Choosing a Trustee

By Jim Gianelli

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One of the most important, and sometimes difficult, decisions you will make in estate planning is choosing a trustee. Your trustee handles your estate if you become disabled or after you die. Here is what to look for in selecting this important person:

Nearby: Ideally, your trustee should live close to you, so he or she can perform duties efficiently and economically. However, not every family has this luxury. But if your trustee has other qualities listed here, they still may be the best person for the job.

Responsible: Choose someone who can handle his or her own financial affairs. It is a good indicator whether they can handle yours. There will come a time when your trustee will handle your bank accounts, paying your bills and maintaining your insurance, etc. While your trustee does not need to be an expert in all the financial and legal matters involved, he or she must know when to seek guidance from an attorney, accountant, or a financial advisor.

Organized: Make sure your trustee doesn’t have stacks of disorganized bills piled on his or her kitchen table. Your trustee must be organized, so that trust account balances and all bills, invoices, and other documents are handled promptly and properly.

Practical: Common sense is valuable in administering an estate. Good business judgment is important when selling assets and dealing with insurance and other financial matters. Because of this, do not choose your trustee solely on the basis of friendship. Make sure he or she is able to make practical decisions relating to your care if you’re incapacitated and to your estate after you die.

Not all of us have the luxury of choosing an ideal trustee from among family and friends. If you find yourself at a loss, consider an independent trustee. Often, certified public accountants, enrolled agents, professional trustees or estate advisors are good candidates.

While these professionals may charge more, their ability to work efficiently and fairly often makes it well worth the cost – both in saving time and in helping curb the drama that sometimes grips families during these proceedings.

Some people who lack an ideal trustee try to solve the problem by naming two or more less-than-ideal family members to serve as co-trustees. Parents may name two children as co-trustees, even though the two don’t get along. They think that forcing them to make decisions together will keep them from fighting.

Unfortunately, that is not usually the result. Instead, the co-trustees fight bitterly and nothing gets done until one is forcibly removed by the court. Instead, simply choose one of the children to serve as sole trustee, or name an independent trustee.

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