Once upon a time, trusts were used almost exclusively by the very wealthy as a way to protect and pass down the family fortune – and to keep an eye on it even from the grave. Today, however, trust agreements are commonly included in the estate plan of the average individual. In fact, you don’t have to be particularly wealthy to benefit from the addition of a Family Wealth Trust, or FWT, in your estate plan. One question we are frequently asked though is “ Can you be the trustee of my Family Wealth Trust? ” The answer to that question is “yes”, we can; however, it is important to understand the duties and responsibilities of a trustee before you decide who to appoint as your trustee.
A Family Wealth Trust is simply a specialized trust that is used to protect and grow assets that are intended to be passed down to future generations. You do not have to be extremely wealthy to want to pass down those assets you do have to your children or grandchildren. A FWT is simply a way to accomplish that goal while retaining a certain degree of control over the assets and how they are used after being gifted to the intended beneficiaries.
Like all trusts, a FWT requires a trustee. As the creator of the trust you may appoint anyone you wish as the trustee. People often make the mistake, however, of appointing a trustee without fully understanding the importance of the position. Appointing the right trustee though can add to the success of your FWT while appointing the wrong trustee could lead to the failure of your FWT.
Your trustee has a number of important duties and responsibilities, including, but not limited to:
Managing trust assets
Investing trust assets
Communicating with trust beneficiaries
Distributing trust assets pursuant to the terms of the trust
Overseeing any litigation relating to the trust
Preparing and paying trust taxes each year
Although you can appoint anyone as your trustee, given the tax and legal issues involved in managing a trust it is often best to appoint a professional, such as an attorney, financial planner, or a professional trust management company. A well-meaning family member or friend could make an innocent mistake that could cost the trust, and therefore your beneficiaries, a significant amount of time and money.
If you have additional questions or concerns about Family Wealth Trusts, trustees, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
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