Tips For Choosing A Trustee

Posted on: 5 April 2017

When you set up a trust, you will also need to decide who will manage the trust. The responsibilities involved with managing a trust includes investing the money, making sure the applicable taxes are paid, and doling out the payments as scheduled to the beneficiaries. As you can see, who you choose to manage the trust, known as the trustee, should be an extremely well thought-out decision. Here is what you should know before you choose a trustee.

What Kind Of Trust Is It?

There are generally two kinds of trusts. One is a living trust, which is set up while you're still alive. For example, you may want to set up a trust for your children or grandchildren's' future education needs. You can choose to administer this kind of trust yourself, but if you don't feel like it, you can appoint a trustee. The other kind of trust is a testamentary trust. This is a trust that you put in your last will and testament, and a trustee is required to oversee it.

How Complicated Is the Trust?

A simple trust that has a relatively small value and is straightforward may be best managed by a trusted family member. They will most likely have a vested interest in seeing the trust succeed. However, more complicated trusts with larger monetary values may be best handled by an attorney or a professional trust management company. While you may pay a small percentage point or two for this service, an outside expert may provide you the most peace of mind. This is your best option if the trust is multi-faceted, such as if it includes rental properties, stocks, annuities, and multiple beneficiaries to manage.

Another option is to appoint both a personal trustee and a professional management company. This is sometimes called a hybrid set-up, where a personal trustee oversees the professional trust management service.

Who Should Be Chosen As A Personal Trustee?

A trustee appointment should not be given as an honor. This is a job, and the protection of your assets should be of the utmost importance. The family member or friend you choose should ideally have at least a little experience in the financial industry. You don't want to choose an overseer who has no idea what they are doing. Once you have someone in mind, you will need to speak with them to ensure they even want the responsibility. Experts recommend against appointing a trustee who is also a beneficiary.  


Money Management Tips for Parents

My wife and I both had very successful careers when we had our first child, so I never expected to struggle financially after we had her. Things were great for a while, although raising a child was a bit more expensive than we expected. Unfortunately, I ended up getting laid off from my job and that is when money got really tight for us. The silver lining was that we really saved on child care expenses while I was laid off. While I am finally now working again, raising a child on one income was a struggle and we learned many budgeting and money management tips and tricks along the way that helped keep us afloat financially. I decided to create a blog to share those tips with other parents in similar tough situations. I hope I can help you end your financial struggle!


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