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What are the qualities of a good trustee?

On a very basic level, estate planning can be seen as a way to provide for and protect loved ones. Knowing this, it is beneficial to carefully lay out the details of a will, trust or other legal instruments used during the planning process.

In some cases, individuals may discover that a trust is the most secure way to deliver assets to beneficiaries. Beyond widely regarded tax advantages associated with trusts, those who create the trust can establish clear criteria for asset administration, provisions that the trustee is legally bound to follow.

Once the terms of a trust are settled, the most important question remaining is selecting a trustee. Immediately, it might be possible to think of a close relative or friend who could fulfill the task of managing trust administration. However, a report published on Forbes.com cautions against making this decision hastily.

Among the most things to consider when selecting a trustee is knowing whether or not the person would be up to the job. Depending on the specific type of trust that's created, there may be very specific, complex steps that must be followed by the trustee. Failure to adhere to this could create trouble for beneficiaries.

Additionally, designated trustees must truly understand their role. Even though a loved one might come to mind first to fill this role, it's important to remember that trustees must be impartial and fair. Failure to make the right decisions could wind up harming the beneficiaries more than anything.

A knowledgeable estate planning attorney could help fill in the details of creating a trust and selecting a trustee. In fact, it may be possible to select more than one trustee. In addition to naming a loved one, it might be worthwhile to include an independent party in the trust administration process. More than anything, taking thoughtful steps up from can provide the peace of mind that an estate plan is sound.

Source: Forbes, "Three Mistakes Individual Trustees Make and How to Avoid Them," Jan. 16, 2014

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Jeffrey P. Scott & Associates

Jeffrey P. Scott & Associates LLC
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