Do You Really Trust Your Successor Trustee?
In your estate planning who you pick as the successor trustee of your family trust is an important decision that shouldn’t be taken lightly.
A trustee is the manager of the instructions, contained in a family trust. During your lifetime, the grantor (person creating the trust) usually will be the trustee of his or her own trust. However, upon the grantor’s disability or death, a successor trustee must take over to carry out the grantor’s wishes.
This is a fiduciary responsibility, which means the successor trustee will be held to a very high standard of care and his or her acts may be scrutinized by others, to the point of being sued for a breach of this fiduciary duty.
Therefore, it’s very important to pick the right person to fill any fiduciary responsibility including: a trustee; personal representative; an agent under a financial power of attorney or medical power of attorney; a guardian and conservator of a disabled adult or minor child.
Serving in a fiduciary capacity, a trustee has a specific duty and responsibility to the beneficiaries of a trust to follow the terms of the trust laid out by the grantor under the laws by which the trust is governed.
So the question must be asked, do you really trust your trustee? Do you trust your trustee to follow all your instructions under the trust regardless of whether such instructions adhere to the trustee’s personal opinions and beliefs?
Do you really trust your trustee to communicate with all beneficiaries of the trust in regular and precise manner to limit and reduce family contention and the possibility of a trust contest?
Do you really trust your trustee to treat all beneficiaries of a trust in a fair and equal manner and not play favorites?
Do you really trust your trustee to not go on a power trip, or to not have a polarizing attitude of “my way or the highway,” just because he or she was put in charge of disabled or deceased person’s affairs?
Do you really trust your trustee that he or she will seek professional guidance and support of qualified CPAs, attorneys and financial advisors to make the right decisions pertaining to your legal, financial and personal affairs?
If your answer is no to any of these questions, then it’s imperative that you meet with your estate planning attorney to discuss alternative solutions and instructions that will better ensure your affairs are dealt in the best and most economical way possible.
So, who should you pick as a trustee or other fiduciary? This is a very important question that should be discussed at length. Regardless of who it is, you should not choose a person because he or she is the oldest child, or lives the closest to you, or is the most educated.
You should choose a trustee or other fiduciary based solely upon his or her ability to follow your directions, work and communicate with others, is honest and able and willing to receive professional advice in fulfilling his or her fiduciary role on your behalf.
If you have any questions regarding family based estate planning or any other legal issues, please call the attorneys at Rowley, Chapman & Barney, Ltd. (480) 833-1113.