Most of our Estate Planning clients come in with a good idea of how they want their estate to be distributed upon their deaths. If they have children, the assets and property are usually divided between them. If they don’t know this already, they soon learn from us that the best way to do this is usually by establishing a Revocable Living Trust and naming their children as beneficiaries.
However, where many clients struggle to make a decision is over when their children should get the assets and who should be responsible for distributing them. In other words, they have a hard time deciding on the terms of the Trust and naming a Trustee. In fact, many people struggle so much with who to name as the Trustee that they avoid finalizing the Trust for years. As we all know, life is very unpredictable, and putting off this decision could be disastrous. Here, we discuss the responsibilities of a Trustee and offer some advice for choosing one for your Trust.
What Does the Trustee of a Revocable Living Trust Have to Do?
The role of a Trustee is similar in some ways to the role of an Executor of a Will, but depending on the terms of the Trust, the job can go on for much longer. The Trustee of a Revocable Living Trust holds legal title to the Trust property and, therefore, owes a legal obligation to act in the best interests of the beneficiaries. Beyond that, the Trustee’s jobs include:
- Distribution. The Trustee is responsible for distributing Trust assets and property according to the terms of the Trust. In many cases, Trust assets are distributed gradually over a period of time. This is especially true if the beneficiaries are minors or young adults. In these situations, the Trustee could be in charge of Trust assets for many years.
- Administration. Over the course of those years, the Trustee will be responsible for managing the Trust, paying taxes, and upkeep and sale of any property held in the Trust.
- Investment. If funds are distributed over time, it is in the best interests of the beneficiaries to grow the funds in the Trust to the extent possible. That means that the Trustee is responsible for taking full advantage of safe investment opportunities.
These are financially technical roles, but Trustees are permitted to seek help with the tasks from an accountant, investment advisor, or lawyer and may use funds from the Trust to pay for their services.
Who Is the Best Person to Be Your Trustee?
You have several options when naming a Trustee for your Revocable Living Trust. A reliable and willing family member or friend who is not also a beneficiary is the first choice for many people. However, along with being trustworthy and financially savvy, the person must be assertive enough to refuse requests from irresponsible beneficiaries and tactful enough to handle family drama and conflict.
For example, if the terms of your Trust are that until they reach a certain age, your young adult children can only access funds for college tuition, a down payment on a house, or a reason approved by the Trustee, you need to make sure the Trustee will honor your wishes. Sometimes, naming two co-Trustees can alleviate some of the challenges.
Regardless of who you choose, it is essential that you discuss all of the responsibilities with them ahead of time. It is also important to name an alternate Trustee in case your first choice is no longer willing or able to do the job when the time comes.
Another option is to name a professional, such as a lawyer, financial advisor, or Trust management company as the Trustee. This could be a good solution if you don’t have a reliable friend or family member to appoint, and the Trust will be distributed all at once; however, if your Trust is designed to distribute assets over many years, this can be very costly.
Are You Looking for a Revocable Living Trust Attorney in Texarkana, TX?
If you are looking for advice about creating a Revocable Living Trust and naming a Trustee, you need to speak with an experienced attorney as soon as possible. Contact us online or call our Texarkana office directly at 903.223.5653. We also have offices in Tyler, Paris, and Longview, as well as Magnolia, AR!