Woman signing estate planning documents

What to Consider When Choosing a Trustee

Choosing a trustee to manage your funds, invest them wisely and distribute them when necessary is best made after careful consideration. Since you will be using a skilled estate planning attorney to establish the trust, that individual will be a good person with whom to discuss this important decision. If you are looking for a first-rate will and trusts lawyer in Southeastern Massachusetts or Cape Cod, Surprenant & Beneski, P.C. is an excellent choice.

Whether you are choosing a trustee to manage a large portion of your estate or as the administrator of a charitable, spendthrift, or special needs trust, you’re looking for a special kind of individual. Though you may be tempted to pick a close relative or friend because you love them and know they are trustworthy, it is wise to consider the following factors:

1. Realistic Assessment of Costs

Many people choose close friends or family members as trustees because they think such a person is unlikely to charge high fees (or any fees) for their services though a trustee may typically be entitled to between 1.0 and 1.5 of the trust assets annually. While this may well be true, bear in mind that such an individual will almost certainly need the services of professionals — attorneys, CPAs, financial advisors, etc. — to complete the job, and none of these professionals come cheap.

2. Ability to Protect Assets

Not only must you trust the person you choose to administer your trust to be honest and not dip into your funds even if their own finances take a terrible tumble. You must also be sure that the trustee you choose will be adept at handling money in order to protect your assets. If the individual might, with all the best intentions, take a dangerous risk with your funds, that person is wrong for the position. No matter how smart that person is, or how good at math, if they have never managed a large amount of money before, look elsewhere for a trustee.

3. Ability to Make Clear-Headed, Rational Decisions

You have to understand at the outset that a trustee will probably have to make tough decisions in order to preserve assets as well as provide assistance to those you love. No matter how much you trust your niece or nephew’s integrity, you should ask yourself if this individual will be able to withhold money from the relative with a substance abuse or gambling problem that prompted you to set up this trust in the first place. 

4. Aptitude for Detailed Recordkeeping and Reporting

To be well-suited to administer a trust, an individual should have a natural tendency to be organized and to keep neat, accurate records. Since you will be asking this person to file timely tax returns, and send regular statements to beneficiaries and the designated successor trustee, you want such documents to be drafted and handled carefully. If not, you risk a rift in the family based on claims that the trustee you’ve chosen is incompetent or even dishonest. You may also risk losing funds to fees and penalties if tax returns are filed late.

5. Acceptance of Liability

It is essential to understand that a trustee can be held legally liable for poor investment decisions, bookkeeping errors, or unnecessary costs accrued due to their negligence. Though you may not think it possible, a disgruntled beneficiary who feels cheated out of part of their inheritance may file a lawsuit against the trustee. The repercussions of such an action can not only be distressing to the involved parties but end up being costly to your estate.

Advantages of Having a Qualified Professional at Your Side

As you can see, being a trustee of an estate is a complicated, time-consuming job. This is why having the guidance and support of an experienced estate planning attorney (EP) is invaluable whether you are choosing a trustee and serving as one. This is because accomplished estate planning attorneys, like those at Surprenant & Beneski:

  • Have in-depth legal knowledge and are intimately familiar with how trusts work
  • Are used to handling important documents and keeping detailed records
  • Will be more rational than family members when it comes to handling monetary disputes 
  • Have a network of professionals, such as accountants, to turn to if necessary
  • Can advise you on how fiduciary responsibilities can best be fulfilled
  • Are trained to practice confidentiality 

Contact Our Experienced Trust Attorneys Today

We are available to discuss whether you can benefit from having one or more trusts as part of your estate plan and whether or not you already have the perfect person to be a trustee in or close to your family. If not, we are highly skilled and, though not members of your family, are empathic people who want what’s best for you and yours. Reach out to our team today.