Many people choose to create a living trust as part of their comprehensive estate plan. Transferring ownership of your assets and property to a trust can have many benefits, including avoiding probate, protections from taxation and creditors, and greater control over how your estate is distributed after you pass away. A trust is a legal tool, however, and someone–called a “trustee”–must manage the property that is in the trust. While you are living, you can serve as trustee and continue to manage your own property, though you must choose someone to serve as a successor trustee if you become incapacitated or pass away.
This successor trustee will have many responsibilities and your hard-earned and valued property will be left in their hands. Therefore, the choice of a trustee should be carefully considered. Many people choose a family member to serve as a trustee, but this may not always be the best decision. Just because you can trust someone may not necessarily mean they can adequately handle the responsibility of managing your trust.
Can The Person Handle The Duties Of A Trustee?
Trustees have many different duties and some of their primary responsibilities can include:
- Understand and follow all the terms of the trust;
- Managing and investing assets of the trust in a diversified manner;
- Distribute assets in the manner set out by the trust documents;
- File tax returns;
- Defend against trust contests and creditor actions;
- Keep accounting records of expenditures, income, and distributions.
Investing the trust assets alone can be a difficult job, as investment decisions must be prudent and in the best interests of the beneficiaries. If a person is not familiar with investments, they may not be a wise choice for a trustee. In addition, managing a trust can be time-consuming, so a person who already has demanding obligations may not have the time needed to properly manage a trust.
Trustees also have a fiduciary duty to any trust beneficiaries. This means that they must act impartially with the best interests of the beneficiaries in mind. This can be complicated if the trustee is a beneficiary themselves. For example, a family member may have personal conflicts with other family members who are beneficiaries and may act in a way that is disloyal to them. Additionally, a trustee who is also a beneficiary may act in a self-serving manner to profit from the trust. Breach of fiduciary duty is often a risk when you choose a family member.
If you do not believe you know someone who has the time and ability to properly manage your trust, you may want to consider a professional trustee. A professional can administer your trust impartially and in line with all of the requisite Illinois laws. You should discuss all of your options with an experienced trust and estates attorney.
Contact An Elgin Estate Planning Attorney As Soon As Possible
If you would like to discuss trusts, wills, and other estate planning options, please call an experienced estate planning lawyer at the Jackson Abdalla Law Group. We serve clients in and around Elgin, South Elgin, St. Charles, Bartlett, Streamwood, and Carpentersville, so please call today at 773-550-3853.