How to Choose a Trustee
Creating a trust is such an act of care for those you love most — and one of the most important elements of the trust is who you pick to administer it.
The process of creating a trust tends to bring up a lot of questions you’d never really anticipated having to answer before. It’s only natural: we tend to view death as something that will happen in the distant future, and wrapping your head around the thought that it may be sooner (though hopefully not!) can be tough.
One of the more complex decisions that goes into trust-making is choosing the person you want to appoint as your trustee.
The trustee will become legally responsible for managing any assets you leave in your trust when you’re no longer here, which often includes investing those assets or disbursing them according to your instructions. They’re also the person who will interact with the guardian of your children (if you have one, or name a separate one), which means that they’ll be in charge of your children’s financial future until they come of age.
Here are the three things I recommend people think about when choosing who to name as their trustee:
Who is the best person to manage my financial affairs if I die or become incapacitated tomorrow?
This is the key decision you need to make when it comes to choosing a trustee, because financial management will be a large part of what they do. You need to find someone who knows how to manage money (or who is willing to learn and work with a trusted financial advisor). You also need to ensure this person shares your financial values, so you can trust them to make decisions that align with those values and carry out your wishes when you’re not there.
Who has the time, energy, and emotional stability to take on this job?
Being a trustee takes a moderate investment of time and energy, and it comes with legal responsibilities. You need to consider who you know who has the time and energy to take on this kind of work. While many people do pay their trustees out of their trust, it’s still not a job to delegate lightly. Be sure to take their emotional stability into account, as well as their communication style. As the trustee, they’ll need to interact with your beneficiaries, which means that they need to be able to understand and work with your beneficiaries’ communication style and needs. Things can get fraught quickly if there are differences or misunderstandings about the way you’ve decided to leave your assets, so you need someone who can stand strong and hold firm to your wishes.
Who will this person be interacting with? Does that impact my decision?
Along those lines, you should also consider who your trustee will be interacting with. For instance, I’m a divorced mother of young children. As I was choosing the trustee for my trust, I had to think about who I trust to communicate with my ex (should I die first) and my children, and who I know would work well with my family to ensure that my wishes were carried out. You should do the same. Consider who your trustee will spend the most time interacting with and make sure they’re up for the task and able to deal with any relational complexities that may exist.
Finally, I encourage clients to think about how they can make life easier for that trustee. Consider things like:
- Giving them a list of people you want them to contact for advice. This includes lawyers, financial advisors, therapists, or any other experts you’d like them to be in contact with.
- Organizing your assets so the trustee can easily access them. Managing a trust is hard enough without having to work hard to access your assets. Set things up so the trustee can step in as easily as possible.
- Letting them know who your guardian is and what your expectations are of them both. Your trustee and your guardian will have to work together closely, so leave instructions so each knows who the other is, and how you want them to interact with each other.
- Sharing your values with them, especially as regards money. Your trustee will be making financial decisions with your assets when you’re no longer there, so be sure they know what you would like them to do and understand the values you hold around money and assets.
Making decisions with such a broad-ranging impact can be complex, but we’re here to help. Click here to find out how we can help you create a trust that meets your needs.
