When it comes to appointing a trustee, there are a few things you may want to consider.
While choosing your closest friends or family members may be your initial thought, these considerations can help you determine if they are the right fit.
Are they good with money?
The purpose of a trustee is to manage the assets in your trust according to your wishes. If your close friends and family members are not good with their own personal money, your trust could suffer under their control. According to an article on Forbes.com, family members who live from paycheck to paycheck may not be the best choice for a trustee.
Do they have family biases?
In addition to being smart with money, your trustee should avoid family biases. It is crucial for them to treat your heirs fairly. For example, if your trust allows heirs to receive loans from the trust, your trustee should extend that privilege to all beneficiaries. Lending money to one heir but not another may create problems within the family and could cause resentment.
Are they trustworthy?
Although this may seem obvious, you will want to choose a trustee that is honest. They will be responsible for managing money and it is essential that they abide by your wishes. This includes either taking a fee for their services or not. If you think family members may misrepresent your wishes, it is best not to choose them as trustees.
For some people, it is easier to choose a fiduciary service instead of friends or family members. While they may cost more in fees, it is generally worth the peace of mind that they can bring. Not only are these unbiased parties, but contracts also legally bind these service providers to uphold your wishes.