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Can you trust your trustee?

On Behalf of | Sep 29, 2022 | Firm News |

When you plan your estate, you make many decisions. You also designate people and businesses to provide services for you, like healthcare proxies, power of attorneys, guardians, conservators, executors, trustees and more. Each designation has its own set of qualifications, and the trustee is no different. Though, who you select as your trustee may not be the same person or business you select for the other designations, and that is for good reason.

Friends and family are important, but not always useful

Chances are, you relied heavily on your friends and family to take many of these positions within your estate plan. And, the most trusted one of all, you likely gave the executor position. This person is in charge of your entire estate. However, unless this person is a professional trustee, they likely should not be both.

What is the difference?

While both a trustee and executor have specific legal and reporting requirements, including with the IRS, the executor is a temporary position that can be assisted by an attorney. On the other hand, your trust’s trustee is a job that may last longer than any one person, like with perpetual trusts. In addition, the help of an attorney as an executor should be a built-in cost.

A trustee is responsible for the maintenance, upkeep, building and bequests of the trust. This means that, in addition to the legal, reporting and documentation requirements, they may also need experience with stocks, bonds and money management, and have an impartial and reasonable decision-making prowess. Should your executor also be your trustee, they would need to hire multiple people, which likely cannot be reasonably budgeted for without negatively impacting the trust and the trust’s assets.

You need to trust your trustee

Whoever you designate as your trustee, make sure that person or business has the skills, resources and ability to deserve your trust. It is OK to search for the right one, comparing their experience, comprehensive price, client reviews and liability protection. And, your Texas estate planning attorney can likely help, either as a trustee or in selecting an appropriate trustee.