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Naming a Trustee to Ensure the Success of Your Trust

Naming a Trustee to Ensure the Success of Your Trust

"I really love my daughter, and I think she would so a great job ensuring the trust is distributed according to my wishes. Then again, she doesn't exactly have a lot of money sense...my friend Jim, however, he is great with money, so maybe I should appoint him. Would that upset my family? Should I leave it to a professional?"

Residents of Los Angeles familiar or maybe just beginning on the estate planning process may have experienced an internal monologue similar to that detailed above. Naming a trustee can prove to be one of the most important and most difficult decisions in the estate planning process.

A good first step is deciding if a relative/friend or a professional should be named. Often, unless there are substantial assets or a trust that will span multiple generations, professional trust companies aren't necessary as they will take a cut of the funds.

The benefit of naming a relative or friend is that they will be more inclined to see the success of the trust. When naming an individual, consider their relationship to the rest of your beneficiaries. If there is a contentious relationship between several of your beneficiaries, it may be best in that instance to go back to hiring a professional that will remain neutral.

There is always the option of a hybrid situation, as well. Appointing co-trustees can offer flexibility and the best of both worlds to ensure your wishes are carried out. However, each situation is different. Retaining experience legal counsel in the estate planning process can aid in making educated decisions when it comes to difficult questions.

Source: The Wall Street Journal, "A Matter of Trust," Jeanine Skowronski, Sept. 10, 2012