{"id":987,"date":"2010-05-04T14:39:30","date_gmt":"2010-05-04T21:39:30","guid":{"rendered":"http:\/\/www.lichtermanlaw.com\/?p=987"},"modified":"2012-10-07T04:35:24","modified_gmt":"2012-10-07T11:35:24","slug":"be-careful-who-you-pick-as-a-trustee","status":"publish","type":"post","link":"https:\/\/www.lichtermanlaw.com\/index.php\/be-careful-who-you-pick-as-a-trustee\/","title":{"rendered":"Be Careful Who You Pick As A Trustee"},"content":{"rendered":"

Although statistics show that the number of people who have an estate plan is not increasing, I do see a larger portion of individuals and couples making the decision to have a trust-based estate plan.\u00a0 That is, an estate plan where a trust is the main document that controls how things are distributed when they pass away.\u00a0 One of, if not the, most important decisions you make with a trust-based plan is who will be the trustee and who will be the backup (“successor”) trustees.\u00a0 The trustee is the person\/people\/entity that makes sure the terms of the trust are followed.\u00a0 Depending on the trust’s design, the trustee may have a large amount of discretion on who receives money\/property from the trust, how they receive it, and when they receive it.\u00a0 Yet, in many cases, the decision on who will be the trustees\/successor trusties is made hastily, without much thought.<\/span><\/p>\n

This can be a big mistake!\u00a0 If you have done your planning correctly and fully “funded” your trust (e.g., transferred assets to it), your trust will have most (if not all) of your assets.\u00a0 Considering that the trustee will make certain decisions relating to the trust, the choice should not be taken lightly.\u00a0 The trustee should be someone you trust (no pun intended . . . ok, yes, the pun was intended).\u00a0 However, don’t stop the inquiry there.\u00a0 It should also be someone who has sufficient financial management and administrative ability (or is wise enough to hire professionals to handle those tasks for them).\u00a0 And consider the option of splitting the trustee role\u00a0 among one or more people\/entities.\u00a0 For example, you could have a “distribution trustee” who determines when to make distributions, and an “administrative trustee” who keeps track of all the accounting, tax, and other detailed financial matters.<\/span><\/p>\n

I recently had a conversation with a great client.\u00a0 She shared with me that her father had a trust set up and properly “funded” (I say bravo to him, because not “funding” the trust is the single biggest mistake I see when reviewing estate plans).\u00a0 He named a local bank as the trustee for distribution and administrative purposes.\u00a0 He set out several scenarios in his trust about how he wanted to provide for his children (education, businesses, homes, etc.).\u00a0\u00a0 One of the main assets in the trust was stock in a certain company.\u00a0 Long story short, the stock dropped significantly in value and the trustee (the bank) would not sell it.\u00a0 It believed the stock would come back and that to sell it at the depressed price would violate the bank’s duty as trustee.\u00a0 This all happened about the time this client was supposed to be getting a distribution to help with education.\u00a0 She never did get the distribution for education (or much else for that matter).\u00a0 The good part is that she did a great job on her own and is quite successful today.<\/span><\/p>\n

I’m not saying you shouldn’t consider a bank or trust company as a trustee, I give the example to show how important it is to fully consider the various options for who the trustee is.\u00a0 Each situation is different.\u00a0 That is why you need to make sure your estate planning attorney takes a client-centered relationship approach to your planning . . . not a transactional approach.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Although statistics show that the number of people who have an estate plan is not increasing, I do see a larger portion of individuals and couples making the decision to have a trust-based estate plan.\u00a0 That is, an estate plan where a trust is the main document that controls how things are distributed when they […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[21,24,7,166,16,30,18,29,23,19],"class_list":["post-987","post","type-post","status-publish","format-standard","hentry","category-estate-planning","tag-asset-protection","tag-dynasty-trust","tag-estate-plan","tag-estate-planning","tag-grand-rapids-estate-planning","tag-grand-rapids-estate-planning-lawyer","tag-grand-rapids-trusts","tag-probate-avoidance","tag-protection-your-family","tag-trust"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/posts\/987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/comments?post=987"}],"version-history":[{"count":7,"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/posts\/987\/revisions"}],"predecessor-version":[{"id":1087,"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/posts\/987\/revisions\/1087"}],"wp:attachment":[{"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/media?parent=987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/categories?post=987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lichtermanlaw.com\/index.php\/wp-json\/wp\/v2\/tags?post=987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}