WHAT IS THE ROLE OF A TRUSTEE IN ESTATE PLANNING?
A trustee is a person that the grantor chooses to manage their trust. The grantor puts assets in a trust, and the trustee’s main responsibility is to ensure that the beneficiary has access to those assets as per the grantor’s instructions. Sometimes, beneficiaries are unable to receive the benefits of the trust until they reach a certain age. A trustee can also be a beneficiary. The trustee also will need to:
- Distribute trust assets to beneficiaries, according to the directions of the trust document
- Manage assets in the trust (ex: maintain real estate property or reinvest earnings from an investment account)
- Maintain records for trust expenses
- File tax returns
- Report to the beneficiary when necessary
- Keep trust property separate from their own property
- Overall, act in the best interests of the beneficiary
WHO CAN BE A TRUSTEE?
The only legal requirements are that the trustee must be a US citizen over 18 years old who’s capable of understanding their actions. When you’re selecting a trustee, you’ll want to choose someone who is reliable and organized. Your trustee will have a big responsibility, and you’ll need to make sure they are willing to act as the trustee
- A family member
- A close friend
- An estate lawyer
- Corporate trustees (ex: a trust department at a bank)
If you hired an estate lawyer to help you initiate your trust, you can name them as the trustee. This can be beneficial since they have extensive knowledge of estate planning laws, so they can distribute the trust as efficiently as possible. Corporate trustees are especially helpful for managing large, complicated trusts. You can be a trustee of your own trust, but you’ll need to appoint a successor trustee to manage the trust in case you become unable to.
ARE TRUSTEES PAID?
Managing a trust is a big responsibility, so some trustees require compensation. Most corporate trustees will ask for 1-2% of the value of the assets in your trust. You can choose to pay a family member or friend for their services, but most close family members waive a fee.
Are you looking to create a trust in Iowa? Are you seeking a talented estate planning lawyer that has your best interests in mind? Look no further because Herting Law PLLC is on your side! Contact our highly experienced team today for an initial consultation.