Once you have gone through the estate planning process, one of the last things you will need to do is select your trustee. You may be tempted to use the same person as your executor, who is likely a friend or family member. However, unless that person is an Abington, Pennsylvania, professional trustee, that person is rarely an appropriate choice to act as the trustee as well.
Why?
This is because the trustee position is essentially a job that is a highly technical, legal job that brings with it huge liability issues that can potentially last for decades. The trustee job is time-consuming, has legal requirements, reporting requirements, tax requirements and legal filing requirements. This is why it is rarely a good idea to have a friend or family member serve as your trustee unless they do so for a living.
Cost
When you are looking for a professional trustee, the first factor to consider is the cost. When comparing costs, make sure you compare the comprehensive fee or cost, which includes all the fees and costs, not just their fee.
Impartiality
Next, you should look for a trustee without a familial or relationship connection to your family. This is because they will need to make difficult decisions related to your beneficiaries that they may not like, which may mean saying, “no.”
Recordkeeping
Next, the trustee will need to have the ability to keep detailed recordkeeping of how they keep and maintain the trust assets, including how they are invested. This will be both for beneficiary reports and the IRS for annual income tax reporting.
Insurance and assets
Your trustee can make mistakes, and if that happens, they could be on the hook for penalties and fees, which could be a lot of money. This means that you want to make sure that your potential trustee is adequately insured and has assets to weather any potential financial storm.
Finally, you need to be comfortable with your potential trustee, and they need to make you feel comfortable, both with their experience and their demeanor. Additionally, you can use your Abington, Pennsylvania, estate planning attorney to help you find the right trustee.