A trustee is an integral part of a living trust. The trustee is the person who makes sure the terms of your trust are followed. Depending on the terms of your trust document, the trustee will ultimately handle your financial affairs, including paying bills, investing and keeping accurate records. So, who should be the trustee of a living trust?
You can be your own trustee
Yes, you can be the trustee of your own living trust, if you choose, as long as you are competent to do so. Your spouse can also serve as trustee with you. In fact, it is common for most married couples who jointly own their assets, to be co-trustees. This can be helpful because, if either of you becomes incapacitated or passes away, the other spouse will be able to immediately continue handling the trust property. No court intervention would be required. This is one of the reasons many couples choose a living trust as opposed to a will. However, it is not necessary for you to be your own trustee.
Choosing a relative or friend to be trustee
Another common option is to select an adult relative, such as a child, or a trusted friend. Choosing someone you know personally, certainly has its benefits. Typically trustee fees of friends or family members are significantly less than corporate or professional trustees. You are also more likely to receive their personal attention. Whereas, a financial institution is responsible for managing many trusts at a time, and may not be able to provide personalized service.
Financial institutions and professionals
You can also choose a financial institution to be the trustee of your living trust. Most major corporate trustees and trust companies are qualified and quite capable of providing trustee services. The knowledge and expertise in administering a trust can provide peace of mind. A licensed professional may also be an option. This could include an attorney or Certified Public Accountant.
Can Trustees Get Help?
Yes. If you decide to take on this responsibility yourself, don’t worry. You can absolutely seek the assistance of an expert. In fact, it is strongly suggested that you do. Estate planning attorneys, especially those who are experienced in trust administration, are there to guide you through the entire process.
It is also advisable to hire a tax preparer or accountant when the time comes to file the trust's tax return, as well as to advise you on income tax issues that may arise when you sell or distribute the trust assets.
If you have questions regarding trust administration, or any other estate planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.