Posted: June 27, 2016

Considerations in Choosing a Trustee


          As we have previously discussed, having an estate plan in place as a young parent is a responsible and proactive way to protect your children in the event of the tragic. Even if you are a more experienced parent, you certainly want to ensure the estate you have worked hard to build is handled in a fair and responsible manner. As a young parent, you may believe your estate is not big enough to warrant creating a trust; however, you should also consider that the value of your estate, if managed wisely, will grow over time.  Maybe now you only have $500.00, but your estate at the time of death could be worth $500,000.00 or $5,000,000.00, and that is what effective estate planning will help you protect.  No matter the size of your estate, we know you want to ensure your children will be protected and provided for financially. In Louisiana, one way this can be accomplished is by creating a trust in which your children are the beneficiaries. The first step in that protection is choosing the right person to administer your trust.

            A trustee is the person that you decide to leave in charge of the trust.  The trustee owes a fiduciary duty to the beneficiaries (i.e. your children).  Acting as a fiduciary means that the actions they take should be made in good faith for the benefit of your children.

            When choosing a trustee, the first people that usually come to mind are our relatives; and if you are a young parent this may include your own parents.  If you are like me, outside of your spouse, there are no people you trust more than your parents.  However, by nature of them being your parents they are typically decades older than you, and their age should be a consideration in naming them as a trustee.  Contrary to our irrational fears, drafting a will does not mean our own death is imminent. and it is likely we will live for many years.  While anyone’s health or future is unknown, it is an unfortunate truth that your parents, no matter how qualified and experienced in administering a trust, may not be able to do so. 

        Siblings and in-laws, are also frequently considered.  Typically, they are considered because they love and want to care for your children, but another reason is sometimes that their current profession lends them to the job.  That is an important factor we should think about when choosing a trustee—Can they do they job? As I stated earlier, it is likely at the time they are appointed they will be administering estate worth more than $500.00 and your old baseball card collections. You want to be sure that the trustee you name can manage your estate without being overwhelmed by the responsibility with which you have entrusted them.

            Age, ability, and affection for your children are important factors to consider when naming a trustee.  And at the end of the day it is a decision we each have to make, and it may turn out that choosing your parent, your brother, or sister-in-law is the right choice for your kids.  Please keep that in mind that when making this decision it is for the best interest of your children.

        This just briefly touches the surface on choosing the right trustee. If you have questions or concerns please do not hesitate to contact our office via Facebook, email (mdonovan@donovanlawfirmllc.com) or phone at (985) 259-7633 to schedule a consultation or ask a question.


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