A Trustee is the person, persons, or entity that is charged with being in charge of trust assets and doing what your trust says. This could be a revocable living trust, or an irrevocable trust such as a Medicaid Asset Protection Trust or Irrevocable Life Insurance Trust.
Choosing a Trustee can be a very important decision. Common questions include:
- Do I choose a family member to be a Trustee?
- Should I choose two people are Trustee or only one?
- Can I choose a beneficiary to be a Trustee?
- Should I choose a child as Trustee?
- Can the same person be Trustee, Personal Representative, and Guardian?
You are allowed to choose anyone you want to as Trustee and you can choose more than one person as well. A Trustee must be at least 18 years of age and have the capacity to make financial decisions.
How Many? My advice is that one trustee is nearly always better than two. I’ve seen or heard of trusts with three or more trustees but it generally ends up expensive and messy with conflict and litigation. Even two trustees that try and work together isn’t as good as it sounds. If you have two then you need to decide whether one signature is good enough or if both trustees are required to agree before anything significant can be done. If both must agree then progress can be halted simply because of a disagreement in how to move forwards. If only one signature is needed then the trustees may step on each other’s toes and try, in good faith, to move the Trust in opposing directions.
More than one Type of Trustee? Should I choose one trustee while I am incapacitated and a different one after I die? This can be favorable for couples with children from previous marriages and they want their assets primarily to be for their children rather than their surviving spouse.
Should I choose one trustee to manage assets and a different trustee to distribute the assets to heirs? This can be a good idea If:
- There are one or more beneficiaries with special needs
- There are complicated investment assets that need a professional to invest
- Family dynamics and harmony would be improved by separating out those two roles