When you create a trust, you choose someone to be the trustee of your trust. This trustee follows your trust’s provisions and administers your trust property. Your trustee pays bills and taxes, manages your investments, buys real estate, and other actions needed to protect and increase your assets.
The Key Takeaways
- You can choose yourself as the trustee of your revocable living trust, and your spouse can be a co-trustee.
- You cannot be the trustee of most irrevocable trusts that you can create.
- You may not actually be the best choice to be trustee of your trust.
- You can choose anyone to be your trustee, even a professional trustee or a bank trust department The most important qualification is their trustworthiness.
- Naming your successor trustee as a co-trustee is a way to introduce your trustee to your trust, how you want it to be run, and you can make sure your successor trustee can manage your trust.
Who You Can Choose to Be Your Trustee
You can choose yourself to be the trustee of your trust, and you can choose your spouse as co-trustee of your trust. This makes the management of your trust the easiest if something should happen to one of you, whether incapacity of passing away. Most couples will have a joint trust, thus owning all their assets together.
Even though most people choose themselves as trustee, you do not have to do so. You can name an adult child, a trusted friend, or someone else you trust. Again, trust is the best qualification, but there are others to think about. Experience, investment skills, and record-keeping skills are other things to think about. You may find that your situation calls for a professional trustee. Even if you name someone else as trustee and not you, that does not mean you have lost control. Your trustee must act for your benefit and report to you. You can even replace your trustee if you want to.
When to Consider a Professional or Corporate Trustee
If you are older, a widow, worsening health, or no one trustworthy living close to you, you may need or want to choose a professional trustee. There are other situations as well, such as not enough time or skill to manage your assets, or your estate planning is more advanced and you cannot be the trustee of your own trust. Professional or corporate trustees have extra skills, abilities, and time needed to administer your trust.
What You Need to Know
While all trustees are entitled to some amount of compensation, a professional trustee will generally receive more compensation because of their specific skills and abilities.
Actions to Consider
- You need to be honest with yourself on whether you should be your trust’s trustee. You may not be the best option to manage everything, and you may trust someone else enough to manage your assets for you.
- You may decide that you want to name a co-trustee with you. This is a great way to introduce your trust and vision to the person who will succeed you as trustee. It will also give you the chance to see if your successor trustee is up to the job; if not, you can name a different co-trustee and successor trustee.
- You must be careful and realistic as you decide who will be your trustee.
- If you are thinking about choosing a professional or corporate trustee, you need to interview several so you can get a good understanding of what they offer you, their services, investment returns, and fees.