Over the last several decades, incorporating a trust into a comprehensive estate plan has become increasingly popular. One reason for this is that trusts have evolved to the point where there is a specialized trust to meet almost every estate planning goal. Though there are now a wide variety of different trusts from which to choose, all trusts require you to appoint a Trustee to manage trust assets and oversee the administration of the trust terms. Before you decide who to appoint as your Trustee, you need to know how your choice of Trustee can affect the success (or failure) of your trust.
At its most basic, a trust agreement allows the Trustor, or Maker, to appoint a Trustee to manage and protect assets for the benefit of a third party (the Beneficiary). The duties and responsibilities of a Trustee, however, can be extensive. The larger and more complicated the trust agreement, the more complex and time-consuming those duties and responsibilities can be. Appointing the wrong Trustee can lead to the failure of even a well-drafted trust agreement. Consider some of the duties and responsibilities of the average Trustee:
- Communicating with trust beneficiaries about trust business.
- Investing trust assets using the “prudent investor” standard. This means the Trustee must use the utmost care with trust assets and not make risky investments. Clearly, you need a Trustee who has some experienced in the financial arena.
- Distributing trust assets according to the terms of the trust. This often includes a great degree of discretion on the part of the Trustee. Making the wrong decision regarding a distribution can greatly impact the trust assets.
- Keeping records of all trust business.
- Preparing and filing trust taxes. This requires at least a fundamental level of knowledge about tax law.
As you can see, the Trustee plays a vital role in the day to day business of any trust. Having an experienced, competent, and skilled Trustee can greatly increase the chances that the trust principal will grow and that the trust goals will be reached. Conversely, appointing a Trustee with virtually no experience and few skills can lead to the failure of your trust.
If you plan to include a trust in your comprehensive estate plan it is in your best interest to consult with an experienced Illinois estate planning attorney regarding who to appoint as the Trustee of your trust to ensure that your choice will increase the likelihood the trust’s success. Contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.