Wills and Trusts:

Overview

One of the most important aspects of executing a successful estate plan involves selecting a trustee. Because the responsibilities involved with serving as a trustee are often complex and time consuming, it’s wise to carefully evaluate your options before making your selection.

Your trustee’s exact powers and duties will depend on the instructions in your trust agreement.

In general, a trustee will:

  • Hold the trust property
  • Invest the assets
  • Distribute the trust’s income and/or principal to beneficiaries
  • Make tax decisions concerning the trust
  • Keep records of all trust transactions
  • Provide accurate statements
  • File tax returns
  • Issue tax reports
  • Answer questions that beneficiaries may have

Before appointing a trustee, you should evaluate if your candidate’s personality and lifestyle make them a suitable choice for handling the duties and responsibilities of being a trustee.

Specifically, you should consider:

  • Is the person detail oriented and organized?
  • Will their career or lifestyle afford them the time to devote to the responsibilities of being trustee?
  • Can they be sensitive and unbiased when decisions must be made?
  • Does he/she have the investment expertise to manage the trust assets?

It is important that the person you select as a trustee is honest, trustworthy, and capable of upholding their legal obligation to make decisions in the beneficiaries' best interests. Keep in mind that you can decide how much power to give to the trustee and take the time to consider all of your options when making this key decision.

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Wills and Trusts: Choosing a Trustee