Duties of the Trustees of Your Revocable Trust
By Libby Banks, The Law Office of Libby Banks, PLLC
Clients often ask how they can prevent loved ones from being the victims of fraud and abuse. For an answer, I turned to Kent Berk, with Berk Law Group, P.C. in Scottsdale, Arizona.
For most of our clients, their estate plan centers on the Revocable Living Trust. When establishing your Trust, one of the most important decisions is who will be your successor Trustee. During your lifetime and while you have mental capacity, you serve as the Trustee. If you are incapacitated, or upon your death, your Trust appoints a successor trustee to step into your shoes to carry out your wishes.
Making Sure Your Trustee Understands the Job
When selecting your Successor Trustee, it’s important that you assure yourself that they understand what they will be called upon to do. Whoever you choose, be sure to ask them if they are willing to serve. This is very important! You don’t want a situation to arise where the people you counted on to serve decline to serve or are taken by surprise. It is one of many ways to end up in an expensive court proceeding to get a trustee appointed. If you have a plan in place and did not ask before naming them, be sure to ask now.
The Various Roles of Your Trustee
Serving as Trustee During Your Incapacity
There are several times a Successor Trustee may be called to serve. The first is when you are incapacitated. Make sure your Successor Trustee realizes that they may begin to serve while you are still alive but unable to manage your own finances. Be sure they understand that they might be taking care of the finances to take care of you and anyone dependent upon you. The job of Trustee during incapacity could be a short stint or a long haul. Be sure your Trustee is up for the task either way.
Serving as Trustee to Administer Your Trust After Death
Your Successor Trustee will also wrap up your financial affairs at your death. Consider how complicated your finances are and be sure your Successor Trustee understands what types of property they may have to administer. Will they be selling a house here and in another state? Do you own a business or rental properties? Have you inherited mineral interests? Do you have many different accounts and brokerage accounts – or Bitcoin? While you don’t have to disclose all your finances to your Successor Trustee, be sure they understand the extent of what they may have to address when they begin to serve at your death.
Serving as Trustee for Your Beneficiaries
Your Successor Trustee may also be managing a trust created on your death for one or more beneficiaries. Minors cannot handle their own money and your Trustee may be managing it until they are old enough to manage it themselves. Other times your Trustee may serve as trustee for a beneficiary is for someone with special needs, or an adult beneficiary you don’t trust to manage the money themselves.
Talk to your Trustee about what you wish for your beneficiaries. How do you want distributions handled, how much access should your beneficiaries have to the assets, and when do you want the Trustee to distribute funds to them? If education is important, be sure your trustee know this. If learning to work hard and make your own way is important to you, your trustee needs to know what that means in terms of the trust you have created for your beneficiary. If you want the trustee to teach the beneficiary how to manage the assets before they receive them, talk to your trustee about keeping the beneficiary involved in the investments and decision-making when they are old enough.
Take Advantage of Our Free Consultation – or our Trustee Training Webinar
Selecting a trustee and talking with them about your plan is important. If you need an estate plan or want a review of your current plan, take advantage of a free initial consultation with one of our three attorneys by calling the office at (602) 375-6752, or inquire through our website at https://libbybanks.com/schedule-estate-planning-meeting.
And if your trustee needs training, we are offering a webinar and workbook to train your trustee in June, and will re-run it periodically. For our Legacy Care Program Members, this is a free webinar. The fee for non-members is $450. Check our website for more information.