Incorporating a trust into your estate plan and choosing a trustee may be the right option for you and your family when you work to create a comprehensive estate plan with an estate planning lawyer. Using a trust can have various benefits, such as ensuring that your assets don’t go through probate. Bypassing the probate process can save your loved one’s time and money during difficult times. Avoiding probate also keeps your financial affairs private, whereas opening an estate in probate court creates a public record.
Furthermore, if you have concerns about your heirs and want to limit their ability to access their inheritance, perhaps based on their age or certain events, a trust allows you to do that. You also can revoke or modify a revocable trust at any time during your lifetime, so if your circumstances change, the terms of your trust also can change, or you can eliminate it if you choose to go in another direction.
Choosing a Trustee
When a person or “settlor” creates a trust and transfers ownership of assets to a trust, they also must choose a trustee to manage and administer the trust. The focus of a trustee is to invest and protect the property and disburse the assets according to the terms of the trust.
Some settlors choose a close relative or trusted family friend to perform this function. However, that person might not always be the best person for the job, especially if the trust involves significant assets and responsibilities. In that case, it may be prudent to consider appointing a professional trustee to administer your trust. Here are five reasons why you might want to choose a professional trustee.
Administering a trust, particularly if the trust contains substantial assets and investments, can be difficult. Therefore, a trustee must have some degree of financial, legal, and tax knowledge or employ professionals with the necessary knowledge. Choosing a trustee who routinely administers trusts helps ensure that your trustee already has the necessary knowledge and working relationships with other professionals to administer the terms of your trust efficiently and properly.
A trust often gives the trustee the right to make discretionary disbursements from the trust as they see fit. If the trustee does not already have relationships with the trust’s beneficiaries, the trustee may be able to view any requests for discretionary disbursements more objectively than a family member or friend with a preexisting relationship. The trustee, therefore, may be more consistent in weighing and making decisions on disbursement requests.
Absence of Conflicts of Interest
The trustee often is in the position of resolving conflicts of interest between beneficiaries and prospectively avoiding them. Reaching a fair resolution can be difficult if the trustee has long-standing relationships with one or more beneficiaries. For instance, a beneficiary could accuse the trustee of preferential treatment and a lack of impartiality if the trustee treats the beneficiaries differently. These problems rarely exist with a professional trustee.
Ability to Serve as Trustee
Acting as a trustee can be more time-consuming than you think, particularly if the trust administration lasts for several years. A trustee will have to manage investments, file tax returns, keep detailed records, and abide by trust terms, which can take significant time. Not everyone has the time or willingness to make this type of commitment. On the other hand, a professional trustee is well-equipped to handle these responsibilities and does so as part of their job.
Contact Kramer Green for Assistance with Your Estate Planning Matter
The Florida estate planning attorneys of Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. are ready to help you and your family through every step of creating the trust that best suits the needs of you and your family. We know how to most effectively and efficiently draft the documents necessary to avoid the time and expense involved in probate proceedings.
Our objective is to guide you through the complex legal matters that estate planning can involve. In addition, we want to help you lessen the burden on the surviving loved ones you will leave behind. Contact our office today at (954) 966-2112 or reach out to us online to schedule a time to discuss your legal estate planning issues with our attorneys.