Although many people think of them as the financial tools of the ultra-wealthy, anyone can benefit from a well-established trust. But if you’re considering drafting a trust, it’s important to remember that a trust is only as good as the trustee who administers it. Consequently, the choice of trustee is an important one, and not one to make lightly.
Below, the team at Hargrave Law, PC discusses the basics of trusts, the qualities you should look for when choosing a trustee, and how a trust lawyer can help you make the right decision.
What Is a Trust?
A trust is a special type of relationship established by one party, a “trustor,” who grants another party, a “trustee,” the right to hold property or assets “in trust” for a third party. Trusts are fiduciary relationships, which means they are created on behalf of one or more persons, and which is controlled by the trustee, acting to benefit the beneficiary, not themselves.
When someone places their assets in a trust, they have the ability to decide how and when those assets should be distributed. This can help beneficiaries obtain their inheritances without the time, paperwork, taxes, and court supervision necessitated by probate, as in a will.
What Qualities Would Make an Ideal Trustee?
If you are in the process of establishing a trust, one of your most important tasks will be deciding who to select as your trustee. Choosing a dependable trustee is the best way to ensure your assets go exactly where you want them to go.
Although the nature of your trustee’s duties may vary depending on the type and complexity of your trust, ideal and effective trustees of all kinds tend to share the following qualities:
- The willingness to act as a trustee. Administering a trust can be challenging and complicated. An ideal trustee understands the scope of the commitment and takes it seriously.
- The time to devote to the task. Some trusts can take months or even years to administer, so it’s important to select a trustee who is comfortable with this potentially lengthy time commitment. It’s also a good idea to choose someone who is located in the same jurisdiction where your trust was established. Otherwise, they may need to travel a lot to fulfill their obligations.
- Reliability, integrity, and dedication. Much is at stake when you grant another person the fiduciary responsibility of a trustee. Make sure the trustee you choose is someone you know can carry out your wishes just as intended, even in the face of challenges or coercion from others.
- Solid organizational and financial skills. Administering a trust often requires significant organization and attention to detail. The trustee you select should be someone who can avoid making errors and comply with fussy legal requirements. If you are unsure about their financial competence, you could always nominate a professional trust advisor or co-trustee.
How Can an Attorney Help Me?
A good family law attorney can help you establish a trust by:
- Identifying and valuing all of your various assets and properties.
- Deciding whom to nominate as your trustee and which beneficiaries you want to include in your trust.
- Determining and implementing any restrictions you envision to prevent your trust funds from being administered or used in a way you don’t want.
- Tailoring the language of the trust to include the assets, properties, and provisions you want for your beneficiaries.
- Transferring your assets and property into the trust and naming your trust as the beneficiary of life insurance policies, stock holdings, and retirement accounts.
- Preventing costly errors and making sure your trust adheres to all relevant state and federal laws.
Contact Hargrave Law, PC
To learn more about how the Bedford, TX trust attorneys of Hargrave Law, PC can help you establish a trust that meets your personal and financial goals, contact us today to get started with your initial consultation.