How to Choose the Right Trustee For Your Trust
Appointing the Trustee of the trust that you create will be one of the most significant decisions you make when creating or updating an estate plan. A Trustee’s responsibility is to manage the trust assets and ensure that your wishes are carried through. They also distribute the trust property in accordance with the trust agreement. To help you make the right choice, the Indianapolis attorneys at Frank & Kraft discuss what to consider when appointing a Trustee for your trust. To help you make the right choice, the Indianapolis attorneys at
- Frank & Kraft discuss what to consider to ensure that you appoint the right Trustee for your trust.
- Trustworthiness and Integrity: Perhaps the most important quality in a Trustee is trustworthiness given that the Trustee will be handling assets on behalf of beneficiaries and will need to manage them responsibly. You must be confident that the person or organization you choose will act in the trust’s best interest and the benefit of its beneficiaries. Your Trustee must adhere to the highest ethical standards, even when faced with difficult decisions or personal challenges.
- Financial Competence: Managing a trust often involves complex financial responsibilities, meaning that your Trustee will need to invest trust assets prudently, file tax returns, manage income and expenses, and ensure that distributions are made according to the terms of the trust. The Trustee should be well-versed in financial management. If you don’t have someone in mind with financial expertise, consider appointing a professional Trustee or a corporate entity with fiduciary experience. If you do not have someone with financial expertise in mind, consider appointing a professional Trustee or a corporate entity with fiduciary experience.
- Familiarity with the Law and Fiduciary Responsibilities: A Trustee must understand and comply with state and federal laws that govern trusts, including fiduciary obligations. Fiduciary duties require the Trustee act in the best interest of the beneficiaries, and manage trust assets with the same care and skill as a prudent person. It is important that your Trustee be aware of their fiduciary responsibilities to avoid any conflicts or legal issues during the administration of the trust. An awareness of fiduciary responsibilities is critical to avoid potential conflicts or legal issues that may arise during the administration of the trust.
- Availability and Commitment: Serving as a Trustee can be time-consuming, depending on the size and complexity of the trust. A Trustee must be available to handle trust assets, respond and answer beneficiary questions, and perform administrative tasks such as preparing tax returns or preparing reports. This could take a lot of time and effort over many years. Be sure that the person you choose to be your Trustee is aware of the time commitment and willing to put in the effort. Ideally, your Trustee should be someone who can commit to serving for as long as necessary, especially if the trust is intended to last for many years, such as in the case of a trust for minor children.
- Impartiality: Your Trustee must be impartial, especially when multiple beneficiaries are involved. They must be able make decisions that are fair for all beneficiaries, whether they are family or close friends. If you anticipate family conflicts or emotional ties affecting objectivity, it might be best to appoint a professional Trustee.
Consider Appointing a Professional Trustee:
If your trust is particularly complex, contains significant assets, or involves potentially contentious beneficiaries, a professional Trustee or a corporate Trustee might be the better option. A professional Trustee such as a bank, trust company, or attorney has experience in managing trusts and handling investments. For more information, join us at an upcoming FREE seminar. Contact the Indianapolis estate planning attorneys of Frank & Kraft for help in appointing the right Trustee to your trust. Call (317) 684-500 or contact us to schedule an appointment. Read More!
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