Who Is Your Trustee? Important Items to Consider When Naming Your Trustee
This is a question that I address on numerous occasions with many of my clients. Unfortunately, many times, people pick the wrong successor trustee for their living trust.
Trusts
As a brief summary, a trust has three parties. First, you have the grantor (sometimes called the trustor or trustmaker). This is the party that establishes the trust. Second, you have the trustees. This includes both the initial trustees and the successor trustees. This is the party that takes title to the assets that you hold in trust. The initial trustees and grantors are usually the same parties. For many of my clients, they are both the grantors and trustees of their living trust. The successor trustees are the parties who will be in charge of distributing your trust assets after your death or will be in charge of managing your trust and the trust assets in the event that you become incapacitated. The third and final party are the beneficiaries. These are the persons or charities who will be receiving your assets upon your death.
So, who should be your trustee? Well, as I stated above, for many of our clients, they are the trustees of their own trusts. However, who should be the successor trustee? I was speaking with a client recently who wanted to name his oldest son as the successor trustee because he would feel insulted if he was not selected. When I asked this client to tell me about his son, he told me that his son lives out of state, has been divorced, and filed for bankruptcy last year. You should really think about the responsibilities involved when selecting your successor trustee.
Before you select your successor trustee, please keep these questions in mind:
- Will this person be able to take on all the additional responsibilities as trustee?
- Does this person have problems with debts and creditors?
- Does this person not handle stress well?
- Is this person organized?
These are just a few questions that you should consider when naming and selecting the successor trustee for your trust.
For More Information
If you have questions about selecting the correct successor trustee and establishing the necessary legal protections for you and your family, then please contact our office at (513) 241-0400 or use the contact form on our website to schedule a time to meet with one of our Estate Planning Attorneys. We look forward to seeing you in the office soon!