A trust can be helpful, if done properly and in the right circumstances.
Estate planning is not easy.
It requires forethought and planning.
You must consider how to most effectively leave your assets to your heirs.
What do you need to accomplish this mission?
A will to guide the probate process?
A revocable living trust to avoid the probate process?
Trusts to manage an inheritance can be created under either a will or a revocable living trust.
Either way, according to a recent BizWest article titled “To Trustee or not to Trustee,” trusts can be a popular choice for families with wealth.
Trusts are also more complex than outright distributions of an inheritance and require a trustee.
What is a trustee?
A trustee is an individual, corporation, or board designated by you to oversee the administration of the trust after you die.
Although you may define how asset distributions are to be made, the trustee is tasked with making these distributions to the beneficiaries according to your wishes.
This jobs is not simple.
Be sure you select a worthy and capable trustee should you choose to create a trust.
Do not select someone merely because he or she is a family member or a close family friend.
The trustee needs to be able to handle administrative duties and taxes associated with the trust.
People often choose corporate trustees because they have accountability through federal and state regulatory agencies.
Can you have both a corporate and an individual trustee?
Yes.
In fact, it can be a beneficial partnership by pairing the personal and professional.
What are things to consider when naming a trustee?
First, the trustee must be able to work well with people of varying personalities, ages, and backgrounds.
The trustee should be able to balance the needs of these individuals with the needs of the trust.
Would a beneficiary try to take advantage of the trust?
Of course not! [Sarcasm]
You will need a trustee who is able to say "no" when necessary.
Whether you decide to use a revocable living trust or a will to establish a trust to administer the inheritance you leave, you should discuss your estate planning decisions and what they mean to each of your heirs.
Being informed of your decisions and your reasoning can help curb hurt feelings.
It will also make the job of your executor or trustee far simpler.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
Reference: BizWest (November 27, 2017) “To Trustee or not to Trustee”
Comments