What Makes a Good Trustee?

By Lane V. Erickson, Idaho Estate Planning Attorney

Your estate planning should be as unique as you are. In other words, the circumstances of your life should guide you in the creation of the estate plan you will use. Your plan should accomplish what you want in the most effective way possible.

Every person should have at least a basic estate plan. This would include a last will and testament, a durable power of attorney for property and finances, a living will, and a durable power of attorney for healthcare. In addition to this, a large number of people should also consider using one or more trusts as part of their estate plan.

A person may need a minor’s trust for their children to provide for them financially in the event the parents die when the children are still young. Alternatively, a person may have a family member who has a handicap or disability that would benefit from a supplemental needs trust. Additionally, a person may have a specific charity or charitable purpose in mind for a portion of their estate to be used for, which could be accomplished through a charitable trust. Many people also use a trust as a way of avoiding estate taxes or not having to do a probate after they pass away.

Whatever the reason, if you are using a trust as part of your estate planning documents, then you need to have a trustee. The trustee is the person who is in charge of doing what the trust is supposed to do with the assets the trust holds. Because the trustee is in charge of the trust, it’s important that you appoint someone as the trustee who can do what you want them to do. In other words, it is important that the trustee that you name can do what needs to be done with the trust.

What are the characteristics that a good trustee should have? The list below should help you as you are considering who you should date as the trustee of your trust.

The first characteristic that everybody should consider his ability and capability. These may sound like they are the same, but they actually aren’t. You may have someone in mind who would be a perfect trustee. In other words, they have the capability of being a trustee. However, this person may be living in a different country, or they may already be named as a trustee for someone else, or they may be at a point in their life where they are dealing with their own children, or family, or business, or other thing that takes up all their time. Because of this, even though they are capable of being a trustee, they may not be able to be a trustee for you.

On the other hand, you may have an individual in mind who has all the free time in the world but does not have the experience, or the capability of handling the responsibilities of a trust. This person could be the kindest, most trustworthy, most loving person in the world, but they just don’t have the mental capability of being a trustee and doing what a trustee needs to do.

So, the first characteristics that you should consider are whether the person is able to be a trustee and whether they are capable of being a trustee. If the person you were considering doesn’t meet either of these criteria, then you should think about appointing someone else.

The next characteristics that you should consider for naming your trustee is whether they are honest and trustworthy. You may have someone who’s completely capable and able of being a trustee, but you can’t really trust them. The “trust” part of being a trustee is very important. The person that you name as the trustee will be in control of all the assets, money, and property that are held in the trust. If you choose someone who is untrustworthy, then terrible things can happen.

Having been an estate planning attorney now for over 20 years, I have seen many situations where trustees have abused the responsibility given to them and have taken assets from the trust for themselves. While mechanisms can be put in the trust to lessen the possibility of this sort of abuse, a person who has been given this level of responsibility could easily be tempted. For this reason, you really should trust the individual you name as the trustee.

An additional thing to consider is where the trustee is actually located. It is far easier for a trustee to manage and handle property in the trust if they are close to where that property is located. In other words, if the trust owns real estate, it helps to have the trustee be in the same general location as the real estate so that it can be managed and watched over more easily.

However, sometimes the location of the trustee is irrelevant. If the trust holds nothing but investments, or cash or its equivalent, then it really doesn’t matter where the trustee is located. These kinds of trust assets can be managed through online banking.

The final characteristic that you should think about when considering who to name as your trustee is the individual's longevity. Generally, the person you name as your trustee should outlive you. This is particularly true if the trust you have created will go on into the future for many years after your death.

You do have the ability to name more than one trustee. You can name a primary trustee who will be the first person serving as a trustee of your trust. You can also name a successor trustee who can step in and take care of the trust if the first person you choose is no longer able or capable of acting as a trustee.

Trust can be an important part of an estate plan. Because of this, it’s important that you take time to consider who you want to appoint as your trustee. The person you choose should have all the characteristics that you believe are important to handle the trust the way you direct.

We have helped many clients create and customize their own trust as part of their estate plan. If you have questions about whether a trust will work for you, and who you should name as your trustee, we can help. Contact us today for your free 30-minute consultation where we can discuss your options and help you come up with a customized plan that will meet your needs.

Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877-232-6101 or 208-232-6101 to set up a free consultation. You can also email us directly at lane@racineolson.com or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho estate planning problems.