Choosing a Trustee: What you need to know

Establishing a trust is akin to nominating a financial guardian who takes charge of your financial affairs. The role of a trustee is multifaceted, encompassing tasks like collecting income, paying bills and taxes, saving and investing for the future, buying and selling property, providing for your loved ones, maintaining accurate records, and ensuring everything is organized and in good order.

Who Can Be Your Trustee

Interestingly, if you have a revocable living trust, you can don the mantle of a trustee. For married individuals, their spouse can serve as a co-trustee, providing continuity in handling financial affairs if one becomes incapacitated or passes away. This arrangement is common among couples who jointly own accounts and property. However, being your own trustee isn’t obligatory. Some people opt for an adult child, a trusted friend, or even a professional or corporate trustee such as a bank trust department or trust company.

The decision to appoint someone else as a trustee doesn’t mean relinquishing control. The chosen trustee is legally bound to adhere to the instructions in your trust and keep you informed. Moreover, you retain the right to replace your trustee if you change your mind. This flexibility ensures that your trust is managed according to your wishes and best interests.

Professional or Corporate Trustee – A Worthy Consideration

There are circumstances where a professional or corporate trustee’s expertise proves invaluable. These include scenarios where you may be elderly, widowed, or in declining health with no children or other trusted relatives living nearby. Perhaps your other candidates lack the time or ability to manage your trust, or maybe you don’t have the time, desire, or experience to manage investments by yourself. Certain irrevocable trusts might also prohibit you from serving as a trustee due to tax law restrictions. In such cases, a professional or corporate trustee, with their experience, time, and resources, can effectively manage your trust and help meet your investment goals.

However, it’s important to note that professional or corporate trustees do charge a fee for their services. But when you consider their experience, the range of services provided, and the potential investment returns they can deliver, the fee is generally quite reasonable.

What’s next?

In conclusion, before making a decision, it’s crucial to evaluate whether you are the best choice to be your own trustee, consider appointing a co-trustee, assess your trustee candidates carefully and realistically, and if considering a professional or corporate trustee, speak to several to compare their services, investment returns, and fees.

Remember, we’re here to assist you in selecting, educating, and advising your successor trustees, ensuring they have the necessary support and knowledge to carry out your wishes. Don’t hesitate to reach out to us today.

750 F Street, Suite 2
Davis, CA 95616

333 University Ave, Suite 200
Sacramento, CA 95825

3017 Douglas Blvd, Ste 300
Roseville, CA 95616

288 Pearl Street
Monterey, CA 93940

San Antonio
18756 Stone Oak Pkwy, Ste 200
San Antonio, TX 78258

We operate on an appointment-only basis other than our Davis office.

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