Pick the Right Person as Trustee

By making a revocable living trust, you have reduced the cost and expense of administering your estate at death. The slow, tedious, and expensive probate process is avoided.  The person you named as successor trustee takes over for you. But you might think: could I have avoided a trust by giving a power-of –attorney to the person in charge?   That is good thinking except for the fact that a power-of-attorney expires when you expire. A power-of-attorney works only while you are alive.

The primary question is whether the person you named as successor trustee will handle the trust properly? Did you make the right choice?

Generally a family member or friend in San Diego is chosen to be the successor trustee. Some people select on seniority and thus name their oldest child. Others select the child or friend they feel closest to. Perhaps not much thought is given to the person’s ability to handle the duties of a trustee. How capable is the person?

Sometimes two or more persons are selected as co-trustees. But one of them is probably superior to the others. And the less able person can be a drag on progress. A trustee cannot be passive and surrender the decision making and work to the other trustee.

A client of ours named his two sons co-trustees. The brothers did not get along. The father explained his decision: “this will force them to co-operate.”  Risky. Perhaps they did (or will!).

The indispensable attribute of a trustee is honesty. When you die you no longer own anything. By creating a trust you have given complete control of your assets to another person (the successor trustee). The trustee could steal or squander your property, but not legally, and could go to jail. But that is little consolation if the property is gone. It takes more than honesty to be a capable trustee.

The relationship between the person who creates the trust and the person who will handle the property is a “fiduciary relationship.” The successor trustee has the power and obligation to act under circumstances which require total trust, good faith, and honesty. A trustee may be careless with his own property but not with the property of another person. Only the highest care will suffice.

Here are a few of the qualities to look for in a successor trustee:

The person does not procrastinate; abides by deadlines; knows or learns the basic trust law rules: has organizational skills;  keeps an accurate checkbook; keeps accurate records for an accounting; self-starter; can take on tasks from start to finish; gets things done; observes time limits; uses electronic accounting program; can answer questions of beneficiaries; works with the attorney; uses good judgment; attitude is non-emotional; must put interest of beneficiaries before self; obtains professional advice when needed.

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