Tips for Choosing a Trustee

Trusts can be a powerful tool for protecting assets, passing property to loved ones after your death, or providing for a loved one who is disabled or incapacitated. You can work with your trust attorney to create a framework that will provide for your beneficiaries in the manner you prescribe. In this sense, trusts provide much greater flexibility and control than wills or outright gifts.

However, ensuring proper administration of the trust for the benefit of those you intend to provide for depends in part on choosing the right trustee. Unfortunately, lack of experience or family pressure sometimes leads grantors to base that all-important decision on the wrong factors.

Factors to Consider When Choosing a Trustee

1. Trustworthiness and Reliability: It may seem obvious that you would look for someone you trust when choosing a trustee, but family relationships sometimes dictate otherwise. The simple fact that you’re close to someone or that he or she is your oldest child does not mean that person will make the best trustee.
2. Skills and Knowledge: Though being a trustee doesn’t require any specific credentials, the person administering your trust will have to maintain financial records, make decisions about expenditures and plan to ensure that your beneficiaries’ needs are met for as long as you intend. Choose someone who has the ability and discipline to manage the trust responsibly and efficiently.
3. Willingness to Serve: It can be difficult for a family member or close friend to decline when asked to take on this type of responsibility, but many are reluctant or don’t feel qualified. When choosing a trustee, have an honest conversation with each person you’re considering and encourage him or her to be open and honest about any concerns or reluctance to serve.
4. Family Stress: Family tensions shouldn’t push you to appoint the wrong person trustee simply to avoid conflict or meet expectations. However, there’s another way in which consideration of family dynamics is critical. When one sibling or other family member is the decision-maker, the pressure can be tremendous, and personal conflicts may break out as the result of the trustee’s decisions. Where the trustee has discretion and there is potential for disagreement, it may be best to appoint someone further removed from the situation.

Note that an experienced trust administration attorney can assist your appointed trustee in fulfilling technical duties–the trustee need not have advanced legal knowledge to handle the job effectively.

Choosing Successor Trustees

In the best of circumstances, your first choice for trustee will be qualified and willing, and will administer the trust long-term. However, there are several contingencies you must be prepared for when choosing a trustee:

• Your appointed trustee could decline to serve. Circumstances change, so this could happen even if he or she had previously agreed to manage the trust.
• Your appointed trustee could become incapacitated, rendering him or her unable to fulfill the duties of trustee.
• Your appointed trustee could pass away while the trust is still active.
• Your appointed trustee could be removed for failure to fulfill his or her duties. Though careful selection minimizes this possibility, unanticipated problems occasionally arise.

In each of the situations described above, a successor trustee will have to be appointed. If you have appointed one or more successors in the trust document, this is a relatively easy process and you can expect that someone you have personally selected will take over. If the trustee declines the appointment, resigns, or becomes unable to serve and you have not appointed a successor, then a successor will be chosen by the beneficiaries or, if they cannot come to a unanimous agreement, by a court.

A Trust Lawyer Can Advise You on Choosing a Trustee

Though the ultimate decision as to whom to appoint as trustee and successor trustees is yours, an experienced trust attorney can be your best resource as you make this important decision. A trust and estates lawyer can walk through the selection process with you, ensuring that you haven’t overlooked important considerations.

Your attorney can also ensure that you fully understand the role and responsibilities of the trustee, so that you can make an educated decision and have a thorough and accurate discussion with the person you choose.