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News and Announcements April 2014

Selecting a Trustee

One of the more critical decisions you’ll make when setting up a trust is selecting a trustee. Depending on the trust’s provisions, the trustee can serve for decades, with broad discretion in managing assets and distributing income and principal. Some thoughts to consider when deciding on a trustee include:

  • Decide whether to choose a family member, friend, or professional trustee. You want an honest individual with some basic financial aptitude. You could decide to name two trustees, perhaps a family member and a professional. The professional could handle investment decisions, while the family member could oversee those decisions and make distribution decisions. Before naming a trustee, obtain that individual’s consent.
  • Don’t rule out a professional due to the fees involved. While friends and family may serve without compensation, consider whether they could handle financial decision as well as a professional. The trustee’s duties can be complex and time-consuming. You should consider whether a friend or family member has the time and aptitude for the task.
  • Name a successor trustee. If your trustee dies, becomes incapacitated, or decides he/she doesn’t want to serve as trustee, you should have a successor trustee named or at least describe how one should be selected, such as by a majority vote of the beneficiaries.
  • Set up performance guidelines. That way, if the trustee does not meet those guidelines, your beneficiaries will have a means to change trustees.
  • Write a letter to your trustee explaining your wishes. This letter should explain your objectives for the trust, information about the beneficiaries, and other factors that will help the trustee make decisions.

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