There are multiple steps involved in establishing a trust. If you plan to include this option in your estate plan, consider assessing your situation first. You may face significant decisions concerning the trust, such as who can be your trustee.
Some might already have someone in mind who is ideal for the role. Still, it is best to review your options based on your circumstances, your estate’s size and its details. Having a financial institution as a corporate trustee might be beneficial. But you might prefer to give the position to a close family member, such as your spouse, child or sibling. When naming someone as your trustee, it is best to use the role’s responsibilities as basis, including the following:
- Managing assets, overlooking investment decisions if needed
- Administering the distribution of the trust’s earnings and assets after your death
- Accomplishing all trust-related tasks, such as tax duties, recordkeeping and other obligations
- Maintaining paperwork relevant to the trust
- Communicating with the trust’s beneficiaries adequately
A trustee could have significant authority over your assets, but they also hold countless responsibilities before and after you pass on. If you intend to name a relative for this role, evaluate whether they are a good fit. These tasks may take considerable time and effort, making them detrimental for those with significant responsibilities at home or work.
Knowing what your estate needs
Estate planning can be complex, especially if there are unique circumstances that require unconventional solutions. The same is true when making decisions concerning your trust. Instead of proceeding based on how others usually do so, you might need specific arrangements that fit your estate’s needs. Under these circumstances, it might be best to seek legal counsel before finalizing your trust’s arrangements. Doing so could help you make better decisions that can help avoid issues in the future.