The (Riverside CA) Press-Enterprise explains in its recent article, “Women on Money and Mindset: Estate planning: choosing a trustee,” that in a living trust, when the first spouse passes away, the other spouse usually becomes the sole trustee. When the second spouse dies, the trust should designate a successor trustee or trustees. You should take some time in considering who that successor trustee or trustees will be. Many people pick children, friends, other family members, professional fiduciaries and banks.

Children: Married couples often will name their oldest child as the successor trustee or they name all their children to act as co-trustees. This can work if there’s never been a divorce; there is only one child; she lives close; she doesn’t work and all the assets are investment accounts. However, most adult children will have full-time jobs. Adding the job of trustee can be a strain, because it’s time-consuming and technical. The administrative burden of taking care of your final business can be overwhelming.

Friends: Acting as trustee is a big large favor to ask. Therefore, if you’re going to ask a non-family member, set up a provision in your trust to pay them reasonable trustee fees.

Professional fiduciary: A professional acts as a trustee, which they do on a regular basis. They know what to do and are required by law to have the best interests of the beneficiaries of the trust as their top priority.

Banks: Banks like to act as trustees, especially if a big part of your trust is held in financial assets managed by that bank. They will charge higher fees than professional fiduciaries, and they’ll have some rigid internal rules to follow. If your beneficiaries may fight, or if they’re all out of state, a financial institution or a professional fiduciary is a wise choice.

The successor trustees named in your document should be notified and given a copy of your trust document. These successor trustees can always say no, so carefully consider naming the next in line.

A bank is a good backup. If you fail to name more than one person, and he or she can’t or won’t serve, your trust may have a court-appointed trustee.

You should also be sure to include your children in these trustee conversations and considerations. If you decide to name a child as your trustee, let them know what will be expected of them. Connect him or her with your estate planning attorney. Requesting your children’s help now to get these matters settled, will be helpful to everyone when the time comes to act as trustee.

We host regular FREE workshops and would love to have you attend.  Just click here to RSVP and we'll see you there.

Jeffrey Bellomo, Esq.

Reference: The (Riverside CA) Press-Enterprise (September 2, 2017) “Women on Money and Mindset: Estate planning: choosing a trustee”