When you set up a trust as part of your estate plan, the beneficiary can’t make withdrawals on their own. Instead, this is handled by the trustee. You can give the trustee instructions to follow regarding how these distributions should be handled.
As such, choosing the right trustee is critical. What are some things that you should look for?
Understanding of your wishes
First off, this should be someone who understands your wishes, your financial philosophies and the reasoning behind the trust. It has to be someone that you can count on to uphold your ideals. You won’t be around to enforce the trust, so you need to know that this person will do so in your stead.
Understanding of financial transactions
Next, they need to be someone who can handle slightly complex financial transactions. For instance, they may have to withdraw money from the trust to pay a beneficiary’s college tuition costs. Do they know how to access the accounts, transfer the money, keep appropriate records and more?
Willingness to do the job
Finally, remember that some people will see trust administration as a burden. It may be too complex, too emotional or just too labor-intensive for them. This is why you shouldn’t choose a trustee, in most cases, without talking to them first. Make sure that they actually want to step into this role and are willing to do so.
Once you have found the right trustee, it’s time to set up your trust and get your estate plan ready. Carefully consider the legal steps to take at this time.
