It is a great honor to be asked to serve as a trustee for a family member’s trust, but it’s also a significant responsibility. Therefore, it’s important to go into the process with the right information. Below are several questions to ask before agreeing to be a trustee.
Is a Copy of the Trust Available for Review?
The trust documents serve as an instruction manual. They tell the trustee what to do with the property and assets they’ve been entrusted to manage. A trustee should carefully read and fully understand the document, and they should ask an estate planning lawyer for clarification if necessary.
What are the Grantor’s Goals?
Most trusts don’t have a clear purpose, and they give trustees considerable discretion on how to spend funds. It can be difficult to balance the needs of current and future beneficiaries. It’s important to ask the grantor for an explanation, and it may even be beneficial to have them put their intentions in writing.
How Long Will the Responsibility Last?
Potential trustees should find out how long the job will last. Some trusts are set up for a limited amount of time (such as until the youngest child reaches the age of majority), and others last indefinitely. In either event, trustees should know the terms under which they can resign if necessary.
Is Compensation Available?
Many times, relatives and friends work as trustees with no compensation. However, if the job is particularly demanding, it is appropriate to pay a trustee. A professional may charge a fee of one percent of the value of the trust’s assets, and if a private party is handling the same duties, they can charge a similar fee.
Serving as a trustee can be a blessing and a challenge. If after answering these questions a person feels comfortable accepting the job, they shouldn’t hesitate to do so. It’s an honor to be chosen, and accepting the role provides a great benefit to the grantor and his or her beneficiaries. For more information on becoming a trustee, or to find out about other estate planning services, contact a local estate planning lawyer today.