount of time to the trustee duties, duties which may extend over several years. In a related way, you might also prefer a trustee that lives close to you and/or to your beneficiaries, in order that the duties of trustee might be carried out more effectively.
Keep in mind, of course, that you can always revoke the living trust or change trustees of your trust.
If you live in Michigan and need experienced estate planning help, contact Michael Einheuser for a free consultation. Michael helps families in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township, Bloomfield Township, and the surrounding Michigan areas.
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