Any adult aged 18 and older should consider creating a comprehensive estate plan. It does not matter how much wealth you have or if you have a family, although having children and a spouse definitely does merit an even greater need to establish an estate plan if one has not been made. Estate planning is so significant because most people want to know that when they pass on, what they have amassed in their life will go directly to the beneficiaries they intend their wealth and assets to.
Not all estate plans are the same, and each individual has their own considerations that will be used to figure out the most appropriate plan to put in place. Many different estate planning tools can be utilized to accomplish one’s goals. And, once an estate plan is made, its terms are not set in stone. Estate plans can and should be updated regularly. Typically an estate plan should be revisited every three years to five years when life is banal. When significant life events spice things up, like the birth of a child or a marriage occurs, then these are reasons to quickly update your estate plan.
Of the different types of estate planning methods that may be used, trusts are common. With trusts comes the need to name trustees. For more information on trusts and trustees, the estate planning attorney at David E. Anderson, PLLC, explains more below.
What is a Trustee?
When a trust is made, the individual responsible for managing it is called the trustee. In some cases, the trustee can be named and be another party other than the person who created the trust from the start. In other situations, the person who made the trust will be the trustee, and then upon their incapacitation or death, a second individual will come in to serve in the role of the trustee.
Being a trustee is a big responsibility. There are many considerations regarding the work that needs to be done and the personal ethics that are necessary. The trustee must be someone who will act in the interests of the trust and will abide by its terms.
What Responsibilities Does a Trustee Have?
Picking a trustee is a serious decision. One would be wise to take time to really think about who would be the best and most capable fit for the role. There are several responsibilities that a trustee has. Additionally, a trustee should also be an individual that should be honest with a high moral character.
Some of the duties a trustee has include the following:
Management and distribution of money in the trust.
Ensure that the trust terms are fully understood and that assets are protected.
If there are opportunities to use the wealth in a trust and make it grow, then the trustee should consider smart investments.
Lead Decision Maker
Discretionary decisions, where applicable, concerning management and distribution of the trust.
Keep and organize all documents related to actions that happen within the trust. Also, take care of tax-related requirements.
Communication with Beneficiaries
As a lead manager of the trust, a trustee must communicate with beneficiaries and provide information and resources as necessary.
Special Needs Considerations
Trustees that take care of a special needs trust for disabled individuals have an even greater job with respect to taking care of the trust’s beneficiary. Here supporting the individual based on their particular needs is essential. So, finding appropriate housing, inquiring about potential means for enrichment activities like volunteerism or employment, finding possible ongoing learning institutions, staying abreast of assistive technologies, and more are all important and necessary actions for a trustee in this position.
Choosing the Right Trustee
Understanding a trustee’s critical role can make choosing the right one feel like quite the task. And in reality, it is a hugely important decision. Listed below are some things that could help you with your decision.
Who Could Be Named Trustee?
- A competent and willing friend or family member may be a good choice due to their intimate connection with you and your beneficiaries. You know these individuals the best, and their relationship with you could guide them to always err in favor of what is in line with your wishes and best for beneficiaries.
- Sometimes, a loved one does not have the capability to handle the job of being a trustee. Here, an attorney may be named. Or, there are no close loved ones to choose from. A lawyer could be an excellent alternative when family or friends are not viable.
- It is possible to hire a trust company for professional trustee services that will stick strictly to the guidelines outlined by the trust.
What Qualities Should You Look For in a Trustee?
Ultimately, what you want is the most appropriate party for taking over a trust when you can no longer do so yourself. So, finding just the right individual is key. Some qualities that a reasonable trustee will have are:
- A solid history of making responsible sound decisions.
- An understanding of finances and a history of intelligent budgeting and financial planning.
- A commitment to truth and doing what is right.
- A multi-tasker.
- A clear communicator.
- An individual who wants to take on the role or a lawyer/company with a proven track record of success and positive reviews.
Speak to an Estate Planning Attorney in North Carolina Today
At its core, a trustee’s most tremendous responsibility is their fiduciary responsibility. Though, a trustee’s full role can be pretty versatile and multi-faceted.
For help with trust administration and all your estate planning needs, please do not hesitate to call the North Carolina estate planning lawyer at David E. Anderson, PLLC, today.