How Do I Choose a Trustee?
When you set up a trust, you must name someone as the
“manager” of the trust—also known as the trustee. The trustee’s responsibilities are
essentially to pay bills and taxes, invest assets wisely, provide for your
loved ones, keep accurate records, and maintain your finances in good
order. These responsibilities are
probably what you are already doing. As a result, you may want to appoint
yourself as the trustee of your own living trust. If you are married, your
spouse can serve as a co-trustee. This
is a good idea since it will provide much needed protection if either of you
Naming yourself or your spouse as trustee is not
required. Often people will choose an
adult child, or a trusted friend or relative.
Being a trustee is a big job with a lot of
responsibility. Trustees are under
strict fiduciary responsibilities and can even be held personally liable for
breaking those responsibilities. As a
result, your trustee should be someone who understands the demands of the job
and is agreeable to taking on the responsibility. Your trustee should also be someone you
Some people overlook the option of choosing a professional
or corporate trustee (like a bank or trust company). Sometimes people think these entities would
be too expensive or cost prohibitive. In
reality, because of their expertise and the resources that are available to
them, they are often able to manage a trust much more efficiently and
effectively than a lay trustee would be able to.
You can also appoint multiple people or entities to act as
co-trustees. This has the advantage of
providing a sort of “checks and balances” mechanism for your trust. However, if the trustees have different
opinions about how to manage your assets, it could result in deadlock, which
would have to be resolved by a court order—costing your estate money.
If you do choose to name someone other than yourself as
trustee, that doesn’t mean you have no control over your trust. Remember, as the creator of the trust, you
make the rules. The trustee is required
to follow those rules. You can even opt
to replace your trustee if you so desire.