Important COVID-19 Update: We offer consultations via phone, video, or in-person. Here’s information about our process during this time.

The Heritage Law Center, LLC Blog

Choosing the Right Trustee

POSTED ON: October 19, 2017

Appointing the right trustee is an important decision for anyone who is in the process of creating a trust. The trustee is responsible for managing the trust either when the trust is formed or in the future, depending on your type of trust.  While many people naturally consider giving a family member this responsibility, it is possible for a close friend or outside party (such as a financial planner or estate planning attorney) to manage the estate.  If you have a living trust and are able to manage your own finances, you and your spouse (if you have one) can be co-trustees for as long as you are able.  In this case, it’s also important to appoint a successor trustee to manage your finances when you can longer do so.

What is a Trustee in Charge of?

A trustee is responsible for much of the day to day money responsibilities that you probably already do. Among other things the trustee is in charge of these financial tasks:

  1. Maintaining the account balance of the trust and paying bills;
  2. Investing the trust money to help it grow and at the very least keep up with the rate of inflation;
  3. Administrative matters, such as filing regular statements to beneficiaries;
  4. Tax issues, such as filing tax returns on behalf of the trust.

What to Consider When Picking a Trustee

A trustee has the legal responsibility to oversee the trust according to the grantor’s specifications and the beneficiaries’ best interests. When thinking about who your trustee should be, the person should be trustworthy, timely and have good common sense.  Knowledge of the specific needs and personalities of the beneficiaries as well as the financial aspects of the estate can save the time it takes to get another party acclimated with the unique considerations of your family.  While legal skills aren’t necessary to manage a trust, knowledge of finance and accounting can be great skills to have.  Sometimes being a trustee of an estate can consist of a lot of appointments and it can be helpful if the trustee lives close by.  Often, if there is a trustworthy adult daughter or son that lives close by in the family, they can be an excellent consideration for the job.

Do you need to hire outside help?

Managing a trust can sometimes feel like another full-time job, so it’s important to make sure that whoever you decide to manage your trust is up to the task.  If you don’t have family living close by, or don’t know anyone trustworthy with the time to manage your trust, sometimes hiring a professional to manage the trust can be a smart decision. For larger estates, financial professionals can also be hired to fill in gaps of knowledge that the trustee may have. Sometimes people are reluctant to hire outside help because of the cost, but with the unique needs of each estate it can be helpful to discuss your specific situation with a professional to make the best decision for the life of the trust.  In fact, it can be helpful to have a disinterested 3rd party as a trustee to balance out the emotional decision making that frequently comes with estate manners and provide creditor protection for beneficiaries. 

Naming someone to manage your trust can be a difficult decision, but when all the factors are carefully considered a  competent trustee can help preserve your financial legacy and give you peace of mind knowing your family is being taken of exactly as you intended.