Like many people, you may find yourself considering the creation of a testamentary trust agreement as an addition to your comprehensive estate plan. If you do choose to include a testamentary trust to your estate plan you will need to make a number of important decisions during the creation of your trust agreement. One of those decisions will be who to appoint as the Trustee of the trust. Despite the importance of this decision, many people spend very little time contemplating who to appoint. Instead, they simply appoint a spouse, family member, or close friend who may, or may not, be the best person for the job. By now you should be asking “Who should be the Trustee of my testamentary trust?”
The answer to that question depends, to some extent, upon the primary purpose of the trust you create. While there are a virtually endless number of reasons why you might choose to create a testamentary trust instead of a living trust, one of the most common reasons is to provide a mechanism to protect assets intended for your children in the event you die while they are still minors. With a testamentary trust in place the assets you leave behind for your children will all funnel into the trust when you die and stay there until your children reach the age of majority, or until the trust terms dictate they be distributed to the beneficiaries. In the interim, the assets and/or interest earned on the assets can be used to support your children.
If your testamentary trust is going to be used to protected assets for your children it is critical that your Trustee have the experience, abilities, and knowledge needed to properly manage the trust assets and administer the trust terms. Your best friend, sister, or even spouse may have the best of intentions; however, if he/she does not have the right skill set the trust assets could disappear instead of grow, totally defeating the purpose of the trust. Consider the following factors when deciding who to appoint as your Trustee:
Legal knowledge – a trust is a separate legal entity. Your Trustee needs to understand the laws that govern trust administration.
Experience – choosing someone with previous experience as a Trustee, when possible, is usually a good idea.
Availability – managing a trust can be very time consuming. Make sure your intended Trustee has that time available.
Willingness – do not ever assume someone is willing to be the Trustee of your trust. Always sit down and ask before making the appointment.
Conflicts—appointing someone close to you can backfire because of the potential conflicts that may arise if the Trustee is also close to beneficiaries of the trust.
If you have additional questions or concerns about testamentary trust agreements, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.