In this post we will look at the role of the living trust trustee and the qualities that you should look for when you are choosing a trustee. However, before we get into that subject, we should explain why you may want to consider the creation of a revocable living trust.
Efficient Asset Transfers
A revocable living trust would be used by someone who would otherwise be using a last will as a vehicle of asset transfer. Why would you want to use a living trust as an alternative? The answer is that a will must be admitted to probate, and there are drawbacks that go along with this process.
The court supervises the administration of the estate, and there is a proving of the will. Ultimately, the executor prepares the assets for distribution to the heirs after paying final debts.
This process can take a considerable amount of time to run its course, and the heirs have to wait out this time lag. It can take up to a year for an estate to be probated, even in relatively simple cases.
The time consumption is one factor to take into consideration, but probate expenses can eat into the inheritances, and this is another reason why many people try to avoid probate.
Assets in a revocable living trust can be transferred to the beneficiaries in a more efficient manner outside of probate.
Living Trust Trustee
Now that we have explained the value of revocable living trusts, we can look at the role of the trustee. When you create a living trust, you are called the grantor of the trust. You can serve as the trustee and the beneficiary while you are still alive. Most people will go this route.
Ultimately, you need someone to manage the trust after you pass away, so you name a successor trustee in the trust declaration. You also name beneficiaries who will receive distributions from the trust after your death.
When you are selecting a successor trustee, you could name a person that you know. The person that you choose should be an experienced money manager who is completely trustworthy. You should also consider potential conflicts of interest, and longevity is another factor.
Do you know and trust anyone who has the appropriate qualifications? If the answer is no, you could use a professional fiduciary like a trust company or the trust section of a bank.
These corporate trustees understand the trust administration process, and there is inherent oversight. When you examine all of these factors, a corporate trustee may be the best choice.
Report on Revocable Living Trusts
If you would like to learn more about living trusts and the role of the trustee, we have a valuable resource that you can access through this website. Our firm has prepared a special report that takes an in-depth look at revocable living trusts.
To access your copy, click this link and follow the simple instructions: Bucks County PA Living Trusts.
Marianne Flood, Estate Planning Attorney
Latest posts by Marianne Flood, Estate Planning Attorney (see all)
- What Is a Qualified Personal Residence Trust? - July 24, 2015
- Will Medicaid Take My Home? - July 22, 2015
- 2015 Estate Tax Exclusion Adjustment Released By IRS - July 18, 2015
