Are you or your family beginning work on trust planning in Sacramento, CA? An essential part of this process is selecting a responsible trustee you can rely on. This post will address how to choose the right trustee for your needs, but first, let’s look at some basic terminology.
A trust is a fiduciary relationship in which one person provides another—known as the trustee—with the right to maintain title for property or assets for a beneficiary (a third party). These relationships are common during the estate planning process and help ensure that your assets are distributed accurately to the parties that you have specified.
How Do I Choose a Trustee?
Choosing a trustee is a decision that may require careful thought. First and foremost, you should select someone who will be responsible in their position of power. Here are some tips on identifying such a person:
Has the person you’re considering already shown they’re responsible? Maybe your potential trustee has a history of managing other financial matters responsibly or of being conscientious in seeing other large tasks through and making careful decisions. This is a good sign.
An additional sign that your designated trustee will be able to actively and successfully manage your trust is that the person makes a point to stay up to date on other important paperwork, policies and legal matters they are involved with.
Has the person made important decisions in an objective way? Your trustee should be able to separate their personal feelings and relationships from their role as a trustee and make logical, clear decisions that are best for the trust.
Does the person communicate well? You want a trustee who is prompt in addressing any issues or questions about the trust and who can articulate the necessary information to you and other involved parties in an easy-to-understand manner. Previous experience serving as a liaison in formal or informal capacities may be helpful here.
In addition to feeling generally comfortable with your trustee, you should feel comfortable communicating openly and honestly with this person.
Does the person fully understand all nuances of the trust? This person should be well versed in understanding your wishes and in navigating the terminology and procedures related to the trust. If they receive new information or are not clear on something, you should feel comfortable that they will take the time to do the necessary research or ask the relevant questions to find out what they—and you—need to know.
Does the person take the trustee role seriously? You should seek a trustee who understands how important it is to you—and your beneficiaries—that your wishes be carried out correctly. This person should treat both you and the trustee role itself with respect.
As you work to identify the appropriate trustee for your needs, contact our team of knowledgeable professionals at Yoder & Company, CPA. We can work with you and your trustee at the beginning stages of this arrangement and throughout the trust management process. We are here to help you demystify and manage your trust planning needs in Sacramento, CA.