Asset Planning, Inc Blog

The latest from the team.

The Importance of Choosing the Right Trustee


More and more people are realizing the importance of setting up a trust for their estate. Having a trust in place insures that your wishes for your estate are carried out on your terms if you become unable to care for yourself or pass away. It also prevents your assets from going into probate after your death and saves a huge headache for your heirs. While having a trust in place is very important it is also very important who you name as the trustee.

There are a few different options when selecting a trustee. The most common scenario is that a married couple sets up a living trust where they are both listed as trustees and they list a child or family member to become the successor trustee. In the case that one spouse passes before the other the living spouse will become the sole trustee until they are incapable of caring for themselves or they pass away. At that point the successor trustee in charge of handling the estate duties.

The responsibilities of managing an estate are many and can be daunting to someone who lacks experience in these types of situations. When choosing your trustee you should choose someone who is (a) willing to dedicate the time and energy to run the estate (b) responsible and possesses good judgement and (c) someone who can be objective when following the instructions set up in the trust. It may seem like the natural choice to choose your child or a family member to act in this role but it may not be the best choice depending on the complexity of your estate and their abilities.

In the case where a person is unsure of who to name as a trustee an estate attorney will usually suggest that a bank be set up as the trustee to carry out the responsibilities of the trust. This is called a corporate trustee. This seems like a good idea because a bank has experience with handling trusts and wealth management. But this is not always the best choice either. When the duties of a trustee are needed the bank will take over the trust, move your assets from whatever accounts you have them set up in now to investments of their choosing and will take over the estate. They will follow the instructions in the estate as wished but it may leave your family without the feeling of a personal connection since they may not have worked with that bank before or know the person handling the assets.

Did you know that you have another option that will help ease the burden on your loved ones by running the estate themselves? There is something called an administrative trustee. In a lot of cases we see a child take over the duties of the estate and get overwhelmed with the process. They may be doing it free of charge but in the long run trying to take care of everything on their own ends up costing more financially and emotionally. An administrative trustee is a company that is set up to handle all of the time consuming paperwork and filing responsibilities of the estate. They do not make any decisions as far as wealth management is concerned. That is still the responsibility of the trustee and their financial advisor. Yes, there is a fee to have an administrative trustee but it can outweigh the stress and headaches that come along with trying to do everything yourself.

The best thing to do is have an open discussion with your family, estate attorney and financial advisor. Make your goals and wishes for the estate clear and set up the trustee that you think will be the best fit for your personal situation. By doing this you will have the peace of mind knowing that your wishes will be followed and that your family will be taken care of in the way that you want.

Continue reading
  685 Hits
685 Hits

Search Blogs Module

Wait a minute, while we are rendering the calendar
pet privacy notices Facebook profile retirement home investment statements Legal robocalls 20 year anniversary tax season Wells Fargo employees phishing scams card reader borrowing money chip-enabled EMV cards pets debt IRA accounts interest rates credit freeze contribution limit Open House identity thieves drive /usb flash drive clients show support estate DNA test kits president Trump fun facts Social Security Administration non-prescripstion sunglasses IRS deadline insurance policy 2017 TD Ameritrade National LINC Conference Wells Fargo customers disaster areas California Lions Friends Puerto Rico gap insurance Kiplinger Letter paperwork clutter Auto insurance “ skimmer ”. credit score Social Security CERTIFIED FINANCIAL PLANNER exam https ://seekingalpha banking insurance policies estate planning Medicare Part B premiums driver license Retirement Contribution Limits home security pet industry retirement plans 2017 IRA contributions ID card pet supplies Kraig Mathias money Medicare Supplemental Security Income Brexit vote illiegal robocallers Medicare Part B wells Fargo Notary Public National Ice Cream month bottom line earthquake app trust home break-ins credit cards increase Affordable Care Act credit card fraud rescue organizations consumer spending Orange County Superior Court Part B vacation retirement accounts 4 pm -8pm home mortgages clone counterfeits car loans trustee Shred paperwork Mobile Banking Security Tips client portal ice cream event information Facebook Roth IRA Independence Day retirement planning memorial Day weekend Healthcare clients policy Two-Step Verification fees identity theft 401K Treasury Department 23 andme birth certificates relief efforts July 4 June 29 asset Planning Fox News story executive order credit card company parking spots opt-out Orange County April 18 2017. Part D premiums . emergency folder portal official certification VOIP landline phones Open Enrollment notary services vision screening Victor Dergunov prescription eyeglasses D premiums 70 1/2. emergency kit assets FEMA website Medicare question spring cleaning privacy settings jury duty account numbers April 11 house sitter summer documents October 1 2020.