By Libby Banks, The Law Office of Libby Banks
Do you have the right people or company named as your successor trustee?
One of the most important decisions you can make is who will be taking care of your estate – first for you if you become incapacitated and second for your beneficiaries when you are gone.
Here are a few qualities to look for in a successor trustee:
1. Availability to serve. Your sister may be financially savvy, but if she is now having health issues, will she really be able to assist you? Make sure who you pick can do the work of serving as your trustee.
2. Integrity and loyalty. Pick someone who you trust implicitly, someone who you believe would never consider misusing the trust assets.
3. Financial competence and willingness to seek assistance. You might think you need someone with business or investment savvy to be your trustee, but more important is having someone who is willing to seek out and listen to good counsel and advice.
4. Sensitivity to your beneficiaries’ circumstances. If your beneficiaries are minors or otherwise in need of an ongoing trustee to manage their inheritance, it is very important that the trustee understand what you want for them and are sympathetic to the beneficiaries’ needs.
5. Knowledge of your assets and/or business interests. Does your trustee know what you own, or can they quickly find out with directions you leave? Do they understand your business or asset distribution? When selecting your trustee, consider what assets you own, and how they will be able to step in to manage those assets.
6. Similar values and attitudes about money. It’s important for a trustee to understand what you want for your beneficiaries in the way of distributions, access to the assets, and opportunities to manage the assets themselves. Similar values ensure your beneficiaries are treated the way you want.
7. Geographic location. With advances in technology and communication, the location of your trustee and beneficiaries may not be so important. However, consider that if you are incapacitated, you may want a trustee who is nearby. You can appoint one trustee for incapacity and a different person for after you pass.
8. Cost and amount of estate assets. Lastly, you need to consider cost. Banks and trust companies generally charge based on a percentage of the assets under management. Many don’t offer trustee services for estates under $1,000,000 (or more). Private fiduciaries, who are licensed by the state, charge on an hourly basis. While they are often willing to manage smaller estates, many have limitations. A family member or friend may be willing to manage your estate whatever its size. Remember, though, that you should provide compensation for the work the trustee performs, even if they are related to you.
Our office would be happy to assist you in creating your trust plan and selecting the right trustee. Call for a free initial consultation at 602-375-6752.