Often at times, many people usually assume that Estate planning is only for the rich. This, by a long distance, is one of the weirdest misconceptions flying all around. Estate planning is something anyone can and should do. You can be as rich as Elon Musk before planning your estate.
The uncomfortable truth is that we are all going to die one day. Therefore, if you are married and have kids, the most sensible thing would be to leave something for them after you have passed on, which is where estate planning comes in.
As a property owner and a parent, leaving part or all of your properties for your kids/spouse is one of the best decisions you will ever make. Aside from the fact that it will put them in a great position for what is to come in the future, it will also ensure that there is no misunderstanding in the family about who should get your property after you have passed on.
Estate planning can come in different forms; it can be in the form of a Trust or Will. Although many people often confuse the two concepts, they are very different. However, irrespective of your preference, both aim to cater to your needs.
If you are unfamiliar with the concept of Trust and who a trustee is, this article is just for you.
Who Is a Trustee, And What Are Their Responsibilities?
Simply put, a trustee is someone a property owner legally appoints to act as custodian of the assets held within a trust. The duty of a trustee doesn’t end with managing another person’s property. He or she will also be responsible for administering a Trust’s finances under the instructions given. Also, the trustee would be responsible for distributing funds to beneficiaries named in the trust. He or she will also be responsible for recording all the transactions during his trusteeship period.
Other duties and responsibilities of a trustee include
- Ability to act as fiduciary when need be.
- They must also understand the terms and everything included in the Trust. This goes a long way in ensuring the safety of assets.
- As a trustee, you can invest the assets when necessary
- In addition to all these, a trustee’s other responsibilities are keeping track of all the records and preparing tax-related forms/filings.
- And lastly, a trustee must always communicate with the beneficiaries. And they must also be ready to answer questions from the same beneficiaries.
It should, however, be noted that anybody can act as a trustee. It can even be the person that creates the Trust. What we are saying here, in essence, is that as a property owner who is about to create a Trust, you can as well name yourself as the Trustee. The only thing is that you will only be considered a trustee for the period that you are alive. If you, unfortunately, pass on, that responsibility will fall on another person you already named in the Trust (successor trustee).
How to Choose the Right Trustee
The bitter truth is that choosing the right Trustee can sometimes be daunting. The process is usually considered daunting because of the pressure you are likely to face before choosing someone to act as your trustee.
Therefore, this section will show you who can be your trustee and, most importantly, how to choose the right one.
But before we go ahead, we need to say this; A trustee is something you can trust. It necessarily doesn’t have to be your family member. The only criterion is that the person has to be over the age of 18.
Friends/Family:
This, to a large extent, is where many property owners pick their trustees from. A family member or a family friend is someone that will understand the family better. They know and understand every single person in the family. In fact, we have noticed that many property owners that use their friend or a family member as their trustee often experience peace of mind. However, how good as this sounds. It also comes with some problems. For example, using a friend or a family member as the trustee can lead to full-blown resentment in the family.
Hire a Trust Company:
Hiring a trust company is the easiest way to deal with the trusteeship issue. If you live anywhere around the United States, some companies are recognized by the law that you can hire to help you assume the role of the trustee. Although they cost a lot of money, when you hire them, they hire professionals who have dedicated all their lives and energy to do what they do best; represent your interests after you are gone. One disadvantage of this is that trust companies are rare. Plus, they are sometimes very difficult to deal with.
Hire a Professional Lawyer/Attorney
If, perhaps, you consider it too risky to use a friend or a family member as the trustee, another great option is to hire a non-partial third party to assume the role of a trustee. This third party could be your lawyer or a reputable attorney around you. Appointing a personal lawyer as your trustee comes with great benefits. For instance, if you have had a long-standing relationship with your lawyer, he must have known your family and the beneficiaries. Hence, this will ensure that the lawyer act on behalf of you without partiality.
