When you create a trust, you must appoint someone to manage its assets ( a trustee). They will administer the trust and distribute proceeds to the beneficiaries according to your wishes.
While a trustee is legally obligated to always act in the best interests of the trust and its beneficiaries, it is not always the case. Instances of trustees mismanaging trust assets or abusing their role, leaving trust beneficiaries in financial ruin, are commonplace. This explains the importance of making the right choice when picking a trustee.
The qualities to look out for
When choosing a trustee, look beyond close friendships or existing family relations. Yes, you want somebody you can trust to fulfill your wishes, but are they qualified enough? Do they have what it takes to take charge and make decisions that will protect your loved one’s interests?
Some of the qualities to look out for include the following:
- Honesty
- Decisiveness
- A willingness to commit and fill the role
- Impartiality
- Good organizational and interpersonal skills
- Sound judgment
These are just some traits to look out for when choosing a trustee. It is also worth noting that you can have more than one trustee. However, be sure to clearly outline the working relationship of the co-trustees to avoid confusion or disagreements.
Can beneficiaries remove a trustee?
Trust beneficiaries can remove a trustee by following the terms of the trust or through the court upon showing valid reasons, such as a breach of fiduciary duty. For a revocable trust, you can remove them at any time as the grantor or owner of the trust.
Do not leave any loose ends in your estate plans
Your choice of trustee is crucial to ensuring you achieve your estate planning goals and protect your loved one’s interests. If you are thinking of creating a trust for your loved ones, seeking the necessary guidance and understanding your options before getting started is advisable.