The role of a trustee in managing a living trust
Setting up a living trust is an excellent way to manage and protect your assets during your lifetime and provide a clear designation of how you want your wealth to be distributed upon your death. Trusts are often a central part of estate planning, because they allow beneficiaries to bypass the probate process, which is both time-consuming and costly.
When you create a trust, you’ll need to choose a person or institution who will perform trust management duties. This person or institution, referred to as the trustee, is responsible for administering your living trust during your life and after you die. You are typically the trustee of your trust while you are alive. Then, the person you name as successor trustee takes over at your death or incapacity. Whomever you designate has a fiduciary duty to manage the trust in the best interest of you and your beneficiaries.
A trustee can be a close friend or family member, or a professional such as CPA, attorney or a financial institution. Whomever you choose will have a lot of power with regard to your living trust, so they should be trustworthy, honest and financially savvy. Acting as a trustee is a large responsibility and therefore generally best left to a professional who deals with trusts every day and can remain objective about beneficiaries.
Goals and strategies
What are some of the considerations that go into choosing who will oversee your estate and perform trust management? Living trusts accomplish two important roles in estate planning.
First, trusts are designed to grow and protect your wealth during your lifetime. Depending on their level of expertise, your trustee can help you to reach personal goals by creating an asset management strategy that fits your needs.
Secondly, trusts contain detailed information about what you want to happen to your wealth after you’re gone. You will select beneficiaries and designate how you’d like your assets to be distributed among them. You may also engage in succession planning if there is a business to consider. Putting your money into a living trust ensures your beneficiaries will not have to go through the probate process to settle it. Instead, all the legal responsibilities of distributing your estate fall to the trustee you’ve chosen.
Guidance and solutions
Unless you have extensive experience in trust administration, being designated as the trustee can be an overwhelming responsibility. If you find yourself in this position, consider working with a reputable expert who can guide you through everything from risk management to distribution of assets.
The professionals at California Living Trusts are well-versed and experienced in this area of the law. They will help you avoid stress and errors by assisting you in administering the living trust and other ways if needed when it comes to managing estates.