The trustee should be someone who is comfortable making financial decisions.
Ideally, this should be someone with some investment experience; generally
I advise my clients to name an individual because, while banks and other
financial institutions can serve as trustees, they’re impersonal,
they charge a lot in fees and they tend to be inflexible, with their own
way of doing things.
You want someone as a trustee whom you can trust, with financial and investment
experience; if feasibale, try to choose someone younger than you, so that
it’s less likely they will die before you.
I recommend naming two successors, in case the first one you name can’t
serve. I encourage my clients to make the decision because if they don’t
have a named successor trustee available it will be up to the court to
appoint a trustee.
Are there Companies that Serve as Trustees in Various Forms of Trusts?
As noted, banks and other financial institutions will serve as trustees
and, sometimes, if a very wealthy individual has a trust with a lot of
money and a complicated mix of assets, a higher level of financial sophistication
in managing those assets may be necessary, so you might consider that.
Wealthy individuals often have a good relationship with their bank and
if their banker is familiar with their finances and assets, that may be
a good choice; financial institutions generally do a very good job, and
they are held to a higher level of duty because they’re after all
The downside is, they will generally charge a very substantial fee and
they’ll be inflexible for the most part; that’s the price
you pay in naming a professional financial institution come in. There
are also individual professional fiduciaries, who are licensed by the
state; they’re who the court will appoint if they have to step in
an appoint a new trustee. These people will do a good job, they’re
licensed by the state, but for the most part, I will strongly encourage
my clients to name as successor trustees individuals whom they know and trust.
What Life Events Generally Precipitate the Formation of a Trust?
At a minimum, everyone should have a will. In California, your will is
subject to probate if you have assets worth more than $150,000. To avoid
going through probate, you should strongly consider setting up a living trust.
Another thing to consider about a living trust is that it provides for
your needs should you become disabled or incompetent. It puts everything
in one place and makes your needs clear, so you get to make decisions
and not the state.
For more information on
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