After creating a living trust, you will manage the assets in it. If you become incapacitated, a successor trustee will step up and take over the management of the trust. The trustee will also oversee the trust once you die. Therefore, it is important that you carefully select your trustee. If you are in the process of choosing a successor trustee, here is what you need to know.
Should You Name a Family Member?
Selecting a family member to manage your trust seems like a logical decision, but there are some potential issues with doing so. For instance, managing a trust takes more than a willingness to do it. Your trustee has to be good at making financial decisions, capable of resisting influence from others, and have the ability to find financial advisers who can help, if needed.
If a trustee does not have these qualities, he or she could mismanage the assets. As a result, the relationship between the trustee and the rest of your family could be strained. If you are able to take back over control of the trust again, you could have a considerable financial mess to handle.
If you do name a family member, it is important that you select someone who is capable of doing the job. Do not let emotions or family pressure sway your decision.
Is a Trust Management Service a Good Option?
Some trust owners opt for a trust management service to oversee the assets. There are several benefits to doing so, including the fact that financial professionals will be in charge of making decisions about how the assets are handled.
Using a trust management service also helps avoid conflict in your family. Arguments and hurt feelings about who you ultimately select to serve as successor trustee can be avoided. You can also avoid arguments about how assets are distributed after your death. The trust management service will follow your wishes and are immune to pressure from family members to distribute assets in a different manner.
A trust management service also has financial experts on hand that will prepare your trust for tax time each year. As a result, you can be sure that penalties and fines are avoided for not properly filing taxes on the trust.
Consult with a trust management company to learn what other benefits there are to using their services. You can also receive advice on how to manage your trust so that you get the most return on your investments.