If you are setting up a trust, you undoubtedly have a million things on your mind. Indeed, you must decide what type of trust is right for you, who should be a beneficiary of your trust and when the trust should kick in. Still, choosing a trustee is one of the more consequential decisions you must make.
Being an effective trustee requires tapping into a variety of skills. Even though picking a close friend or family member might be your first instinct, you should be certain your trustee has the ability to excel in the role. So, what does it take to be a good trustee?
According to the Law of Trusts by Browne C. Lewis, trustees have a legal duty to administer trusts in accordance with the interests of the beneficiary or beneficiaries. This means a trustee must be loyal to and not act against the interests of those who benefit from the trust.
Trustees should treat all beneficiaries, whether current or future, with impartiality. Put differently, it is not acceptable to prioritize the interests of one beneficiary over those of others, unless the foundational instrument permits doing so.
Whether funds are meager or quite valuable, the trustee must take care of them. This requires gathering funds, investing and distributing them and providing key oversight. Obviously, the trustee also should not use funds in the trust for personal gain.
In addition to these duties, the trustee must be able to communicate clearly and regularly with the beneficiaries. Ultimately, if you think a perspective trustee might be weak in any of his or her roles, it is probably wise to continue your search.