3 factors to consider when choosing a trustee

On Behalf of | Sep 10, 2021 | blog, Estate Planning

If you have a substantial estate, want to provide for a relative who has a disability or seek to avoid some tax liability, setting up a trust may be an integral part of your comprehensive estate plan. While you must be certain to comply with legal and technical requirements, naming the right trustee is equally critical.

Not only does a trustee oversee the trust, but he or she also has a fiduciary obligation to advance the objectives of the trust. Considering the following three factors may help you choose the ideal trustee for your type of trust.

1. The location and nature of the assets

If the assets fall within the jurisdiction of state law, it may be important to find a trustee who has familiarity with the laws of the state where the assets are. This may be particularly true if you place real estate into a trust.

2. The level of expertise

Managing a trust often requires a working knowledge of accounting, investing, recordkeeping and taxpaying. If you have a complicated trust, you may need a professional to serve as the trustee. Otherwise, you should be certain your trustee has the knowledge and expertise to manage the trust in a legal and financially responsible way.

3. The relationship to the beneficiaries

If your trust benefits your relatives or other loved ones, the trustee should have a good relationship with its beneficiaries. After all, the trustee may have to deny disbursements, enforce trust restrictions or take other controversial actions.

Ultimately, because a good trustee may make a considerable difference in the success of your estate plan, devoting some time and effort to choosing the right one is a good way to cement your legacy.