Choosing Your Trustee
When you create a trust, either now or to take effect under your will, whom do you
want to choose as your trustee?
One or two individuals may come to mind. Literally, they are people whom you can
trust. And choosing someone whom you trust is essential. These potential candidates,
however, must possess other qualities just as important as trustworthiness.
The responsibilities of a trustee
To understand what these qualities are, you need to have an idea of the complex
duties that a trustee must shoulder. Here, in order, are the key responsibilities
of a trustee:
• Initial steps. Study the terms of the trust and review the trust agreement or
will. Accept trusteeship and take control of the assets. Meet with the trust’s creator
or beneficiaries to determine income and principal needs.
• Begin administrative duties. Transfer assets to the trust’s name and set up records.
Inventory assets and record tax basis and acquisition dates of all trust assets.
Determine adequacy of property insurance.
• Undertake recordkeeping responsibilities. Collect income from investments and
reinvest proceeds of matured investments. Record details of all investment income
and principal receipts and disbursements.
• Act as investment manager. Establish appropriate investment strategy. Monitor
investments and make appropriate changes. Review the trust assets regularly for
quality and performance. Supervise business and real estate interests.
• Carry out duties to beneficiaries. Remit income regularly and send detailed income
and principal statements. Exercise discretion in advancing principal amounts to
beneficiaries, if needed and permitted by the terms of the trust. Pay for support,
education and medical needs of beneficiaries, if required.
• Attend to tax issues. Keep records of taxable income and adjusted cost basis of
assets. File fiduciary income tax returns and furnish data for the beneficiaries’
tax returns.
• Monitor own performance. Submit actions to independent audit and examination.
Seek legal counsel when necessary. Do not delegate authority. Avoid any conflict
of interest.
• Distribute trust remainder. Determine proper time for partial and final distributions.
• Calculate proper share for final distribution to each beneficiary. Provide accounting
and tax data. Arrange for transfer of the trust’s assets.
What do you want in a trustee?
As you can see from this list, it’s highly unlikely that one or even two individuals
could be capable of carrying out all these responsibilities effectively. Any individual
whom you have in mind might prove talented in many of these duties but surely will
be, at most, a talented amateur.
Several other criteria should guide you in making your choice. You want longevity
and availability. In other words, your trustee should be someone who will last as
long as your trust does and won’t be distracted by illness, business or vacations.
Have you considered choosing us to serve as the trustee of your trust? Here are
some of the important benefits that we offer:
1. We retain an experienced staff. A professional trustee should be highly trained
and know how to work with people.
2. We have the specialized knowledge. A professional trustee must have a depth of
knowledge about investments, taxes, accounting and sophisticated recordkeeping.
3. We offer unbiased investment judgment. A professional trustee should have no
stake in the investment activity of any trust while serving as trustee.
4. We remain impartial. A professional trustee should remain uninvolved in family
conflicts and not favor one beneficiary over another.
5. We are financially responsible. A professional trustee should possess substantial
capital and financial resources to stand behind all actions and decisions.
Call upon us
Choosing the right trustee is a critical aspect of your financial and estate planning.
When you name us to serve as trustee, you have the security and peace of mind that
your instructions will be carried out according to your wishes and that your beneficiaries
will receive what you want them to receive, as well as how you want them to receive
it. We would be glad to tell you more about our services. Contact us now for more
information.
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