Trusts, once thought to be estate planning documents only for the rich and famous, are being used by estate planners of all stripes and net worths. This legal arrangement transfers ownership of certain assets from an individual to the trust itself, which allows families to avoid probate (among other benefits).
The important people involved in a trust are the grantor (creator of the trust), beneficiary, and trustee. The trustee distributes the trust’s assets to the beneficiary in accordance with the trust’s instructions. Choosing the right trustee is important in achieving your estate planning goals.
Should You be the Original Trustee?
Grantors also function as the trustee for living trusts. Living trusts take effect as soon as the grantor creates them, and grantors are usually the original trustees. This allows the grantor some amount of control over the trust’s assets while the grantor is alive and has mental capacity. After the grantor passes away, the successor trustee named in the trust takes over as the trustee.
Not all trusts are living trusts, though. Some, like testamentary trusts, only take effect after the grantor dies.
Personal or Professional?
Many grantors choose close friends or family members as trustees. This works well most of the time, as these people often know the grantor’s wishes and personality quite well. Just because someone knows you well does not mean this individual should be your trustee, though. Some trust arrangements are better served by a professional trustee service. Professional trustees are typically financial or legal professionals that charge monthly, yearly, or one-time fees.
What Traits Should Your Trustee Have?
If you are looking to name a friend or family member as a trustee, you need to take some time to set criteria. Generally, your trustee should be:
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- At least somewhat proficient at managing money
- Mature
- Familiar with you and your beneficiary
- Honest
- Trustworthy
Removing a Trustee
Trustees have a fiduciary duty to act in the best interests of beneficiaries, follow the trust’s instructions, and generally maintain the trust’s assets. Sometimes, the best thing for the trust and beneficiaries is to remove a trustee. In Florida, the court must be petitioned by the grantor, beneficiary, or another trustee to remove a trustee. Florida law allows removal of a trustee if one or more specific grounds are proven.
We’re Here to Help
What type of trustee would be best for your estate plan? Does your estate plan even need a trust? If so, what kinds of trusts do you need? These questions do not have simple answers. Speaking with a quality estate planning attorney is the best way to ensure your plan accomplishes your goals. The Law Office of Ray Garcia, P.A. is ready to help you create an optimal estate plan so your loved ones can live in security. Contact us today to set up your consultation.
Law Office of Ray Garcia, P.A.
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