For persons interested in establishing trusts to hold some of their assets as part of an estate plan, choosing a trustee will be an important task. Picking the right person or entity that will manage these assets for the life of the trust makes a difference in the operation of your trust and the benefit your trust gives to the beneficiaries.
What Are Your Goals for the Trust?
The best trustee to choose could vary depending on your goals for the trust. If you are forming the trust primarily to remove assets from your estate so that your relatives do not have to go to probate court, you may want to choose a family member or friend as trustee. Alternatively, you might want to select a family member for a trust that will require the trustee to make decisions about distributions to your family members. Relatives are much more familiar with family dynamics than strangers. If you want your trust to provide income that can support a family member in need, you may want a trustee who makes smart investment decisions or has professional investing experience.
You also have the options of choosing a professional trustee or forming a private trust company to manage the trust. Professional trustees include bankers, investment managers, and lawyers, among others, who manage many trusts at the same time. They know which steps to take to best manage the trust and are familiar with trust law. The downside is that the cost of using these professionals can be high.
Which Assets Will the Trust Hold?
You may want to select a trustee who has expertise in managing the particular type of assets you plan to place in the trust. For example, if you plan to place all of your real estate in the trust, you may want to choose a trustee who already knows how to manage real estate. If your candidates for trustee have no experience in real estate, they may need to find and pay for professionals to advise them on real estate matters. This will cost the trust money, detracting from your goals.
How Much Money Is in the Trust?
If your trust will hold a substantial number of assets or assets with great value, you may want to select a professional trustee with experience managing assets. Your trustee will need to invest the assets and try to make them profitable. Many family member trustees do not have the experience or abilities to do this, let alone the time to manage a portfolio. In contrast, a family member may be the perfect choice to manage a small trust with a few treasured family heirlooms and a small amount of money as its assets.
To find out more about forming trusts and choosing trustees, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.