by Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193
Many of my clients have asked me, “Who should I name as my Trustee? Should I name a family member, the trust department of a local bank, or an independent trust company?”
A trust is created to last many years for the benefit of people you select. It is hard to predict how the world will change over the life of the trust. Laws may be different in a few years and investment strategies come and go. Because of this, it is to your benefit to select a trustee who will supervise the trust assets in the way you intend.
In some cases the grantor will serve as the trustee of his or her own trust. If you have a revocable trust, and serve as the trustee, your service ends when you become incapacitated or when you die. If you create an irrevocable trust then you must usually name someone else to serve as a trustee. In most cases, at some point, a person other than yourself will serve as trustee.
A trustee has several responsibilities. The main responsibility is to interpret and carry out the grantor’s instructions. Such interpretation should be done impartially and without any conflict of interest. Some other responsibilities include:
· Meeting the needs of the beneficiaries
· Making sure that the trust assets are secure
· Preparing accountings for the beneficiaries
· Maintaining records
· Filing tax returns
Since it is an important job, you should select a trustee that you believe will take the proper care needed in order for your trust to function properly. An individual may not have enough time available to properly address all the needs of your beneficiaries. A local bank may be subject to unfavorable state regulations which do not offer the best environment for investing or reporting the trust assets, or worse still, the local bank may merge with or be purchased by another bank. A professional trustee in another state may have favorable regulations, but may not understand your wishes due to a lack of local connection.
Individuals, banks, and professional trustees each have positive and negative aspects. Your ultimate trustee determination relies most upon your confidence that the trustee you choose will follow your wishes.