Your living trust is much more than just a document that says which heirs get what percentage of your estate or what items of personal property you leave behind when you die. A living trust details the manner and timing of when heirs are to receive their inheritance, who is to take over any businesses in question, and many crucial issues of your estate. A living trust is very specific in how your estate is to be finalized. Therefore, the choice of a trustee for your living trust is a very important decision in your estate planning process.
Living Trusts: Choosing a Trusted Friend
When choosing a person to be the trustee of your trust, you need to answer this central question:
- Who could step into my place and confidently act as I would in carrying out my wishes?
It is vitally important to choose someone you have full faith and confidence in. You should sincerely believe that he or she would carry out your directives as they are written in your estate plan. Some typical choices to serve or trustee include a:
- Close family friend
- Close family member
- Child
- Professional trustee
While you may feel completely secure in trusting this huge responsibility to a family member, there are several situations when that is not the best choice possible. In that case, your trustee should be outside an independent trustee.
Living Trusts: Choosing an Outside Trustee
If you do not have a close friend or relative you feel comfortable giving this job to, or if selecting one of your heirs will cause conflict, then there are other options. You can hire an outside trustee like:
- A banker
- A trust company
- A lawyer
- A financial advisor like an accountant
These professionals are well versed in the requirements of being a trustee and can work more effectively, which saves your heirs money and time. While there are some benefits to not having a family member involved as the trustee of your living trust; there are also some drawbacks to using a bank or trust company as your trustee.
- Rigid formality and corporate formalities
- Higher fees
- Minimal estate requirements of around $700,000
No matter whom you choose, you want to be sure you have full confidence in them to do exactly as you want, no matter what other people say. There may be heirs who are unhappy with the terms and conditions of the trust and will try to sway your representative to do as they want. Knowing that you have a strong, trustworthy individual protecting your wishes will provide peace of mind.
If you are looking for additional details on this topic or if you require advice about your situation, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Trust Attorney