If someone asks you to be the trustee of their trust, should you do it?

Well, as is so often the answer in law, it all depends.

One thing is certain, however, and that is that before you say yes, you should fully understand what you would be agreeing to.

So let’s take a look at some of the things you should know about being a trustee.

A Trustee is a Fiduciary.

The first thing you need to understand is that a trustee is a fiduciary—and what that means.

A fiduciary is a person who is invested with rights and powers to be exercised for the benefit of another.

A fiduciary owes a duty of utmost care and loyalty to the beneficiary. The trustee’s duty of loyalty means that the trustee must put the needs of the beneficiary/ies above his or her own self-interest. It is important to understand that if you are the trustee of a trust, you must manage and use the trust assets for the benefit of the beneficiary —not for yourself. A fiduciary cannot engage in self-dealing and may not exploit the fiduciary relationship for his or her own benefit.

The duty of care requires a fiduciary to carry out all of his/her responsibilities in a prudent and informed manner.

As a fiduciary, you will be held to a very high standard. You will be required to pay even more attention to the trust investments and disbursements than you would to your own accounts.

What are the Responsibilities of a Trustee?

Your duties as a trustee will be governed by the trust documents.

However, broadly speaking, as a trustee, some of your responsibilities will be to:

• Follow the instructions in the trust document.
• Treat all beneficiaries impartially.
• Protect and invest all trust assets prudently and in a manner that will result in reasonable growth with minimal risk.
• Make distributions as required by the trust documents.
• Keep accurate records and provide an accounting.
• File tax returns.
• Report to the beneficiaries as required in the trust document.

These are by no means the only (or all of the) duties of a trustee, but it should give you a good idea of what is involved.

Trustees are allowed to charge a reasonable fee. To determine what is “reasonable” in this context, it is best to consult with experienced and knowledgeable trusts and estates counsel.

Have Questions? We Have Answers.

If you would like to know more about what is involved in being a trustee or in choosing a trustee for your trust, call us at 928-282-1483.  We offer FREE consultations. We have offices in Sedona, Arizona and we serve all of Arizona.  E-mail us or connect with us on Facebook , Twitter or LinkedIn.

Lots of people have trust issues.

In our practice, the one we see most often is: who should you choose as your trustee?

Trusts.

A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets (money or property) on behalf of a beneficiary or beneficiaries (the person or persons for whose benefit the trust is made).

The trustee is responsible for managing the trust assets (the money or property) on behalf of the beneficiaries. It is an important job.

As the maker of the trust, you choose who you want to be the trustee (or successor trustee). The trustee can be a person you know (family member or friend) or the trustee can be a professional trustee (often an attorney or corporate trustee).

Each state has its own laws governing the types of trusts permitted, how they are created and the laws that govern them. That is why it is important that you consult with knowledgeable counsel about how to draft your trust and what you should consider when choosing a trustee.

Should You Use a Corporate Trustee?

Because you are choosing a fiduciary—a person in whom you place the utmost trust and confidence—the decision ultimately lies with you and you alone.

However, here are a few things to think about if you want to consider appointing a professional or corporate trustee for your trust.

Corporate Trustees.

A corporate trustee is generally a bank trust department or trust company. When you put your money or assets into a trust, the bank or trust company can help you invest and manage your wealth.

If you appoint a corporate or professional trustee as the trustee for your trust, that person would have complete responsibility for managing your trust assets in accordance with your wishes and instructions (as expressed in the trust documents).

Choosing a professional or corporate trustee can be the right choice for persons who don’t have a lot of family, are single or widowed, don’t have children, or simply do not have anyone that they can trust with their money.

In other instances, an impartial professional can be the right choice for trusts that have been set up to deal with family members who have spending or addiction problems, because it keeps you (or some other friend or family member) from getting embroiled in drama and difficult decisions.

You might also consider appointing a professional or corporate trustee as a successor trustee—someone to step in and run your living trust if you become incapacitated.

There are as many reasons for choosing a professional trustee as there are reasons for setting up a trust. At Esser, Bradley and Khalsa, our premier estate planning attorneys work with the individual needs and circumstances of each client to tailor a Legacy Estate Plan that fits their goals.

Let Us Help You With Your Arizona Trusts.

Choosing a trustee is a very difficult and important decision. Let us help you sort through it. We are Estate Planning attorneys with offices in Sedona, Arizona. We serve Verde Valley and all of Arizona. We offer free consultations and we can help you with your estate planning needs. Contact us to set up your free appointment.

In estate planning, you may often hear these titles being kicked around: Personal Representative, Beneficiary, or Trustee.

But who are these people and what do they have to do with your Legacy Estate Plan?

Let’s find out.

Trusts, Beneficiaries and Trustees.

Before we can have a beneficiary or trustee, we first need to have a “trust.”

Very briefly, a trust is a  fiduciary arrangement which can form part of an estate plan. The trust is best analogized to an LLC, or essentially a company that holds your assets for the benefit of someone (the “beneficiary”). There are generally 3 parties to a trust:

• The Settlor (or Grantor): The person who establishes the trust fund.
• The Beneficiary: The person who benefits from the trust fund. This is the person that the trust property (money, stocks, real estate etc.) will be managed for and will be used to benefit, as laid out in the specific instructions given by the Settlor when he or she establishes the trust.
• And, the Trustee: The trustee is the person, persons, or institution (like a bank), that manages the trust fund to ensure that your wishes for the beneficiaries are carried out.

It is the trustee’s duty to follow the instructions in the trust documents and to make sure that the assets in the trust (money, property, stocks etc.) are safeguarded, invested appropriately, and are used to benefit the beneficiary.

There are many kinds of trusts, a lot more to it, and every state has its own laws governing the types of trusts permitted – all of which is why it is important for you to consult with knowledgeable Arizona Trusts and Estates counsel about what is right for you.

Personal Representatives and Beneficiaries.

When you have a Last Will and Testament, or a “will,” in it you will appoint someone as your “Personal Representative.” The Personal Representative is the person who will gather up your assets, get your will probated, and administer your estate after you die. He or she will remain in charge of your estate until it is legally closed.

Your Personal Representative is responsible for, among other things, making sure that your wishes are carried out.

In the context of a will, your “beneficiaries” are those who inherit from you under the terms of your will.

Sound a little Complicated? Don’t worry, We Are Here to Help You!

We Are Estate Planning Attorneys. We have offices in Sedona and we serve Verde Valley as well as all of Arizona. We offer free consultations and we can help you with your estate planning needs. Contact us to set up your free appointment.

Let’s say you understand how important it is to have an estate plan, and you made your New Year’s resolution to get one put in place. That’s wonderful! Now, what steps can you take to make sure that your estate plan will be successful?

Here are three tips that may help you.

1. Hire Competent Estate Planning Counsel.

It goes without saying that the first thing you want to do is to make sure that your will and trust are legal so your wishes will be carried out and your estate will not have to go through the expensive and time-consuming process of probate. The best way to be certain that your estate plan documents will be correct, up-to-date, complete, and enforceable, is to meet with competent and experienced estate planning counsel.

Lawyers who practice in the area of trusts and estates are completely familiar with  the laws governing estates and the specific rules of your state. They know how to make sure that all the contingencies are provided for, and they are used to counseling clients on sensitive issues. A trusts and estates attorney will make sure that your plan is complete.

2. Know What Property You Have.

Another way you can make sure your estate plan is a successful one is to prepare a list of all of the property you have. This is because an estate plan must include all of the property that you own in order to be successful. This may sound simple when it comes to cars and real estate, but oftentimes other types of property get overlooked. Be certain to review everything you own including (not limited to):

• Real estate
• Bank accounts
• Securities
• Retirement accounts
• Life insurance
• Business interests
• Collections
• Pending and future inheritances, and even,
• Digital property.

If you choose to create a Legacy Estate Plan, then our estate planning attorneys will be sure to ask questions and compile a list of all of your property for you during one of our free consultations.

3. Think About Your Goals and Objectives.

The legacy you leave behind is more than just money. It also includes your values. You might want to use your assets to secure your family’s future,  you might want to support a charity, or you might want to make sure that your favorite 17-hand Dutch Warmblood is kept in a state of the art barn with a lifetime full of carrots when you go. Give careful thought to your wishes and goals before you have your estate plan drafted, including the needs of your family members.

Take the time to think about what your goals are and what you want to accomplish based on your unique situation. Consider who you want to make health care decisions for you if you are unable to make them for yourself. Think about who you would want to raise your young children if you are no longer here. Give some thought to the needs of any family members who may be living with disabilities Again, if you decide to make a Legacy Estate Plan, then these are the types of questions and thought process our attorneys at Esser, Bradley & Khalsa will go through with you during one of our free consultations.

Many things go into making a successful estate plan, but above all, you must give careful consideration to your unique circumstances, desires and goals.

We Are Here to Help You!

We Are Estate Planning Attorneys. We have offices in Sedona and we serve Verde Valley as well as all of Arizona. We offer free consultations and we can help you with your estate planning needs. Contact us to set up your free appointment.

Here in beautiful Sedona, we have stunning sunsets, plenty of heat, gorgeous Red Rocks and amazing views.

But in the land of estate planning, we’ve got wills and trusts. A will, as you know, is a legal document (“last will and testament”) that states your final wishes and gives instructions about how to divide up your property when you die.

A trust, on the other hand, is a  fiduciary arrangement that allows a third party, or trustee, to hold assets (money or property) on behalf of a beneficiary or beneficiaries (the person or persons for whose benefit the trust is made). Each state has its own laws governing the types of trusts permitted, how they are created and the laws that govern them. That is why it is important that you consult with knowledgeable counsel about how to draft your trust and who would be the best trustee for you. At Esser, Bradley and Khalsa, our premier estate planning attorneys work with the individual needs and circumstances of each client to tailor a Legacy Estate Plan that fits their family the way they see is best.

Who are the Players in a Trust?

There are 3 parties who are involved in any kind of trust:

• The Settlor: The person who establishes the trust fund.

• The Beneficiary: The person who benefits from the trust fund. This is the person for whom the trust property (money, stocks, real estate etc.) will be managed for and will be used to benefit, as laid out in the specific instructions given by the Settlor when he or she establishes the trust.
• The Trustee: The trustee is the person, persons, or institution (such as a bank), that oversees the trust fund. It is the trustee’s duty to make sure that the trust fund is maintained properly and that it fulfills the purpose for which it was created. The trustee has a fiduciary responsibility to the beneficiaries of the trust, which is why it is so critical to choose the right trustee for your trust.

How to Choose a Trustee.

So, how do you choose a trustee?

There is no easy answer, but here are a few general considerations that should help guide you.

• Choose Someone You Trust Who Has Common Sense and is Qualified to do the Job. First, your trustee, whether a personal friend, family member, or paid professional (CPA, attorney, bank) must not only be someone you can trust, but he or she must be qualified to be a trustee. Keep in mind that a trustee’s job generally means overseeing investments, tax issues, and administrative issues, like filing regular statements to the beneficiaries.
• Choose Someone Willing to do the Job. The person you choose should have the necessary experience and be willing to be your trustee. There are a lot of responsibilities that come with being a trustee, including liability for trust performance.
• Choose Someone Who Will Be Around For a Long Time. If you have a trust that will last a long while, or if you set up a Special Needs Trust for a loved one, you want to make sure you choose a trustee that can give you continuity. Think about whether the person will be around and will still be able to act as trustee when the time comes. One solution could be naming several successors. Another is to name a corporate trustee as a final back up or giving the successor trustee(s) or beneficiaries the authority to name a corporate trustee.

Need Help Deciding?

We Are Estate Planning Attorneys. We have offices in Sedona and we serve Verde Valley as well as all of Arizona. We offer free consultations and we can help you with your estate planning needs. Contact us to set up your free appointment.