Naming a Trustee

What Qualities Should I Consider in Naming Someone as Trustee?

One of the most important distinctions between a revokable and an irrevocable trust, concerns who will be appointed as the successor or initial trustee. If you are putting together an irrevocable trust, naming yourself as a trustee would defeat the primary purpose of this estate planning strategy. Naming a successor trustee of a revokable trust or a primary trustee of an irrevocable trust, however, requires careful consideration about the person you are choosing to install in this role.Naming a Trustee

There are several important qualities to consider. First, this should be a person who you trust when it comes to their overall judgment and ability to manage your investments. Second, they should also be able to communicate and speak coherently with your beneficiaries. Third, they must understand how to legally transfer trust assets to those beneficiaries when the time comes. Forth, they should be capable of handling what could be complex financial transactions.

Some people choose to use a corporate trustee because the scope of the responsibilities of managing a trust might extend beyond that of a lay person’s knowledge. Appointing professional trustees also requires consideration about the fees that would have to be paid to this professional.

Bear in mind that this could reduce the overall value of assets inside the trust, when funds from that trust must be used to pay a professional trustee. If you have further questions about the estate planning process, schedule a time to speak with an experienced estate planning lawyer in NH.

 

 

When Should I Use a Corporate Trustee as My Successor Trustee?

A successor trustee is the individual or entity appointed to handle trust affairs should you become incapacitated or pass away. If you are not sure that a family member or friend you intended to appoint in the role of successor trustee could handle this responsibility well or you fear that it could only spark further family conflict, you may be able to avoid some of these problems by using a trust company or the trust division of a bank.

No matter who you choose, your trustee should be professional and competent and have good skills when it comes to record keeping and decision making for distributing money to beneficiaries. A professional trustee might make the most sense in your case if you have a trust that is intended to last for a long time such as one that would provide for grandchildren.

Another example when it makes sense to choose a corporate trustee is if you have very valuable assets. In most simple revocable living trusts, however, that are designed for avoiding probate, it might not make sense to pay a professional because professional management in a successor trustee role is expensive.

Many trust companies won’t accept accounts that are below a certain minimum and will charge a percentage of the assets as the fee. Some of the potential downsides of going with professional management might include:

  • Not accepting other kinds of assets beside cash.
  • The management might not be as personal as that from a friend or family member.
  • Beneficiaries might have to deal with new people frequently as bank or trust company employees come and go.
  • Beneficiaries may not get a quick decision when they ask for trust funds since this will need to go through the other entity.

If you need help figuring out how to approach trustee issues, look for a time to meet with our NH trust planning lawyer.

What Is a Trustee Fee?

A trustee is a person who serves in an important role in managing the assets and administration of a trust. This person is also entitled to receive compensation based on their efforts managing the assets and the responsibilities associated with the trust. Trustee fees are payments for services rendered whether the trustee is an organization or an individual. Various duties are associated with the responsibility of a trustee and these duties are clearly outlined in the trust document.

The primary purpose of the trustee is to ensure that the grantor or creator’s wishes are honored when it comes to the trust beneficiaries. This can include distributing assets or payments from the trust to its beneficiaries and handling tax filings for the trust. When creating your own trust, you would typically specify the terms of payment in the trust document itself.

There are a few different ways that you might approach the process of trustee fees, such as a set percentage of the assets in the trust each year or a flat dollar amount each year.

If there are not many duties associated with the administration of your trust, this could lead to a trustee fee arrangement of an hourly payment for the person’s time. You can also establish a limit on how much can be paid out in trustee fees. State laws will determine the fees in the event that you do not document them in your trust.

If you have not yet appointed a trustee or are curious about how to choose whether an individual or an entity should serve in this role? Our New Hampshire estate planning law office is here to support you with these questions and concerns.

Schedule a consultation today with a trusted estate planning lawyer to learn more.