Choosing to use a trust as part of your estate planning is a smart idea since it can help reduce the hassles that can occur in probate. It also provides some asset protection and lets you clearly define what you want to happen with your assets after your death.
In creating a trust, you also have to choose a trustee who will manage it. You probably know the trustee has to be someone reliable and responsible due to the duties he or she must handle. When making your choice, you also need to consider the financial aspects of a trustee, which according to the CPA Journal, include statutory fees and trust management.
Money management
One of the biggest duties of a trustee is to manage the assets in a trust, which may include various financial tasks. Your trustee may have to pay taxes on trust assets or manage monetary funds in a trust. He or she may have to make decisions about the use of the money in a trust as well.
You want to be sure you choose a trustee that will take the fiduciary duties seriously. The person should be able to properly manage money and, preferably, have experience with doing so.
Statutory fees
Every trustee has a right to collect fees for doing the job. You need to be aware of this because even if you do not include a fee payment for the trustee in your estate plan, the court will still pay the person a fee from your estate.
If you have a small estate, you may want to discuss this fee with the trustee. You can eliminate it, but you must do so by specifically stating it in your estate plan.
When choosing a trustee, you do not want to forget the financial aspects of the job. They can have an impact on the management of the trust after you die.
