A trust is a powerful tool and a smart thing to include in your estate plan. However, there are limitations. For example, the trust will only be as good as the trustee you choose to administer it.
The trustee you choose has complete control of the assets you put in a trust. They also control who can access the property in the trust.
Should you choose a friend or relative?
If you plan a trust, you may spend a lot of time trying to find the right person to serve as the trustee. You may want to choose someone in your family or that you have known for a long time. Unfortunately, there are some limitations to this method.
One is that the trustee may be around your same age. In this case, you may outlive them, or they may not be in a condition to handle trust administration when you pass.
Also, people sometimes behave in a selfish and unpredictable manner when it comes to assets. Because of these issues, it may be wise to use a fiduciary or professional trustee for this role.
Why might using a fiduciary be a smart option?
A fiduciary has an obligation to the trust and the named beneficiaries. An appealing factor of this option is that they don’t have a personal relationship with you or your beneficiaries. These personal issues may make the administration of your trust more complicated. Also, with a fiduciary, they will stick to the trust’s terms and not be susceptible to pressure from the beneficiaries to modify your initial plans.
Using a professional fiduciary is a smart option in many situations. It’s a good idea to consider the factors above to make sure it’s right for your situation, and experienced legal guidance can help you determine you choices.