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Discuss Your Estate Concerns With An Experienced And Compassionate Lawyer
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Discuss Your Estate Concerns With An Experienced And Compassionate Lawyer

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Be very careful when you name someone as a trustee

Be very careful when you name someone as a trustee

| Feb 15, 2021 | Estate Planning

Creating a trust as part of your estate plan can be a great decision. When properly structured and funded, a trust can protect your assets from creditors, help you qualify for government benefits as you age and reduce the likelihood of people challenging your legacy in court after you die.

However, a trust is only as good as the language used in its documents and the trustee or trustees chosen to manage it. The trustee you choose will have to invest, sell or maintain trust assets. They also have to enforce the rules of the trust when beneficiaries want to access its resources.

Naming the wrong trustee can be a devastating mistake that not only diminishes the value of the trust but also possibly endangers relationships in your family.

How do you pick a good trustee?

Serving as a trustee is a form of power, and some people let power go straight to their heads. It can be hard to know if your loved one will use their position to take revenge on their siblings or undermine your legacy because of grievances from their childhood or teen years. Someone you trust could also try to use their position as trustee to enrich themselves at the expense of others.

You need to think carefully about the relationship you have with the candidates you consider for the trustee position. Their behaviors at both of their best and their worst can give you an idea of what might happen when they have total control over the property you leave behind. You also need to consider how good they are at following rules, staying organized and standing up to those trying to break the rules.

What could a trustee gone bad do to your estate? 

A trustee who abuses their power could intentionally waste trust assets to diminish its value. While they may lose out on that value themselves, they may see punishing the other beneficiaries as more valuable than their share of the trust.

A trustee could also embezzle funds from the trust, putting their own greed above the instructions you leave behind. It’s also possible that they might just be incompetent. Although your family members can resolve the issue by challenging the trustee and their handling of the trust in court, the cost of that litigation will likely diminish the value of the trust.

If you think you need a trust in your estate plan, you want to pick someone trustworthy and responsible as its trustee. You might even want to consider naming two or more trustees so that no one person has total authority over the trust.