In many cases, people create trusts not to help themselves but to support their loved ones in the future. So, it’s only natural to question what happens to the trust when the creator is no longer living. The answer depends on the purpose of the trust. For a trust established to support a loved one
Whether you are forming a trust for the first time or making revisions in documents for an existing trust, it is a good idea to give serious thought to the choice of trustee. Selecting the right trustee will enable your trust to do what you intend and to protect and support loved ones. If you designate someone who is not prepared to take on the responsibilities, that can spell trouble for both the trust and for the trustee.
Your situation and your trust are absolutely unique, so there are no hard and fast rules about choosing a trustee. However, with decades of experience developing and administering many different types of trusts, the team at Blacksburg Law can offer some suggestions about factors to consider as you prepare to select a trustee.
Understanding the Role of Trustee
Before you can determine the right trustee, you need to understand how the trustee functions in the operation of a trust. Although people often think of managing a trust as similar to managing an account, the role is much broader because a trust is much more than an account. A trust is like a virtual container for holding property. The trust might hold one account or many accounts, in addition to other assets such as real estate, receivables, or collectibles. This property is held safe for the ultimate use of the beneficiary or multiple beneficiaries.
The trustee has the duty of managing the property in the trust, but they don’t manage it for their own benefit. They are accountable to the trust and the beneficiaries. The trustee is a caretaker. Decisions made by the trustee are supposed to support the best interests of the beneficiaries rather than the trustee’s own personal interests. If the trustee acts in a way that is self-serving, the beneficiary can take them to court over it. The duty owed by the trustee is known as a fiduciary duty.
So, a trustee must be capable of making decisions with an eye toward the benefit of others. This requires a level of integrity that not everyone is prepared to put into practice. The temptation of having assets at their disposal is too much for some people, particularly if they are facing challenging situations in their lives. The bottom line is that a trustee must be a person you trust absolutely to be selfless, regardless of the circumstances.
What Will the Trustee Be Expected to Do?
Another critical factor to consider when choosing a trustee is the scope of the work that the trustee will be required to do. This can vary tremendously depending on the type of trust and the purpose of the trust.
For a revocable living trust set up to avoid probate, the person who created the trust usually serves as their own trustee until they pass away or become incapacitated. At that point, a successor trustee steps in. In most cases, the duties of the successor trustee will be fairly simple. That trustee will need to pay final bills, submit all tax returns, and distribute assets to successor beneficiaries before closing the trust. Except in the case of incapacity, the duties of a trustee in this situation can be completed relatively quickly, so it is not a long-term commitment. A family member can serve as trustee of this type of trust, and if they need assistance, an attorney can provide guidance.
Blacksburg Law Helps with All Aspects of Trust Creation and Management
Trusts can serve as effective and customizable tools to protect your family, but they need to be established and maintained correctly to meet your goals. At Blacksburg Law, we know that every decision you make while developing and managing your plans can have a big impact in the future, and we are prepared to help you make the right choices. We won’t rush you through the process, and we are never too busy to answer your questions because we want you to have the information you need.
To talk to us about the ways we can assist with choosing a trustee or other critical tasks, just schedule an appointment.