More than likely, you will discover that one of the most important and challenging decisions you will make during estate planning is choosing the individuals who will represent your interests. If you decide that a trust will do that best, you will need to choose a trustee.
Of course, you should choose someone you trust and who is willing to do the job, but you also need to consider other factors as well. This article explores some of the potential problems that could arise during trust administration that you may want to consider before appointing a trustee.
You can remove and replace a trustee
Just because you chose someone to serve as your trustee does not necessarily lock that person into the position. Under certain circumstances, the court or the terms of your trust could remove and replace him or her. When considering who should fulfill this role, you may want to think about the following:
- If you appoint co-trustees, will they get along? While you may choose people with some differences in how they view things, they still need the ability to come to a resolution in order to fulfill their duties, and if one of the trustees does not get along with the other, he or she may be removed if it inhibits the effective administration of the trust.
- Is the person you choose willing to work for the best interests of the beneficiaries? If not, then he or she may not be the best choice.
- The person you choose does not have to work alone but does need to make sure the funds and/or assets in the trust receive proper handling. Your trust in an individual may not mean anything if he or she does not know how to manage the trust assets or at least knows how to find someone to help do so.
- If the trustee refuses to provide information the law entitles the beneficiaries to, it would more than likely cause problems between the parties.
- The person you choose must have the capability to make good decisions and effectively carry out his or her duties.
- Is there any possibility the trustee would misappropriate or mishandle funds in the trust for his or her own personal gain?
Depending on how you answer these questions or address these concerns, you could change your mind regarding the person you believe would best serve as trustee. This is an important decision, and you should feel free to look at the potential shortcomings and negative aspects of him or her. It doesn’t mean you don’t trust that person, it simply means that you want to explore all potential angles before putting him or her in charge of your assets and decisions that will affect your beneficiaries for years to come.