Incorporating a trust into your estate plan is a great way for many Coloradoans to exercise more control, customization and protection over their assets. While many different types of trusts exist to accomplish distinct goals, one thing remains constant: the need for a responsible trustee to facilitate the transfer of your assets.
Similar to how a personal representative manages the will after a death, a trustee manages the trust. In some cases, the trustee fulfills their duties both from the point of its creation and after the death of the creator of the trust. This role is one that can be complex, time-consuming and financially intricate. With that said, what are some considerations when choosing your trustee?
Look beyond immediate family members
Your spouse or eldest child may be your first thoughts when considering who to choose to manage the contents of your trust. However, your spouse or next of kin may not always be the best choice. According to Forbes, choosing a spouse can become especially complicated in blended families. Additionally, if your child lives in a different state or across the country, it can become complicated for them to effectively execute their duties.
Think of their relationships with your heirs
Whether you consider choosing a family member, friend or a neutral third party, consider their relationship with your heirs. If your brother is financially savvy yet does not get along with your other heirs, selecting him as trustee can lead to bitter feelings and disputes later on.
Consider their financial knowledge and responsibility
While the role of trustee may not require a degree in finance, some financial knowledge can be very helpful. Forbes states that the trustee must both protect and manage the contents of the trust. This can include many different duties, including managing investments, coordinating the disbursement of the trust’s assets to heirs and always complying with the terms established by the creator of the trust.
Don’t rule out choosing a third party
Many Coloradoans decide to choose a neutral third party, such as a corporate trustee, to manage their trust. While this may seem like a last resort at first, it can make sense for many situations. You will likely bypass the potential for inter-family conflicts between the trustee and heirs, you can trust in their experience and you can gain peace of mind in knowing your assets are in the hands of a knowledgeable professional.