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Three tips to help choose a trustee

On Behalf of | Sep 16, 2022 | Estate Planning |

Putting together an estate plan is important for many reasons. In addition to helping better ensure assets are distributed according to your wishes, the estate planning process can also help you reach your financial planning goals.

For many, this can include the use of a trust.

Trusts are legal tools that can serve a variety of goals, including but not limited to growing investment assets held in trust, shielding assets from creditors, and dividing assets between disgruntled family members. For these reasons, it is important to select the right trustee. Those who are trying to find the right person to fill this role should consider the following.

#1: What traits are important in a trustee?

First, put together a list of traits that are important. Clearly, a trustee should be trustworthy. But this is only one of the characteristics that make for a good trustee. It is also beneficial to choose someone with some financial acumen and the ability to make difficult decisions.

#2: Does this person have the experience and time needed to do the job?

A trustee must do more than just sign off on the trust and make sure the distributions move forward as outlined in the trust documents. They have many duties including the need to file tax returns and provide regular statements. A failure to complete these responsibilities can lead to fines and, depending on the details of the failure, even result in personal liability.

#3: Should I use a professional?

There are situations where having a professional trustee makes sense. Examples can include complex estates or complicated family situations. As noted above, a failure to follow the expectations that come with trust management can result in personal liability. Professional organizations often have insurance that can help safeguard both the trustee and the beneficiaries.