What to consider before assigning a trustee

Setting up a trust can be an effective and beneficial option for people who wish to protect their assets, reduce taxes, avoid probate and/or have control over asset distribution. While they may not be necessary for every person, trusts are a tool that people all across Orlando often consider when it comes to estate planning.

One critical aspect of a trust is that, while you may keep control over it for some time, ultimately it can end up being managed by someone else: the trustee. Because of this, it can be crucial that you understand what is required of a trustee and what types of characteristics a good trustee should have.

A trustee will be responsible for making sure it is administered in accordance with your wishes. This means that he or she will be tasked with distributing assets, filing tax documents, controlling the assets protected by the trust and responding to beneficiaries.

In some cases, naming your spouse, parents, adult children or friend as the trustee can be wise. These people know you, understand what you want and typically have a very real interest in protecting your wishes and assets.

As noted in this TIME Money article, you can choose to assign a bank or lawyer as a trustee, which can be a good idea if a trust is intended to last for generations or if it is large or complex. These parties have the experience and financial background your friends and family members may not.

You may also choose to name a relative and a bank as co-trustees in order to have a professional manage the trust with the guidance and input of your loved one.

Administering a trust can be very complicated so it can be wise to choose a trustee who is prepared and able to take on the job. A good candidate for a trustee is someone who is responsible, honest and understands the time and energy that it takes to administer a trust.

Making decisions related to a trust can be difficult to do without legal guidance. Whether you are setting up a trust or administering one, discussing your options, questions and concerns with an attorney can help you protect yourself and make informed decisions.