fbpx

A Discussion about Trustees

TrusteeSelecting the executor of your estate or a trustee is one of the most important decisions in estate planning.

A recent Investing Daily article, titled "Making Your Most Important Decision," has some strategies to consider when selecting the financial fiduciaries for your estate.

The first is co-trustees. Both professional trustees and individual trustees each have advantages and disadvantages. You can try to get the best of both by naming co-trustees. There are different ways to structure a co-trusteeship, so ask your estate planning attorney about which way to go. Typically, the trust company could be the primary trustee. It would take care of the record-keeping, administration, and investments. Your trusted friend or family member serving as a co-trustee would have access to all the records, and he or she would be able to reviews them and spot any issues. The original article suggests giving the non-professional co-trustee the power to veto fees, investment decisions, and other key actions.

If the trustee has the power to decide the timing and amount of distributions, it can be a source of problems, disagreement, and headaches. One idea the original article suggests is to give the non-professional trustee sole authority over distributions. Another option is to have several co-trustees who determine the schedule and amount of distributions. They can also be required to make unanimous decisions. With a trust, you have the ability to set things up the way you think will be best. However, you might have a tough time getting a professional trustee to go along with a position that is full of limitations.

Another option in trying to get the best of both worlds without some of the issues involved with co-trustees is to split trustee duties. You could have several trustees, each given the responsibility for a specific function, or you can have just one trustee who employs several professionals to conduct some of the duties. There are many ways to split the trustee duties. In general, there are three main areas of trustee duties: (i) Administration; (ii) Asset management; and (iii) Distributions.  For example, you could choose a team that looks like this:

  • A corporate trustee to keep the records, prepare taxes, and keep custody of the assets.
  • An investment manager to serve as co-trustee handling only the investment decisions.
  • A friend, family member, or professional advisor to be a third co-trustee who decides how much to distribute and makes any other decisions.

The original article suggests that what may be the simplest approach to splitting trustee duties is to name one or more individuals as co-trustees and then specifically empower them, and perhaps encourage them, to hire professionals under them for administration, tax reporting, and investing. In this scenario, the professionals technically would not be trustees. They would be employed by the trustee. The person appointed trustee would be responsible for distributions and other matters.  These are only a few ideas. Check out this article and then speak with your estate planning attorney about trustees.

You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.

Reference: Investing Daily (October 10, 2014) "Making Your Most Important Decision"

 

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment

LIKE THIS POST?

We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Coronavirus/Covid-19
Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.