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Choosing the right trustee is key

On Behalf of | Oct 6, 2022 | Estate And Trust Administration

Choosing the right trust is challenging. There are many considerations to effectuate what you want to happen after your death. Trusts give you so many options. However, what is often overlooked until the end is who will be your trustee, the person who makes sure what you want to happen actually happens.

The best drafted trusts are still just paper

A trust is not a living thing. At the end of the day, it is just paper containing instructions, and a holding entity for your assets. Without a proper and trusted trustee, your trust will implode. This is why your trustee is such a crucial decision.

Family or friend vs. a professional or trustee entity

Most people have that one person in your friend or family circle that everyone goes to for advice. Perhaps, they are a lawyer or a financial professional. And, you may think this person would be a great trustee. The problem is that trusts have specific legal requirements that require experience, and unless your friend or family member is a professional trustee, a friend or family member is usually not a good idea.

An ability to make complex decisions

Another consideration is whether your Pittsburgh, Pennsylvania, trustee can make tough decisions and interact in the best interests of your beneficiaries. If someone develops a drug or alcohol problem, can the trustee be trusted to say no? Can the trustee be trusted to find a treatment facility, or would they even think to do this? These types of demanding situations are another reason why a family or friend is generally not a good idea.

Budget

First, figure out a yearly budget that your trust can afford. Be realistic and not overly optimistic to ensure that your trustee cost does not negatively impact the trust’s financial viability for its intended purpose.

Second, get the comprehensive costs of available trustees and providers. Some will only give you the trustee fee, but this may not be all inclusive. To properly compare trust options, you need to know the costs.

Experience and knowledge

The IRS has strict filing requirements for trust, as do many states. There are also reporting and accounting requirements, which must be dutifully followed. If not, your trust may be liquidated by the IRS or your Pittsburgh, Pennsylvania, beneficiaries may need to sue the trustee to ensure compliance.

Pennsylvania Bar Association

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