Who do we Name as Trustee?
NAMING THE TRUSTEES -
The named trustee of the trust has absolute control that includes management, decision making, rights, timing and amounts of distributions, allotments between principal and earnings, tax assignments, and all other rights of a typical owner. Legally, a trustee cannot take personal advantage, steal, or mismanage assets, but there is nothing to stop a trustee from improper actions (until it is too late). Therefore, it is important to select a trustee that is honest, and will act according to your intentions.
WHO IS THE BEST TRUSTEE? -
Usually, the originator of the assets becomes the trustee (continuously staying in control). This may not be the best person for many reasons. If there are health problems, age restrictions, mental incompetency, senility, or other unavailability, for instance. The person may not have the language skills, may be afraid of contracts, may have difficulty making decisions, may be too busy, may be unconcerned, or may be viewed as biased. You should select someone that cares, has ability, and will act accordingly.
MULTIPLE TRUSTEES -
A trust can have multiple trustees. Be aware that if you name multiple trustees, you are then required to get all trustees to agree, make decisions, and sign documents. This can be difficult or impossible, especially, if there is no majority decision, or if a single dissenter refuses to go along. Availability of all trustees could be a problem, especially if they live or travel apart.
TRUSTEES, ONE AT A TIME -
Usually, the best way to avoid problems, is to name a singular trustee, and name replacements in order of preference. This is called naming SUCCESSOR trustees. Usually, a husband and wife are backing each other up. One as the named trustee, and the other as successor trustee. If you have multiple trusts, you can alternate the various people into the various trustee positions. Again, always naming honest, qualified people as trustees or successors.
TRUSTEE RESTRICTIONS -
The trustee must also act according to the trust agreement and is limited (or unlimited) according the the included document language, definitions, permissions, and laws of jurisdiction.
DUTIES OF THE TRUSTEE -
The primary duty of the trustee is the protection of beneficiaries and assets that are managed for them. The named individuals (or organization) of the trust are the rightful first beneficiaries.
Another is the protection of privacy of the trust and beneficiaries.
There may be other duties, such as finance management, income control, distributions, bill paying, etc. If there is profit or income, there may be the management of taxes. All of these goals are interrelated and all of them are important.
Usually, there is very little to do, because most assets are passive and do not have continuous activity. Passive assets for instance, do not usually require a bank account, or a tax return.
There is more at www.TrueTrust.com (The Training Website).