Picking A Trustee - 4 Easy Steps
By: Christopher Holtby - January 31, 2018
Picking a trustee gets less attention than choosing your new smartphone. In the first place, it is not a fun moment. You and/or maybe your spouse are sitting with your estate planning lawyer. You are planning what happens when you pass away. For engineers and math people this is a logical emotional process. For everyone else it is a winding road of emotions and what-ifs. To sum up, in your Will or separate trusts you have to pick a few positions. In your Will you need to pick an Executor, Guardian (if you have kids), Beneficiary and a Trustee. If you have a revocable or irrevocable trust you will need to pick a Trustee and Beneficiary. In short, picking a trustee is really important. They control everything.
A trustee follows the rules of the trust document. A trust document creation occurs in your Will when you pass away and/or in a separate trust document while you are alive. In any event, picking a trustee is a must. A trustee has a ton of power such as:
- how much and when people get money from the trust
- permitted investments in the trust
- protect trust assets from bad people
- other complex trust accounting and administration rules
- A person can steal trust assets. A trust company has huge checks and balances and insurance.
- A person can play favorites with beneficiaries. A trust company legally can not.
- A person will age and get sloppy with the trust rules. A trust company never ages.
Most people do not manage money well. Some trust companies do and some do not. After all, we do not manage trust money. In the end, who do you want managing the trust assets – independent financial advisor or a trust company? We believe people want the flexibility of a financial advisor.
** Disclaimer Required by IRS Circular 230** Unless otherwise expressly approved in advance by the undersigned, any discussion of federal tax matters herein is not intended and cannot be used 1) to avoid penalties under the Federal tax laws, or 2) to promote, market or recommend to another party any transaction or tax-related matter addressed.