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Choosing a Trustee for Your Estate Plan

Posted on: September 12th, 2013

When you establish a Trust, you name someone to be the Trustee. A Trustee basically performs the same functions that you perform now with your financial affairs such asmaryland-living-trust-and-estate-planning collecting income, paying bills and taxes, saving and investing for the future, buying and selling assets, providing for your loved ones, keeping accurate records, and generally keeping things organized and in good order.

Key Points:
o You maybe the Trustee of your Revocable Living Trust. If you are married, your spouse may serve as Co-Trustee.
o Most Irrevocable Trusts do not allow you to be the Trustee.
o Even though you may be allowed to be your own Trustee, you may choose not to take on that role for various reasons.
o You also may choose an adult child, trusted friend or a professional or corporate Trustee.
o Naming someone else to be Co-Trustee with you allows them become familiar with your trust, allows them to learn firsthand how you want the trust to operate, and allows you evaluate the Co-Trustee’s ability to manage the Trust according to your wishes.

Who Can Be Your Trustee
If you have a Revocable Living Trust, you may be your own Trustee. If you are married, your spouse may be Trustee with you. This way, you become incapacitated or die, the your spouse may continue to handle your financial affairs without interruption. Most married couples who own assets together, especially those who have been married for some time, often serve as Co-Trustees.  Equally as effective is naming your spouse as your Successor Trustee

It is not required that you serve as Trustee for your own Revocable Living Trust. Some people choose an adult son or daughter, a trusted friend, or another relative to serve as the Trustee, even while you are alive and healthy. Some people prefer to have the the experience and investment skills of a professional or corporate Trustee, e.g., a bank trust department or trust company. Naming someone else as your Trustee or as Co-Trustee with you does not mean that you lose control. The Trustee you name must follow the instructions in your Trust and report to you. You even may replace your Trustee should you change your mind or should circumstances change.

When to Consider a Professional or Corporate Trustee
People who are elderly, widowed, or in declining health and have no children or other trusted relatives living nearby often consider using a Professional or Corporate Trustee. Other people do not have candidates with the time or ability to manage their Trust. You may simply not have the time, desire or experience to manage your investments by yourself. Also, certain Irrevocable Trusts will not allow you to be the Trustee. In these situations, Professional or Corporate Trustees may be exactly what you need: they have the experience, time, and resources to manage your trust and help you meet your investment goals.

What You Need to Know
Professional or Corporate Trustees will charge a fee to manage your Trust, but generally the fee is quite reasonable, especially when you consider their experience, services provided, and investment returns.

Actions to Consider
* Honestly evaluate if you are the best choice to be your own Trustee. Someone else may truly do a better job than you, especially in managing your assets.
* Consider name someone to be Co-Trustee with you. This would eliminate the time a successor would need to become knowledgeable about your trust, your assets, and the needs and personalities of your beneficiaries. It would also let you evaluate if the Co-Trustee is the right choice to manage the trust in your absence. An alternative approach is to be sure to name a Successor Trustee who is ready to take over the responsibilities and who is knowledgeable about your Trust and your assets.
* Evaluate your Trustee candidates carefully and realistically.
* If you are considering a Professional or Corporate Trustee, talk to several of them. Compare their services, investment returns and fees.

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