My answer is just like yesterday's post - it depends.
Again, everything about your life is a miraculous "one-off" in God's creation since the beginning of time as we know it.
Why should your estate plan be any different?
Selecting the "right" trustee for your estate plan is, well, essential.
As a key foundation to many estate plans, a trust can fulfill myriad objectives to include privacy, asset protection, probate avoidance, personal financial management, investment management and tax planning.
Against this backdrop, we turn to a recent article in Wilmington Business titled "Selecting the Right Trustee."
The article notes that selecting the right trustee to execute your plans is just about the most critical estate planning decision you can make, perhaps even as important as the terms of your trust itself.
Here are some qualifications the article suggests for your consideration when selecting your trustee:
Administrative Skills and Knowledge.
Your trustee must perform a lot of different tasks. Did you ever watched one of those "plate spinners" on the old Ed Sullivan Show? The trustee must simultaneously safeguard assets, collections, invest, reinvest, distribute income and principal, have legal documents prepared when needed, pay bills and many other tasks.
Oh, and as a "fiduciary," the trustee cannot make any mistakes. [Not really, but pretty close to the truth. See an excellent article on this from a few years ago in Kiplinger's titled "In You They Trust."]
Investment Expertise. He or she must establish an investment policy that satisfies the requirements of all the trust beneficiaries. This is no small order in the current volatile investment environment.
Tax and Accounting Skills. A trustee is required by law to maintain detailed and accurate records, as well as to submit reports to the trust beneficiaries, the probate court (if relevant), and the IRS. In addition, he or she must exercise discretion in a manner that will have the most beneficial tax results for the trust and beneficiaries. And this can be a rather tender balancing act.
People Skills. A trustee must be able to cultivate strong relationships with both the creator of the trust and the trust beneficiaries. Effective and ongoing communication among all parties is required to effect the stated trust purpose and ensure that the needs (not necessarily the "wants") of the beneficiaries are met.
By far, the most important qualification for a trustee is to abide by his or her fiduciary duty and maintain only the highest business standards. A trustee is expected to be loyal and treat each beneficiary fairly and impartially.
Folks commonly turn to a close friend or relative as their first choice as trustee. However, you need to ask yourself, "Will he or she meet all the qualifications I require my trustee to perform?"
In many instances, that go-to person may not be in the best position to carry out the duties necessary to be an effective trustee.
For example, a corporate trustee may be the E-Ticket given your unique circumstances, with your friend serving as the trust protector. On the other hand, sometimes a pro-am approach is perfect. This pairs your trusted friend with a corporate trustees, so you have the best of both worlds (allowing your friend/trustee to focus on the flesh and blood concerns, while the corporate trustee focuses on the "stubby pencil" details").
Regardless, your estate planning attorney can guide you in selecting the right trustee.
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: Wilmington Business (December 15, 2015) "Selecting the Right Trustee"
