Estate Plans come in different shapes and sizes, but if there’s one thing we know, the process is not one-size-fits-all. Estate Planning is something everyone should do, not just the very wealthy. Without a legal plan, you’re leaving your entire legacy in the hands of the courts.
That’s why Saanichton Law Group is dedicated to removing the confusion of Estate Planning with customized plans to fit your desires. Whether you need a full-blown Trust with an appointed Trustee or a basic will, we’ve got you covered.
If you’re unsure what a Trust or a Trustee is, you’re in the right place. Keep reading to learn more.
What is a Trustee?
A trustee is a person who holds property in Trust for the benefit of someone else. The beneficiaries of the Trust can be individuals, groups, or even organizations. Trustees are typically appointed by the grantor, which is the person who creates the Trust. Often, the person who creates the Trust is the Trustee until they can no longer fill the role due to incapacitation or death. At that point, a Successor Trustee takes over. Trustees have a legal duty to manage the trust property in accordance with the terms of the trust agreement. This includes ensuring that the beneficiaries receive the benefits they are entitled to and that the trust property is well-maintained. Trustees also have a fiduciary duty to act in the best interests of the beneficiaries. This means they must exercise care and prudence when making decisions about the trust property.
Who Can Serve as a Trustee?
Friends/family
When choosing a trustee, the grantor often selects a spouse, friend, sibling, or adult child as the Trustee. After all, the grantor knows and trusts them well, and they’ll understand the family dynamics. This is a common route, but it also comes with the potential for family drama and even resentment from other family members. It’s crucial to ensure they are willing to take on the task.
Attorney/Lawyer
An attorney or professional fiduciary is another popular option, as they are experienced in handling trusts and will be unbiased when making decisions. This is often a good option if you don’t have a close family member or friend to assume the role. However, it’s important to note that an attorney or professional fiduciary will charge a fee for their services. This can provide peace of mind for the grantor, knowing that their Trust is in good hands.
Trust Company
Hiring a Trust company can be an excellent solution for many reasons. It can be well worth it if you anticipate any contention amongst beneficiaries. A Trust company can take a stern approach to your estate, saying no when necessary. They will also safeguard your legacy as they see fit per the discretion and guidance of the Trust. However, it is essential to note that removing a Trust company as your Trustee can potentially be difficult.
Trustee Duties & Responsibilities
- Act as a fiduciary: The Trustee is held to a high standard of care in safeguarding the trust assets and must always act in the best interest of the beneficiaries. Some even feel that a Trustee should pay more attention to the Trust than they do their own personal accounts.
- Understand the terms of the Trust and ensure the safety of assets: The Trustee must keep track of all assets to maintain asset safety. They should also know who all the beneficiaries are. Additionally, they must have access to and review all the records to ensure they’re in order and accurate.
- Invest assets when necessary: The Trustee can invest trust assets when it’s necessary to grow the account if the Trust dictates. This can include stocks, bonds, real estate, and more.
- Administer the Trust: This is an essential duty of the Trustee. They are responsible for ensuring all assets are accounted for and managed according to the terms set forth in the Trust agreement. This includes keeping track of finances, handling tax paperwork, and distributing assets to beneficiaries when the time comes.
- Make ongoing decisions: Trustees must make decisions about how and when beneficiaries receive payment and also decide on other provisions of the Trust. Remember that these decisions are with respect to discretionary powers given to a trustee.
- Communicate with and answer beneficiaries’ questions as needed: Trustees are also responsible for keeping beneficiaries up-to-date on the status of the Trust and answering any questions they may have. This communication is key to maintaining a good relationship with beneficiaries and ensuring that the Trust is being managed according to their wishes.
How Does a Trustee Get Paid?
Trustees are typically compensated for their time and effort in managing the Trust. This compensation is set by the terms of the trust agreement and is paid out of the Trust’s assets. Occasionally (though not often), the Trust will define the compensation amount. In some cases, a trustee may waive their right to compensation.
Understanding the responsibilities and roles of a Trustee is key for the job to be well done. This ensures that anyone taking on the task can perform their duties to the best of their ability.
Choosing a trustee for a trust is a big decision. If you need assistance setting up a trust or have questions about your role as a trustee, contact the Saanichton Law Group today. We can help you navigate the legal complexities of trusts and estate planning. We can help you determine your best trustee options. Call us at 250.544.0727 or email us at info@saanichtonlaw.com to set up a consultation.
