On September 12, 2012

One of the most important tasks of setting up an estate plan is determining who will see that your plan is carried out to your specifications. If you set up a trust, which can stay in effect for years after you’re gone, you’ll need someone who’s willing to invest the time and good judgment necessary to maintain it.

Your trustee can be a close friend, family member or business partner. You may also choose to go with a professional who’s well-versed in estate administration and money management. If you can’t decide, consider the size and complexity of your estate, which may dictate how much time and knowledge will be needed to handle the job of trustee.

Those with very large estates often rely on a corporation to handle their affairs. Because corporate trustees usually charge more than an individual to manage a trust — around 1 percent of a trust’s assets — they’re best left to trusts over $50,000. Even then you may not need more than what an individual trustee can provide, if the trust isn’t overly complicated.

Many people choose a trusted family member, and that choice is good because the person knows your history and is more likely to be emotionally invested in making sure the trust succeeds. But you’ll want to make sure that whomever you choose is up to the task. Not only can the administrative duties be time-consuming, but being a trustee requires some knowledge of investment and diversification and the ability to distribute assets to beneficiaries. If the person you trust most to do the job lacks some of the skills necessary, you can hire an attorney, accountant or corporate trustee to learn from and act as a backup.

What if the beneficiaries in your trust are famous for bickering or have long-standing feuds? This is not uncommon, but it does require some extra consideration when choosing a trustee. You’ll want to make sure that your trustee has the wherewithal to withstand pressure or even litigation from either side of a strained relationship among family members, which is why many people with contentious family dynamics opt for an impartial corporate trustee.

One of the goals of estate planning is to minimize the possibility of fighting over your estate after you’re gone. Choosing someone to administer your trust may cause some stress in the short term, but the right decision will have long-term benefits.

Source: The Wall Street Journal, “A Matter of Trust,” Jeanine Skowronski, Sept. 10, 2012

· Our law firm handles trusts, wills and a wide variety of estate and probate issues. To learn more about our practice, please visit our Colorado estate and trust administration page.

Categories: Trustees, Executors & Fiduciaries

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